Druids Sheffield. Key Features Stocks & Shares ISA Saving with Life Assurance T45

Transcription

1 Druids Sheffield Key Features Saving with Life Assurance T45

2 We may be contacted at: Druids Sheffield Dove House, 181 Brampton Road,Wath-upon-Dearne, Rotherham, South Yorkshire S63 6BE Tel: Fax:

3 The Financial Conduct Authority is the independent financial services regulator. It requires us, Druids Sheffield, to give you this important information to help you decide whether our is right for you. You should read this document carefully so that you understand what you are buying, and keep it safe for future reference. Its aims To provide capital growth by way of yearly bonuses, which are not guaranteed and depend on the investment performance of the underlying assets To take advantage of the tax concessions available in an ISA To provide a guaranteed cash sum to your dependants if you die during the term Your Commitment To pay your premiums for a 20 year term. You may stop paying at any time, but you may lose some of your investment. To pay premiums of at least 5 monthly or 60 yearly Not to exceed your annual ISA allowance, which is 15,240 for the tax year 2015/16 Risks Your money is invested in our With-Profits Fund, which includes a range of investments, the income from and values of which can go up and down (see p.4, What is the Druids Sheffield?). There is no guarantee of what you might get back and you could lose money. If this risk is not acceptable to you, you should not invest in the. You cannot withdraw any money in the first 12 months. If you cash in the ISA after paying the first year s premiums and before the end of 20 years, the surrender value may be less than you have paid in. page 1

4 Bonuses will depend on the investment performance of the fund, which cannot be predicted, and in adverse investment conditions they could be nil. A market value reduction (MVR) may be applied if you cash in all or part of your ISA, or transfer it to another provider, before the end of its 20 year term (an MVR will not be applied on death). Inflation may reduce what you could buy in the future with the policy proceeds. The information in this document reflects our understanding of the current tax rules, which may change. Important Information Is the Druids Sheffield suitable for me? We only offer our on an execution only basis. Whilst we can provide you with factual information about any of our products and services, we do not offer or give any advice. If you are not sure whether this product is suitable for you, you should seek advice from an Independent Financial Advisor (IFA). If you do not know an IFA you can find details of local IFAs by telephoning IFA Promotion on or via An IFA may charge you for advice. page 2

5 Questions and Answers What is an Individual Savings Account (ISA)? An ISA is a way of saving money so that you don t pay personal tax or capital gains tax on any profits that you make. There are two types of ISA: A Cash ISA A Stocks and (which includes life assurance policies) From 6th April 2015 you have a yearly ISA allowance of 15,240. You can invest up to the whole of this amount in either a Cash ISA or a Stocks and, or you can split your investment between the two types as long as you do not exceed the maximum allowance. There is no limit on the total number of ISAs you can have, but you can only pay into one cash ISA and/or one Stocks and in each tax year. You can choose to invest with the same or different providers for each type of ISA. If you choose two providers, you are responsible for making sure your contributions do not exceed your yearly ISA limit. We only offer a Stocks and. Who is eligible for an ISA? You must be: 16 or over for a Cash ISA 18 or over for a Stocks and Resident in the UK or a Crown servant (eg diplomatic or overseas civil service) or their spouse or civil partner, if you don t live in the UK You can t hold an ISA with or on behalf of someone else. Children under 18 can invest in a Junior ISA (please call our Head Office for details see How to contact us on p.11). page 3

6 What is the Druids Sheffield? Our is a 20 year with profits, life assurance policy set up within a tax efficient ISA wrapper. It is an investment policy with an element of life cover. Who can take out the Druids Sheffield? Our is available to anyone from a minimum age of 18. Anybody age 70 and above can take out our Shares ISA but they will not get any life cover. How much can I pay in? You can pay premiums from 5 monthly, or 60 yearly, up to the maximum ISA allowance in each tax year. In tax year 2015/16 the maximum you can invest is 15,240. You can alter your premiums at any time within the minimum and maximum limits. How is my money invested? Your money is invested in our With Profits fund and the underlying assets are invested in Freehold Property, Equities, Corporate Bonds, British Government Securities and Cash. How are bonuses calculated? Each year the Society s Actuary values our With Profits fund and recommends whether we can declare a bonus, and if so how much. Bonuses depend on future profits and are not guaranteed. In adverse investment conditions, bonuses could be nil. page 4

7 Will there be any tax liability? Any payment to you from the ISA is free from personal income tax and capital gains tax, and it does not need to be entered on a tax return. When the fund receives investment income this is also free from tax except that we cannot reclaim the tax credits on dividend income from UK company shares. This is our understanding of current tax rules, which may change in the future. Can I cash in or transfer my ISA? You cannot close or transfer your ISA within the first 12 months. You can cash in or transfer your ISA at any time after one full year s premiums have been paid. The amount payable will depend on: Any bonuses added to the ISA; The surrender basis in force at the time; Whether an MVR may be applied; And, it may be less than the premiums paid in. Your chosen provider will make the necessary arrangements if you wish to transfer your ISA and we will make no charge for completing the transfer. Can I make withdrawals? After your ISA has been in force for at least 12 months, you may withdraw any amount at any time as long as you leave a minimum balance of 60 in your ISA. page 5

8 What is a market value reduction (MVR)? An MVR is designed to safeguard investors who continue their investment in the ISA until the end of the term i.e. 20 years, or until earlier death. At either of these times you would receive the full value of your investment without any MVR being applied. Other than at the end of your ISA term, or on death, we have discretion to apply an MVR to your ISA if you decide to cash in all or part of your investment during times of adverse market conditions. This means we may reduce the value of your investment and you could get back less than you have paid in so as to ensure you only get your fair share of the underlying fund. The amount of MVR depends on when you invested and the investment market conditions during the period of your investment. We will set the level of any MVR after receiving advice from our Actuary. We may apply or remove an MVR at any time without prior notice. What if I die before maturity? If you are aged 18 to 69 (inclusive) when you take out our it will include life cover, which will be equal to ten times the amount of your annual contribution (defined as the amount paid into your ISA in the calendar year prior to death), up to a maximum of 10,000 of cover. If you die we will pay the greater of the value of your ISA at the time of death or this life cover. If you are aged over 69 when you take out our, we will pay the value of your ISA at the time of death. We guarantee not to apply an MVR on death. page 6

9 How can I find the value of my investment? The With Profits fund will be valued each year by the Society s Actuary and you will be notified of any bonuses allocated and any changes in the rate of charges. We will send you a statement showing the amounts you have invested and withdrawn together with the value of your investment. You can call our Head Office to ask for a valuation (see How to contact us on p.11). An Example This example applies to all ages for which the Druids Sheffield ISA is applicable, that is between 18 and 70 years of age. Premium of 50 monthly, sum assured payable on death, the greater of 6,000 or the accumulated sum, over the term of 20 years. What might I get back at the end of the term? At the end of your 20 year term, you will receive your fund value. Before then bonuses will be declared on a basis recommended by the Actuary, as a result of an annual Actuarial Valuation. The figures below show what maturity benefit you might receive at the end of the contract term. These figures are only examples and are not guaranteed they are not minimum or maximum amounts. What you receive depends on how your investment grows. You could get back less or more than this. The rates of growth used in these examples are the standard rates as prescribed by the Financial Conduct Authority for this type of investment. All friendly societies use the same rates of growth, or less, for projections but their charges vary. page 7

10 Do not forget that inflation would reduce what you could buy in the future with the amounts shown. If investments grew at 2% a year you would get back 12,100. If investments grew at 5% a year you would get back 16,500. If investments grew at 8% a year you would get back 22,900. What are the charges? The charges will be no more than 2% yearly of the value of your investment. As an example, if your investment was worth 500 and the charge rate was 2%, the yearly charge would be 10. If the value of your investment then grew to 750 the charge would be 15. These charges are taken into account when declaring bonuses and are not paid separately by you. The table below provides examples of the effect of the charges on the possible surrender and maturity amounts. page 8

11 How do charges and expenses affect my investment? The table below shows the impact that charges have on the policy proceeds. The early years Warning If you cash in before maturity you could get back less than you have paid in. The last two columns assume that investments will grow at 5% each year. What are the deductions for? The deductions include the cost of commissions, expenses, charges, any surrender penalties and other adjustments. The last line shows that over the full term the effect of the total deductions could amount to 3,800. Putting it another way, if the growth rate was 5.00% a year, which is in no way guaranteed, this would have the effect of reducing it to 3.1% a year. At end of year Total paid in to date ( ) Total Actual Deductions to date ( ) Effect of Deductions to Date What you might get back ( ) , , , , , , , ,240s The later years To get the full benefit of the policy it is important to continue for the whole period. At end of year Total paid in to date ( ) Total Actual Deductions to date ( ) Effect of Deductions to Date What you might get back ( ) 10 6, , ,000 1,490 1,860 11, ,000 2,790 3,800 16,500 page 9

12 Do you pay a commission to anybody? If you are a member of a lodge your Lodge Secretary will receive a yearly payment equal to 0.5% of your net calendar-yearly contributions, for example: If in any year you contribute a total of 12,000 between 1 January and 31 December, and you also withdraw 2,000 in that period, the payment would be 50 ( 12,000-2,000 = 10,000 x 0.5%). This is paid from the deductions included in the above example. We do not pay commission to any other third parties. How do I start a Druids Sheffield Stock &? Starting our is simple. Once you have read and understood these Key Features : Decide how much you want to save each month or year. Complete the application form enclosed with this document. Complete the standing order form enclosed if you want to use this method of payment. Post your application / standing order forms to the address overleaf, or give them to your Lodge Secretary. If you are applying via the internet you also need to send proof of your identity to us. Please see the Proof of Identity list on the website or call head office for further details. How do I pay my premiums? Premiums are paid by monthly or annual standing order, collected by your Lodge Secretary or by sending a cheque to head office. page 10

13 Further Information How to contact us If you want to: Cancel your Druids Sheffield Change your regular payments Get information about your plan s value Make a withdrawal, or other claim Transfer to another ISA Ask any other questions Call us on Our office is open Mon-Thurs 9.00 am to 5.00 pm. info@druidssheffieldfs.co.uk OR Write to us at: The Druids Sheffield, Dove House, 181 Brampton Road, Wath-upon-Dearne, Rotherham S63 6BE. Making a complaint If you wish to complain about any aspect of the service you have received, please write or call us using the contact information above. If your complaint is not dealt with to your satisfaction you can complain to the Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR. Making a complaint will not prejudice your right to take legal proceedings. Compensation Druids Sheffield members are covered by the Financial Services Compensation Scheme (FSCS). You may be entitled to compensation if the Society is unable to meet its financial obligations to you, depending upon the circumstances. page 11

14 For long term insurance business (such as this plan) the FSCS may arrange to transfer your policy to another insurer, provide a new policy or, if these actions are not possible, provide compensation of 90% of your claim, without any upper limit. Further information is available from the FSCS at or by telephone: Cancellation rights After your proposal has been accepted, you will be sent your policy documents together with a cancellation notice. You have 30 days from when you receive this notice to change your mind. To cancel the plan, fill in and return the cancellation form and post it to Druids Sheffield, Dove House, 181 Brampton Road, Wath-upon-Dearne, Rotherham S63 6BE. Law In legal disputes, the Law of England and Wales will apply. Language All contractual terms and conditions and all communications will be supplied in English. page 12

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16 Druids Sheffield is a trading name of The Independent Order of Odd Fellows Manchester Unity Friendly Society Limited, incorporated and registered in England and Wales No 223F. Registered Office: Oddfellows House, Deansgate, Manchester M3 3WB. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, registration No T45 / v1.0 / 30 April 2015