Tax Exempt Savings Plan with Life Insurance
Tax-free savings with added protection for you and your loved ones
- Only available through friendly societies
- Save from £5 to £25 per month or between £50 and £270 per annum tax-free
- A guaranteed tax-free lump sum on maturity or death plus possible bonuses
- Peace of mind that your loved ones will be taken care of
If you surrender the plan before maturity (which is the term you select when first starting the plan), you may get back less than you have paid in. Tax treatment depends on individual circumstances and may be subject to change in the future. Bonuses are not guaranteed.
About this policy
Only available through friendly societies, our Tax Exempt Savings Plan with Life Insurance (TESPWL) allows you to save tax-free in addition to ISA/JISA allowances. You can choose the term of your plan between 10 and 25 years which could make it the perfect option if you want to save for the medium to long-term with added life cover protection.
There's the added convenience of saving monthly or annual amounts, which can help to build up a tax-free lump sum at maturity for you or for your loved ones in the event of your death.
The plan includes life cover and would pay out the guaranteed final amount plus any bonuses that may have been added.
Please be aware that a surrender penalty will apply if cashed in before maturity.
What are they?
The TESPWL is a great way to save tax-free in addition to your ISA/JISA allowance with the added benefit of it paying a minimum guaranteed amount on death or maturity.
Because it is a tax-free savings plan, under current legislation, the maximum an individual can save is £25 a month or £270 annually. It is also a "qualifying life policy" with a special tax status please see FAQ below for more information.
Want more cover than this? Our Sheffield Protect could be the perfect alternative choice.
Who are they for?
Anyone can have a plan who is aged between 11 and 55 (on their next birthday), or have several plans within the overall limits (set out above). Please note that the maximum figure includes any tax-exempt savings plan held with another friendly society and if you are aged 55 next birthday the maximum term will be 10 years, as the plan can only run until age 65.
If you are 55 or over, you could consider our Tax Exempt Savings Plan (without the life insurance).
Why open one?
Our TESPWL is a great way of saving tax-free and provides a guaranteed final amount on maturity or death, as well as the added peace of mind of knowing you and the people you care about the most are taken care of.
As a mutual society, we specialise in offering with-profits policies, which aim to offer greater potential returns than a bank. What does this mean? We pool our members' monies together and invest in a range of different assets to provide a low to medium risk investment - appealing to anyone with a more cautious approach to saving and investing.
Frequently asked questions
Our most commonly asked questions surrounding the Tax Exempt Savings Plan with Life Insurance can be found below.
Absolutely, you choose the period over which you would like to save, with a minimum term of 10 years and a maximum of 25 years. If you are aged 55 next birthday the maximum term will be 10 years, as the plan can only run until age 65 next birthday.
Anyone aged between 11 and 55 next birthday can start a plan or have several plans within the overall maximum levels of £25 per month or £270 annually. If the child is under 11 you might want to consider our Tax Exempt Savings Plan (without life insurance).
We invest 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 anyone with a more cautious approach to investment. Our investments include property, shares of UK companies, government gilts, corporate bonds, commercial mortgages and cash.
The proportion held in each of these will vary depending on market conditions. You'll be pleased to know that 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.
Instead of interest, we pay bonuses on all of our with-profits products.
We invest our funds as described above and receive a return on those investments, which can vary from year to year. In March/April we review the returns achieved during the previous calendar year and declare a bonus rate for each product 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. However, once bonuses have been added to your plan they will not be taken away, providing the policy runs to maturity or you die before the end of the term.
Bonuses are calculated at the appropriate rate based on the ‘sum assured’ (your guaranteed final amount), not the amount of premium paid. On maturity or death you will receive the sum assured plus bonuses added during the life of the policy.
We also try to ‘smooth’ returns over the life of the policy by retaining some of the investment return in good years to maintain bonus rates in less positive years. However, to ensure you receive your fair share of returns on your policy over its lifetime, an additional final bonus may be paid on maturity. Payment of this type of bonus depends entirely on investment performance and the rate at which annual bonuses have been added. It is not guaranteed and, if paid, the rate may vary from year to year. We will send you a statement every year (usually in April).
This might seem like an obvious question, but yes, life cover is included with this plan. The amount of life cover will be the guaranteed final amount plus any bonuses which may already have been added. This will be paid if you die before the end of the selected term. In order for us to provide life cover we will require you to complete a short medical questionnaire and we reserve the right to contact your doctor for further information if necessary. Any undisclosed condition may result in a death claim being invalid.
When you open a policy with us, you will automatically become a member of the Society (adult policyholders only). As well as being able to have your say on how the Society is run each year, you will also have access to various discretionary benefits when available, such as optical and dental grants, as well as exclusive access to a range of discounts and offers.
A qualifying policy is basically a life insurance policy whose terms meet a set of certain conditions. These include rules about the policy term, regularity and level of premiums paid and the minimum final amount.
Our TESPWL is a "qualifying life policy" with a special tax status. You cannot pay in more than a total of £3,600 in a 12 month period into any qualifying policies you may have, either with us or any other life company or friendly society (excluding pure protection policies and protected qualifying policies issued before 21 March 2012). Please contact us if you need help or guidance in relation to the qualifying policy rules or view our guide.
The Tax Exempt Savings Plan with Life Insurance is designed for applicants in good health at the outset. The medical questionnaire you complete during your application will be sent to our underwriter who will either approve you on the standard terms/sum assured quoted to you, reduce your sum assured due to medical history/lifestyle or reject the application. We will notify you via your preferred contact method to discuss if required.
Need some further assistance? Our knowledgeable team would be happy to provide you with factual information about our products and services, so you can make your own decision about how to proceed. However, we are unable to give any financial advice or recommendations on the suitability of our products. If you are unsure, you should seek advice from a qualified financial adviser, which may incur a fee.
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. If the policy is for a child (min 11 next birthday) we'll need a copy of their birth certificate. This must be independently certified if total saving is more than £50 per month.
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