How does a unit-linked policy work?

With a unit-linked policy, any contributions paid in are used to buy units in the investment funds. The value of these units can go down or up depending on the way the investments are performing and so will the value of your pension pot. When you take money out of your pot, the amount you receive will depend on the value of the units sold on that given day.

If you pay £100 into The People’s Pension and the current unit price is £5 per unit –

£100 ÷ £5 = so you’ll buy 20 units.

When you come to claim your fund and the new unit price is £7 per unit when you claim –

20 units X £7 = so you’ll receive £140.

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