Scottish Widows restricts withdrawals from Life Property Fund

by Gill Montia

Story link: Scottish Widows restricts withdrawals from Life Property Fund

Scottish Widows has once again banned certain types of withdrawal from its £600 million Life Property Fund.

The move means that around 35,000 investors in the commercial property fund will have to wait up to 180 days to retrieve their savings.

However, claims made on the death of a policyholder, at policy maturity or for critical illness are not affected and those who are already making regular withdrawals will be allowed to continue.

The insurer, which is part of the Lloyds Banking Group, first imposed restrictions on the fund in January of 2008, but these were lifted later in the year, since when the value of commercial property in the UK has fallen sharply.

Scottish Widows says it is taking the action to protect all investors in the fund because of the length of time it can take to sell commercial property in such a depressed market.

Last month, Norwich Union limited withdrawals from its unit-linked life and pensions’ property fund and Standard Life placed limits on withdrawals from six commercial property funds.

Both companies took the action to enable them to sell the funds’ assets at reasonable prices.