Investment ISA

Make the most of your individual savings allowance

Investment ISA

Investment ISA

Our Investment ISA is a convenient and flexible way to save or invest tax-free* – with the potential to out-perform Cash ISA returns over the longer term, whilst smoothing out the short term ups-and-downs often associated with Stocks & Shares ISAs. 

Why choose this plan?

  • Invest from just £30 per month or £300 lump sum
  • Subscribe up to £20,000 in the current tax year
  • Transfer an existing ISA from another provider of up to £100,000 and let us manage the transfer for you
  • Potential for tax-free* investment growth through annual and final bonuses
  • Access to your money if you need it (subject to £250 minimum withdrawal)
  • ISA value could be reduced if withdrawn during adverse market conditions
  • The 2018/19 interim bonus rate is 4.50% (bonuses are not guaranteed)
  • The annual management charge is 1.50% p.a. with no initial or hidden charges

Please read the product Q&As and Key Information Document before proceeding.

What is an Individual Savings Account (ISA)?

ISAs are investments with tax advantages, which means that the money you put in will grow tax free. What’s more, under current legislation, which may change in the future, your returns will be completely free of income or capital gains tax and do not need to be declared on your tax return. ISAs are available to people who are resident in the UK for tax purposes. 

Four types of ISA are available - Stocks & Shares ISAs, Cash ISAs, Innovative Finance ISAs and Lifetime ISAs. Sheffield Mutual only offers a Stocks & Shares ISA, in the form of a with-profits insurance policy, which is designed for medium to long-term investments of this kind. We refer to this as an Investment ISA because the with-profits fund invests in a range of different assets including property and bonds as well as the stock market. 

Can I have different ISAs?

Yes, you can subscribe, subject to the limits, to a maximum of one Stocks & Shares ISA, one Cash ISA, one Innovative Finance ISA and one Lifetime ISA each tax year with either the same or a different provider. For the current tax year, each adult has an annual ISA investment allowance of £20,000, which you can split as you choose between a Stocks & Shares ISA, a Cash ISA, an Innovative Finance ISA and, if you are between the ages of 18 – 40, a Lifetime ISA (up to £4,000).

Are there any limits to the amount I can save in an Investment ISA?

Yes, the current maximum allowance is £20,000 or £1,666 per month for the tax year which runs from 6 April to 5 April. The minimum you can invest in the Sheffield Mutual Investment ISA is £30 per month or a single initial lump sum of £300. However, if you save any part of your annual allowance in a Cash ISA, an Innovative Finance ISA or Lifetime ISA with another provider, this should be deducted from the overall limit. The Society has an overall discretionary holding limit of £300,000 per member.

Can I add to my investment?

Yes, providing you don’t exceed the maximum annual allowance you can add to your ISA at any time during the tax year. If you are not paying in every month by direct debit, the minimum additional investment is £100. Call us on 01226 741 000 to 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 on our website for account details). You can also send us a cheque payable to Sheffield Mutual. 

In future tax years you can top up your existing Sheffield Mutual policy or you may, if you prefer, open a new policy for each tax year. Having separate policies may provide you with greater flexibility in the future. For example, if you have separate policies for each tax year and you want to start withdrawing funds, you could perhaps surrender one of the older tax-year policies to crystallise the annual bonuses and receive any possible final bonus. 

Can I stop paying into the ISA?

Yes, you can stop or vary your payments during a tax year. However, if you do not make a payment in the whole of a tax year, and you want to start paying in again the following year, you will have to make a new application.

Who can save in an Investment ISA?

Anyone over the age of 18 or who will be 18 during the tax year in which the ISA is opened, but only after their 18th birthday. You must also be resident in the UK or, if not, be performing duties as a Crown employee serving overseas and paid out of the public revenue of the United Kingdom, in a civil partnership or married to such a person. You cannot pay into a Stocks & Shares ISA with more than one provider in a single tax year.

Can I select the term of my Investment ISA?

There is no specific term, but to take full advantage, investing in this type of policy should be viewed on a medium to long-term basis.

How do my savings grow?

Depending upon the performance of its investments, Sheffield Mutual will declare a bonus rate annually in March or April and this will be applied to your policy for the tax-year. Obviously, the amount of bonus credited will depend upon how much you have saved and for how long. Bonuses, when declared, are calculated daily (after deducting charges) and added to your policy monthly, net of charges, on a compound basis. You will receive a statement during April notifying you of the amount of bonus and the current value of your policy. There is also the possibility of a final (terminal) bonus on closure of the ISA. Bonuses are not guaranteed.

Where will my money be 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 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 assets we invest in are: 

  • 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.
  • 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.
  • Fixed interest investments – such as Government Gits or Corporate Bonds.
  • Commercial Mortgages – from a small portfolio providing a fixed rate return.
  • Cash.

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 (Find out more). 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.

Unlike Stocks & Shares ISAs that are invested directly in shares or in a share-tracking index, the money you invest in the Investment ISA will not normally fluctuate from day to day. However, should you wish to close, transfer or withdraw funds from your ISA during adverse investment conditions, the Society may apply a Market Value Reduction to the policy fund, which could, in some circumstances, result in you receiving back less than you have paid in. Therefore the amount you will receive on repayment is not guaranteed.

Can I withdraw from my Investment ISA?

Yes, you can withdraw a minimum of £250 at any time or you can close your plan. However, if you withdraw from or close your policy in times of adverse investment conditions, a Market Value Reduction may be applied to the policy fund which could, in some circumstances, result in you receiving back less than you paid in. 

Are there any charges?

Yes, the Society will deduct 1.5% of the value of the ISA policy fund each year to cover administration costs and expenses. The annual charge is normally deducted from the declared annual bonus amount before it is added to your policy. However, it would be deducted from the policy fund should the bonus be less than the annual charge.

What happens if I die?

On early death, the Society will pay 101% of the policy value at the date of death to either your personal representative(s) or to your estate. Bonus will be credited tax-free until the date of death. Your spouse or civil partner will be able to pay into an ISA in their own name an amount equivalent to the proceeds of your ISA at the date of death, in addition to their own ISA allowance.

Can I transfer my ISA with another provider to Sheffield Mutual?

Yes, subscriptions can be transferred freely between Cash, Stocks and Shares and Innovative Finance ISAs.

You can transfer some or all of the money saved in previous tax years with another provider to an Investment ISA with Sheffield Mutual, up to £100,000 per calendar year, without affecting your annual ISA investment allowance.

You can also transfer all of the money saved in the current tax year with another provider to an Investment ISA. These transfers must be the whole amount saved in that tax year up to the day of transfer. Where money saved in the current tax year is transferred, it will be treated as if it has been invested directly into the receiving ISA in that tax year.

You will then be able to save up to the full remaining balance of the allowance for that tax year, or you may within the overall limit subscribe to a Cash ISA later in the current tax year without breaking the ISA rules. Transfers from previous tax years will be held in a separate ISA transfer policy from any current tax year subscriptions.

If you already have an ISA transfer policy with Sheffield Mutual, you can choose whether to ‘top-up’ your existing policy or open a new one. See ‘Can I add to my investment?’ section for further information.

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 Investment ISA?

Simply click on the “Get A Quote / Apply Now” button where you will have the option to:-

  • Get a quote on-line
  • Apply on-line or
  • Download an Application Pack
  • View/Download/Print the Product Brochure and Key Information Document.

If you choose to apply on-line, 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 for the initial premium made payable to "Sheffield Mutual" (where applicable). If you prefer we can take your first premium by debit card over the phone.

Where can I get further help or information?

Our friendly and knowledgeable staff will be happy to provide you with factual information about the Society’s products and services, so you can make your own choice 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.

Need help with some of the language we've used? Click here for our Jargon Buster. 

Bonus – an amount we will add to your policy linked to how well the with-profits fund has performed. These can be annual bonuses or a final bonus, added when your ISA is closed or transferred. 

Cash ISA – a tax-free deposit account which earns interest. Although less risky and more certain than a Stocks & Shares ISA, the returns may be relatively modest over the longer term. 

Dividends – income from shares paid by companies to shareholders. 

Innovative Finance ISA - an ISA qualifying investment relating to peer to peer loans. These are not currently covered by the Financial Services Compensation Scheme. 

Lifetime ISA – an ISA for people between the ages of 18 and 40, designed to save for a first home and retirement. 

Market Value Reduction – an adjustment made to the amount we pay out, should your policy fund be worth more than your fair share of the with-profits fund. 

Policy Fund/Policy Value – the value of the amount paid in (less any withdrawals) plus any bonuses added to your ISA. 

Stocks & Shares ISA – a tax-free wrapper for investments other than cash deposits. 

With-Profits – the name given to a type of fund which normally contains a mix of assets and shares the profits or losses with the policyholders. Returns are ‘smoothed’ whereby some profit is held back in good years to maintain returns in poorer investment years.

* All references to taxation are based on the Society’s understanding of current tax legislation and practice, which may change in the future.

The application process should typically take around 10 mins

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