How you could avoid bond exit fees

By THIS IS MONEY
Updated: 07:57 EST, 19 April 2010

I invested £5,000 in a with-profits bond with Legal & General in June 2000. I now face a 15% Market Value Reduction (MVR) charge if I surrender it.

How much longer will I have to hold on before I can get out with no penalty? J.W.

Lee Smythe, managing director of Killik Chartered Financial Planners in Mayfair replies: With-profits investments try to smooth out the bumps in the stock market by holding back some of the profits from good years to make up for the bad ones.

If someone wants to withdraw their money at a time when markets are depressed, an MVR may be applied.

This is to ensure they receive a fair share of the underlying fund, preventing those who remain invested from losing out.

The MVR should be removed if markets continue to rise. But some bonds have a guarantee the MVR will not apply if they are surrendered on the tenth anniversary of investment.

Since this date is fast approaching, you should check this immediately. It may be small comfort to know that