Up to 300,000 people with £10 billion tied up in poor-performing with-profits bonds could take advantage of a “get out of jail free” card this year which they may not even realise they have.

Little-known “spot guarantees” enable investors to take their money out on the tenth anniversary of the bond’s start date without being hit with a penalty.

The guarantees were widely offered in the terms and conditions of with-profits bonds provided by companies including Aviva, Clerical Medical, Legal & General, Scottish Widows and Scottish Mutual from about 1997 until about 2002 — the “boom” years for these investments.

So many of the guarantees are coming up now and, according to exitwith-profits.co.uk, an estimated 300,000 people will have a guarantee in 2009 that allows them to withdraw all their money penalty-free.

The advice comes as the outlook for with-profits policies continues to deteriorate. Last week Legal & General said it had cut payouts on endowments, pensions and bonds by up to 18%, just days after having to increase reserves to offset losses on its corporate-bond portfolio.

The dates the guarantees come into effect depend on when the bond was taken out. So, if a bond was taken out on June 30, 1999, the guarantee will fall on that date this year — although the amount of time you have to exercise it varies. Aviva gives you 60 days, L&G 10 and Scottish Widows just one — although if you miss this windown, you could be eligible for lower penalties at a later date.

Matthew Morris at Exitwith-profits said: “If someone has a spot guarantee then they should get an appraisal of all their options. There is no golden rule, but one has to think that if a plan-holder can exit a bond with no penalty, given the dire backdrop and future prospects for with-profits, the chances are this will be a lifeline, so the answer must generally be to get out.”

There is an estimated £400 billion invested in with-profits plans, including endowments, pensions and bonds, held by more than 10m people. The aim of with-profits was to smooth out stock-market volatility by retaining returns built up in good years for the bad years. Commission-based advisers received high levels of remuneration from selling them.

However, due to low investment returns and inflation in recent years, many have failed to live up to the forecasts given when they were sold, in many cases leaving investors with far less than if they had invested their money in a deposit account. About £120 billion is thought to be tied up in plans that have consistently failed to match a cash return over the past 10 years.

Unfortunately for investors, penalties known as market value reductions (MVRs) are now being applied by most providers to prevent a rush of investors taking out their money, which is why the spot guarantees are so valuable. The average penalty on a with-profits bond is about 10% of the policy value, although some companies’ penalties are now over 20%.

Will my insurer tell me?

Aviva, which owns Norwich Union, said it had about 150,000 customers who could benefit from a no-MVR guarantee. Around 33,000 with-profits bonds will reach their 10-year anniversary this year.

It said: “We will write to customers reminding them of the guarantee three months before it kicks in — they will have a period of 60 days or 30 days either side of the guarantee date in which to claim it. However, the value of the guarantee on the guarantee date can be used to offset an MVR at any point after the guarantee date so customers will not lose the benefit if they choose not to take advantage in the 60-day window.”

However, Aviva is much better than others so it is worth checking the small print.

I’ve checked my contract, what should I do now?

If you discover from your terms and conditions that a spot guarantee is in place, then you will need to act well in advance of this date in order to ensure all the relevant documentation has been completed.

Morris said: “We recommend this is done via an independent financial adviser and by recorded delivery, which gets round any threat of the instruction being lost.”

What should I do if I missed the date?

Seek independent advice before you quit. Things to look at include the financial strength of the provider, asset mix of the underlying fund, the current MVR level and the bonus history including terminal bonus. You will also need to consider the tax implications of cashing in.

You should also bear in mind that you can avoid being hit by an MVR by making annual withdrawals from your bond.

Philip Pearson of adviser P&P Invest said: “One alternative to complete surrender is to withdraw a regular sum from the investment. Very often this can be exercised without an MVR being applied. The amount that can be regularly paid varies tremendously between contracts and could range between 5% and 12% a year of the original sum invested.”

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