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
  • 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

Product information

  • 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.

Calculator

The policyholder must be aged between 11 and 55 (on their next birthday) to apply for this policy.

See how much you could save

Please enter your date of birth
Years
Years
Please select a term between 10 and 25 years
  • Save monthly
  • Save annually
  • Please choose an amount between £5 and £25
  • Please choose an amount between £50 and £270
Please note: You can also enter the term and amount in the boxes instead of using the slider. Quotes are for illustration purposes only and what you get back depends on how your investment grows, meaning you could get more or less than this.

 

You might get back the following amounts, by investment growth per annum:

2%

 

5%

 

8%

 

Please read the Key information document and Important information documents before applying for a Tax Exempt Savings Plan with Life Insurance.

How to apply

Step one

Applications should take no more than 10 minutes

Step two

Make sure you have your national insurance number on hand

Step three

Complete our straightforward health questionnaire

Step four

Confirm your details are correct and submit your application

Ready to proceed?

Other ways to apply

Apply over the phone

Not got time to fill in the application now? Or do you have some questions before you apply? No problem, we're happy to chat through the application process over the phone at a time to suit you. Either call us on 01226 741000, or click the link below and we can call you back at a time to suit you.

Download an application pack

Want a bit more time to fill in your application? Download an application pack and send it back to us when you're ready. If you don't have access to a printer, we can send you an application in the post.

How it works

  • Opening a Tax Exempt Savings Plan with Life Insurance

    Opening a new plan is easy and should take no more than 10 minutes to complete online. Simply choose how much you want to save and for how long. Have a question or query? You can also contact us via phone on 01226 741000, a member of our team will be more than happy to help.

  • How are bonuses calculated?

    Unlike banks who add interest to their accounts, we add bonuses to our members' plans. Bonuses are calculated at the appropriate rate based on your guaranteed final amount, not the amount of premiums you pay and are added to your policy on an annual basis. On maturity or death, you will receive your guaranteed final amount plus bonuses added during the life of the policy. Find out more in our FAQ section below.

  • Any guarantees?

    Providing the plan runs to its planned maturity date with all premiums paid, the Society will, depending on the amount you choose to save and for how long, guarantee a minimum final amount for more than you have paid in on maturity or death. The final value of your plan will depend upon investment performance, but bonuses are declared each year, and these are added to your guaranteed final amount. Once added, these bonuses cannot be taken away.

  • Can I make withdrawals?

    You cannot make any withdrawals, but if your circumstances change, you can surrender your policy. However, the plan is designed for medium to long-term investment and the surrender value may be less than the amount you have paid in. Please note, you may also be liable for additional tax on any investment gain. The amount of the gain may result in a reduction in the amount of any old-age relief or child tax credit being received.

  • What about charges?

    We take a management contribution of 50% of premiums paid in the first year and 6% of the annual premium amount in the second and subsequent years. These are to cover the cost of expenses incurred in setting up the policy and maintaining it thereafter. The charges are deducted from the overall fund and taken into account when we calculate the level of bonuses we are able to pay.

Frequently asked questions

Our most commonly asked questions surrounding the Tax Exempt Saving 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.

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.

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

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