Norwich Union has announced that it has temporarily deferred settlements on its unit-linked property fund (Life and Pensions).

The fund, which invests in UK commercial property, has seen a tightening on trading conditions over the last 12 months, and a statement released by the company says that a number of other UK funds have introduced periods of deferral.

The temporary measure will protect all investors in the fund, and gives the fund a longer period in which to sell the properties it holds at a satisfactory price.

Norwich Union will be contacting existing investors who have made regular payments into the fund, as well as independent financial advisers (IFAs) who represent clients who have invested.

"We recognise that this will be disappointing for some investors who may want immediate access to their capital," said David Barral, marketing director at Norwich Union. "However, this action is in the best interests of investors by protecting the long-term value of their investment and avoiding having to sell properties below their market value."

Barral added that the decision has been taken to allow the company to manage redemptions appropriately.

"Despite the current short-term difficulties, we are confident of the long-term prospects for commercial property. It remains an important part of a balanced, long-term investment portfolio."

Norwich Union said their other funds, including Aviva Investors Property Trust Funds, will continue to trade as normal. Equity and bond funds held by the company are also unaffected.

- Pensions Age January 2009

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