Investors in the troubled insurer AIG have until November 25 to decide whether to withdraw their money — and face losing up to half of their investment — or stay with its fund.

The company has closed one of its bond funds after being bailed out by the US government last month. The minimum investment in the £5.6 billion “enhanced” fund was £100,000.

Half the assets have been moved into its standard fund and are available to investors immediately. The remainder after withdrawals will be moved into the protected recovery fund where the company has guaranteed investors at least their money back if they stay for three-and-a-half years.

John Richardson at the financial adviser Towry Law said this guarantee was not cast-iron: “AIG Life UK is up for sale, so any guarantees will be transferred to the new owner.”

Those who want to can withdraw their money from December 15, but savers are being warned they could lose 20%-50% of their investment.

Jason Butler at adviser Bloomsbury said investors who withdrew their money would need to achieve annual returns of 21.6% over three-and-a-half years to make up a 50% loss, 10.6% for a 30% loss or 6.5% for 20%.

Times Recommends

• How to turn yourself into a model borrower
• The art world is no longer a safe haven
• Stampede for safe but sorry returns