Prudential Assurance Vie France – Review for Expats
Prudential International Prudence Bond (Assurance Vie – France)
The Prudential International Prudence Bond (IPB) is a multi-currency, life-assurance–based investment structure recognised under French law as an Assurance Vie. Despite the name, it doesn’t operate like a traditional “bond.” Instead, it functions as a tax-efficient wrapper that holds a range of underlying funds.
Your returns depend on the performance of those funds rather than the wrapper itself.
The Prudential “Smoothing Effect”
A standout feature of the Prudential Assurance Vie is its smoothing mechanism within the PruFund range. Rather than exposing investors to sharp market movements, Prudential smooths out short-term fluctuations, aiming to deliver a steadier. inflation beating growth over time. This approach helps to reduce volatility and maintain a link to long-term market performance.
Expected Growth Rate
Prudential sets an Expected Growth Rate (EGR) for each PruFund, reviewed quarterly. This rate represents the annualised growth Prudential expects to achieve over the medium term and is applied daily to your policy value. The EGR can be adjusted if market conditions change.
Recent indicative figures include:
- PruFund Growth GBP: 7.4% per annum
- PruFund Growth EUR: 6.7% per annum
Unit Price Adjustments (UPA)
To ensure the smoothed value remains aligned with real market performance, Prudential may apply Unit Price Adjustments. These adjustments, which can be upward or downward, are used when the difference between the smoothed and actual asset values becomes too wide. This process helps maintain fairness between new and existing policyholders.
Key Features & Benefits
Well-Known & Trusted Brand
Prudential is a globally recognised financial institution with strong investor confidence.
Smoothing Effect
Helps to reduce market volatility, ensuring consistent, if modest, returns.
Tax-Efficient Structure
Allows for tax deferral and proportional relief on withdrawals, improving overall returns. Read our guide to Assurance Vies for a case study on the tax benefits.
Estate Planning Benefits
Can be held in joint names, with beneficiary clauses allowing assets to pass outside French probate. In most cases, €152,500 per beneficiary (on premiums paid before age 70) is exempt from French succession tax, with rates of 20% applied up to €700,000 and 31.25% beyond this.
Investor Protection
Backed by one of the world’s largest life insurance companies, with over £657 billion in funds under management.
Loyalty Bonus
Investors receive a 0.5% bonus for investments over £75,000 (€100,000) and 1.5% for investments over £150,000 (€200,000).
Multi-Currency Options
Available in GBP, EUR, and USD.
French Tax Treatment
The IPB, structured as an Assurance Vie, combines French-recognised tax advantages with Prudential’s global investment flexibility and smoothing strategies. Gains accumulate within the wrapper and are only taxable upon withdrawal, allowing for long-term tax deferral. After eight years, investors benefit from an annual allowance of €4,600 (single) or €9,200 (couple) on the gain element of withdrawals. Within the first eight years, gains are subject to the Prélèvement Forfaitaire Unique (PFU) at 12.8%, reducing to 7.5% thereafter on total premiums up to €150,000, with 12.8% applied on any excess. Social charges of 17.2% apply to the gain portion and are not reduced by the allowance.
For estate planning, beneficiary clauses allow assets to pass outside French probate. Typically, €152,500 per beneficiary (on premiums paid before age 70) is exempt from French succession tax, followed by 20% on amounts up to €700,000 and 31.25% thereafter. As with other foreign Assurance Vie policies, an annual declaration to the French tax authorities (Form 3916/3916-bis) is required. Where authorised, withholding under the PFU may be applied; otherwise, taxes are declared through the annual return.
Is this investment right for me?
This investment is only available through financial advisers and is particularly suited to balanced and low-risk investors. Prudential offers a range of risk-rated funds, from Cautious to Balanced strategies, making it a solid choice for those seeking security and stable, long-term growth.
Given Prudential’s size, reputation, and strong brand recognition, particularly among UK expatriates, it is one of the most well-regarded expat Assurance Vie’s available. The bond is widely chosen for its security, steady performance, and modest but reliable returns.
Considerations
Is It Right for You?
Are resident in France (or planning to become resident).
Want smoothed, multi-asset exposure with a balanced approach to risk.
Value tax deferral, post-8-year allowances, and clear succession planning.
Prefer a multi-currency solution (EUR/GBP/USD) with strong administration and transparent reporting in English.
My Verdict
The Prudential International Prudence Bond Assurance Vie is one of the strongest options for expats in France seeking a low-risk, tax-efficient investment with steady, long-term growth potential. While it doesn’t offer full open-architecture fund access, its proven performance, smoothing mechanism, and estate-planning advantages make it a highly secure choice for those prioritising stability and simplicity over aggressive growth.
For investors who prefer a more flexible structure or a wider investment universe, other Assurance Vie providers may be worth exploring. These can offer greater fund choice and customisation, depending on your objectives and tax position.
If you’d like to explore whether the Prudential Bond is right for you, feel free to book a free consultation or fill out the form below with any questions.