Make your money work harder with this medium to long-term lump sum investment, which has a guaranteed minimum return of at least 103% of your original investment after five years, plus possible bonuses depending on the performance of the with-profits fund.
Why choose this plan?
Invest a lump sum between £1,000 - £100,000
Money is invested in our managed with-profits fund
Open-ended term, but is designed to be for at least five years
A surrender penalty will apply if cashed in within the first five years
Subject to the guaranteed return after 5 years, the policy proceeds could be reduced if withdrawn during adverse investment conditions.
If you would like to draw income from your investment see our Income Bond
Please read the product Q&As and Key Features document before proceeding.
What is the Investment Bond?
The bond is a single premium investment that has no fixed term but is designed to be held for a minimum of 5 years. Providing there is no Market Value Reduction (MVR) the amount payable when it is withdrawn after 5 years will be the guaranteed Sum Assured plus bonuses which are added during the life of the policy. The final value will depend upon investment performance but bonuses are declared annually by the Society’s Committee of Management acting on actuarial advice. Bonuses are not guaranteed.
How much can I invest in an Investment Bond?
The minimum investment is £1,000 up to a maximum of £100,000 per calendar year (January to December). The Society has an overall discretionary holding limit of £300,000 per member.
Who can invest in a bond?
The bond is available to all ages, though for children under the age of 11 a parent or guardian will be required to complete the proposal form. In addition, a parent or guardian’s signature will be required to withdraw or surrender a bond where a child is under the age of 16 at the time of the request.
Can I invest in joint names?
Yes, the bond can be held in joint names.
Why should I invest with Sheffield Mutual?
As a mutual friendly society we have no shareholders to satisfy therefore all our surplus profits are shared with our members. We specialise in offering with-profits policies, which offer greater potential returns by investing in a range of different assets – without exposing your capital directly to the stock market.
Where will my money invested?
The Society invests in a range of different assets with the aim of providing a higher return in the medium to long-term than is achievable with a bank or building society account. Sheffield Mutual's managed with-profits fund is managed to provide a low to medium risk investment, appealing to individuals with a more cautious approach to investment.
The types of asset we invest in are:
- The shares of UK companies, though we may also have a small exposure to some overseas companies and emerging markets to provide diversity. These provide income from dividends with the possibility of capital growth
- Investments such as Government Gilts or corporate bonds, which provide fixed interest
- Property - the Society owns properties which provide income from rentals and potential capital growth, we may also invest in property and infrastructure funds to provide diversity
- Fixed interest returns from a small portfolio of commercial mortgages
The proportion held in each of these will vary depending on market conditions. We can provide you with a guide to the spread of investments. We seek to adopt an ethical approach to investing and it is our policy not to invest knowingly or directly in industries relating to armaments, tobacco, gambling or pornography.
How are bonuses calculated and paid?
We invest our funds as described in the previous section and receive a return on those investments which can vary from year to year. At the end of March or early April we review the returns achieved during the previous calendar year in consultation with our Actuary, and the Committee of Management declares a bonus rate for each policy type for that period. Obviously the rate varies depending upon overall investment returns and is not therefore guaranteed to be paid at the same rate or at all, in future years.
Bonuses are calculated at the appropriate rate based on the Sum Assured not the amount of premium paid and on encashment after 5 years subject to the conditions outlined below, you will receive the initial sum assured plus bonuses added during the life of the policy.
The Society also tries to ‘smooth’ returns over the life of the policy by retaining some of the investment return in good years to maintain bonus rates in poorer years. However, to ensure members receive their fair share of returns on their policy over its lifetime, there may be an additional terminal bonus paid on maturity. Payment of this type of bonus depends entirely on investment performance and the rate at which annual bonuses have been added and is not guaranteed.
Are there any guarantees?
Providing the bond runs for at least five years the Society guarantees that you will get back a minimum Sum Assured of 103% of the initial investment. Bonuses when declared are added to the Sum Assured. In the event of adverse investment conditions the Society reserves the right to apply a Market Value Reduction (MVR) to the Sum Assured and any bonus already added. However the Society guarantees that the application of the MVR after five years will not reduce the proceeds below 103% of the initial investment. An MVR will not be applied in the event of the policy becoming a claim as a result of the death of the single policy holder or the death of the second policy holder for joint policies.
How long does the money have to remain invested?
The recommended minimum investment period is five years after which you can either withdraw your investment or leave it to earn future bonus until such time as you need it. Should you need to withdraw some of your capital at a future date we can invest your lump sum in up to three seperate policies, with a minimum of £1,000 per policy, which will enable you to withdraw part of your investment without having to surrender (cash in) the entire investment. If you surrender your bond within five years of commencement then a surrender penalty will apply and you may get back less than you invested.
Can I have an income from a bond?
No, this bond does not provide any income during the term, but if you require income please ask about our Income Bond.
Can I make any withdrawals?
Yes, it is possible to surrender your bond but as this is a medium to long term investment early surrender may result in you receiving less than you originally invested. It is not advisable to invest in this bond if you know at the outset that you will require the money within five years.
What happens if I die?
The Bond provides a Sum Assured of 103% of the initial investment. In the event of death the Society will pay out the Sum Assured plus any bonuses that have been added to your policy. In the case of a joint life application on the first death, the bond will continue in the name of the survivor.
Is there any tax liability?
The money you save is invested in a fund on which the Society pays tax and tax at the basic rate may be treated as paid on any taxable gain, which means there is likely to be no further tax to pay unless you are taxable at the higher rate. However, a gain on which tax is treated as paid may have an effect on your tax liability if you qualify for age-related allowances or reliefs, or you are receiving tax credits. All references to taxation are based on the Society’s understanding of current tax legislation and practice, which may change in the future.
If you die the people who inherit your bond may have to pay inheritance tax and some income tax.
Are there any charges?
Yes, the Society makes a charge of 5% of the initial investment in year 1 and subsequently 0.5% of the fund each year. These charges are to cover the costs of setting up the policy and ongoing management. The charges are deducted from the overall fund and taken into account when we calculate the level of bonuses we are able to pay.
What about membership?
Yes, you will become a voting member of the Society with access to various discretionary benefits when available, such as optical/dental grants.
How do I start my bond?
Simply click on the “Get A Quote / Apply Now” button where you will have the option to:-
- Get a quote online
- Apply online or
- Download an Application Pack
View/Download/Print :- Our Product Brochure and Key Information Document
If you choose to apply online, this will be submitted to the office where we will check and print out your application and then post it out to you to sign and return.
If you choose to complete a paper application please follow the checklist provided in the application pack and send your application to:-
Sheffield Mutual Friendly Society, FREEPOST RLUC–XKZE–RJAT, 3 Maple Park, Tankersley, Barnsley, South Yorkshire S75 3DP along with a cheque made payable to "Sheffield Mutual" for the amount you wish to invest (where applicable). If you prefer you can also make your payment by debit card over the phone, or you can make a payment directly into our bank account (please see the ‘About us’ page for account details).
Where can I get further help or information?
Our friendly and knowledgeable staff would be happy to provide you with factual information about the Society’s products and services, so you can make your own decision about how to proceed. No advice or recommendations will be given and if you are in any doubt about the suitability of a product, you should seek advice from a suitably qualified financial adviser, which may incur a fee.
Do I need to provide any additional information?
To comply with regulations, the Society will require confirmation of your identification and address. We’ll aim to do this using an electronic verification system, but reserve the right to ask for appropriate documentation from you, if this is not possible. We don’t normally require identity documents from existing members. If the policy is for a child we'll need a copy of their birth certificate. This must be independently certified if saving more than £2,000.
The application process should typically take around 10 mins