Prudential ISA. A guide to the. Your questions answered

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1 Prudential ISA A guide to the Prudential ISA Your questions answered

2 The Prudential ISA combines tax-efficient investment with access to the unique range of PruFund funds. About the Prudential ISA Capita Financial Investments Limited is the ISA Plan Manager to the Prudential ISA. Capita Financial Investments Limited is responsible for all regulatory and legal aspects of the ISA and the provision of all customer services. The Prudential ISA has two elements: > investment in a life insurance policy which allows access to the PruFund Funds (the Life Insurance Policy) for which Prudential is responsible, and > investment in Open-Ended Investment Companies (OEICs) through a range of OEIC funds for which Capita and its associated group company Capita Financial Managers Limited are responsible. You can choose to invest in one or both elements of the Prudential ISA. Please contact Capita if you have any questions about the Prudential ISA. Their details are shown in the 'How to contact Capita' section on page 7. What does the Prudential ISA offer? The Prudential ISA is a Stocks and Shares ISA suitable for medium to long-term investment, offering: > Tax-efficient growth you have no Income or Capital Gains Tax to pay on growth within the ISA > The PruFund range of funds these funds, available only from Prudential, aim to grow your money over the medium to long term, while helping to protect you from some of the short-term ups and downs of direct stockmarket investments by using a unique smoothing process > A range of OEIC funds designed to meet different investment objectives and attitudes to risk > Easy access to your money with regular and one-off withdrawals to meet your needs* > Invest from as little as 50 each month the minimum single investment is 500, the minimum monthly payment is 50 > Freedom to transfer you can transfer your existing Cash ISA or Stocks and Shares ISA to the Prudential ISA. * You will reduce the value of your ISA each time you withdraw money. Ongoing Adviser charges that you arrange to have deducted from your ISA will have a similar effect. If withdrawals are more than any overall growth achieved from your ISA, the value of your ISA will reduce below the level of the original investment. For full or partial withdrawals out of the PruFund range, including ISA transfers, there may be a 14-day waiting period. Please be aware of the risks Please remember that the value of your investment can go down as well as up. What you get back depends on the assets you choose to invest in within your ISA, for how long you have invested and how they perform. It may mean you will not get back the full amount of your investment. 02 A Guide to the Prudential ISA

3 A Stocks and Shares ISA is a way of sheltering your money from tax. It is a tax-efficient investment wrapper in which you hold a range of investments, including funds which invest in equities (shares), property shares, and even cash. These are known as multi-asset funds. What types of ISAs are available? There are two types of ISA: > Cash ISAs a bit like a savings account from a bank or building society. This is suitable for savings over any period and normally money can be taken out easily. > Stocks and Shares ISAs can be a good way of entering the stockmarket. This is more suitable for longer-term saving. ISA products are tax efficient as you pay no Income Tax or Capital Gains Tax on any growth within the ISA. The value of an investment can go down as well as up and the value in the future may be less than the amount invested. For the range of PruFund funds, what you receive will depend on the value of the underlying investments, the Expected Growth Rates as set by the Prudential Directors, our charges, the smoothing process and when you take your money out. The Prudential ISA is a Stocks and Shares ISA. Prudential does not offer a Cash ISA, which is usually more secure than a Stocks and Shares ISA but tends to offer less potential for higher returns over the medium to long term. How much can I invest in the Prudential ISA? You can invest up to 15,240 in the tax year 2015/2016. The tax year runs from 6 April to 5 April the following year. You can put money in and take it out whenever you want and you don t even have to declare an ISA on your tax return. However, you can only ever pay up to a maximum subscription allowance in any one tax year, even if you have taken money out during the same tax year. This information is based on our understanding, as at May 2015, of current taxation, legislation and HM Revenue & Customs practice, all of which is subject to change without notice. The impact of taxation (and any tax reliefs) depends on individual circumstances. Can I transfer my existing ISA investments to the Prudential ISA? You can transfer any previous tax years Cash ISAs or Stocks and Shares ISAs from other providers to the Prudential ISA and invest the transfer amount into the range of funds available. Transferring to a Prudential ISA is straightforward. Your Financial Adviser will help you complete the forms. You could transfer your existing ISA to the Prudential ISA without affecting the current year s subscription limits ( 15,240 for the tax year 2015/2016). There is currently no charge for transferring your ISA to the Prudential ISA, however your existing ISA Manager may charge you for any transfer and your adviser may charge you for any advice provided. Please speak to your existing ISA provider for more information. You may also lose out on any growth in value during the period when the transfer is taking place. You don't have to declare any ISAs on your tax return. A Guide to the Prudential ISA 03

4 You will pay no Income Tax on the interest generated by bond funds held within an ISA. Which funds can I invest in? A selection of funds is available within the Prudential ISA: > PruFund range of funds > CF Prudential Investment Funds (1) PruFund range of funds combining diversification and smoothing What is diversification? For many investors, the volatility which can result from investing in a single asset type (such as shares) would be unacceptable. At the same time, investors are looking to achieve returns that offer the potential to outstrip inflation. Therefore, many choose to spread their money over a variety of asset types. This is called diversification. By diversifying your investments, you can potentially gain some exposure to higher-performing asset types without the risks of putting all your eggs in one basket. What is a smoothed fund and how can it help investors? Smoothed funds aim to protect you against some of the shortterm ups and downs associated with investing directly in the stockmarket. They use 'smoothing' mechanisms to provide a smoothed return over the medium to long term with the aim of providing some protection from market volatility. Prudential s PruFund fund range If you are considering an investment that combines the benefits of diversification together with the advantages of smoothing, the unique PruFund range of funds may be a potential solution for you. The PruFund funds invest in many different types of investments and asset types including UK and international shares (equities), cash, property and fixed investment securities such as bonds. By spreading and diversifying your investment across these assets, we can help to reduce the risk of extreme ups and downs that you may get with any single asset type. We publish full details of the current asset mix for all PruFund funds on The following PruFund range of funds are available via a life assurance policy provided by Prudential: > PruFund 0-30 Fund > PruFund Fund > PruFund Fund > PruFund Fund > PruFund Cautious Fund > PruFund Growth Fund. If you die, the life insurance policy will pay out 100.1% of the value of your investment. 04 A Guide to the Prudential ISA

5 There is no Capital Gains Tax to pay on any profits made by your ISA investments increasing in value. Like most stockmarket-based investments, the value of the assets into which the PruFund funds invest changes each day, sometimes increasing, sometimes decreasing. The PruFund funds aim to reduce the impact of these movements over the short term by using a unique smoothing process. For more information on the PruFund range of funds objectives and charges please refer to the Fund Guide Prudential ISA PruFund Funds, available from your Adviser. OEIC Funds A range of Open Ended Investment Company (OEIC) funds is also available as a fund choice within the Prudential ISA. The OEIC funds are operated by Capita Financial Managers Limited who is legally responsible for the funds, including all servicing and administration of the funds. The OEIC funds are designed to meet different investment objectives and match different attitudes to risk. The following OEIC funds are available within the Prudential ISA: > CF Prudential Dynamic 0-30 Portfolio > CF Prudential Dynamic Portfolio > CF Prudential Dynamic Portfolio > CF Prudential Dynamic Portfolio > CF Prudential Dynamic Portfolio > CF Prudential Dynamic Focused 0-30 Portfolio > CF Prudential Dynamic Focused Portfolio > CF Prudential Dynamic Focused Portfolio > CF Prudential Dynamic Focused Portfolio > CF Prudential Dynamic Focused Portfolio For more details on the OEIC fund objectives and charges, please refer to the Key Investor Information Document for each fund available from your Adviser and on the Capita Financial website A Guide to the Prudential ISA 05

6 Important information about your Prudential ISA Accessing your money Adding to your investment Should you want to take money out of your Prudential ISA, either on a regular basis or as a one-off lump sum, it is easy to arrange. Taking lump sums and regular withdrawals is only allowed if the ISA value after the withdrawal meets our minimum value limit of 500 for each fund. For further details, refer to the Key Features document, available from your Adviser. You can add to your investment at any time, from a minimum lump sum of 250. Regular savings can be increased by any amount subject to a minimum of an additional 5 each month. Any lump sum additions or regular saving increases are subject to ISA annual subscription limits. Taking out lump sums Paying your Adviser through your Prudential ISA You can cash in part of your Prudential ISA at any time, subject to a minimum of 250. Taking regular withdrawals You can choose to have regular payments from your ISA every month, three months, six months or every year. The minimum regular withdrawal is 50 on each occasion for each fund that you are invested in. The maximum annual limit for regular withdrawals is 7.5% of the value of the ISA. 06 A Guide to the Prudential ISA You and your Financial Adviser will agree the charge for giving you financial advice. Some or all of these charges can be paid on your behalf from the payment you send us and/or from your investment.

7 More information This guide is for information only. If you are considering an investment in the Prudential ISA you should seek advice from your Financial Adviser and read the following important documents: > Prudential ISA Terms and Conditions > Key Features of the Life Insurance Policy within the Prudential Individual Savings Account (ISA) > Fund Guide Prudential ISA PruFund Funds > Example Illustrations for Investment in the Prudential ISA and CF Prudential OEIC Funds > Master Insurance Agreement Customer Version > Your With-Profits Plan a guide to how we manage the fund (PruFund range of funds) > Key Investor Information Document(s) These are available from your Adviser. How to contact Capita Write to Capita at: Capita Financial Investments Limited, 2 The Boulevard, City West One, Office Park, Gelderd Road, Leeds LS12 6NT. Phone Capita on: , 8:30am to 5:30pm Monday to Friday (excluding Bank Holidays) the Capita Customer Services team at: investorservices@capita.co.uk A Guide to the Prudential ISA 07

8 ISAB /2015