Tax Exempt Savings Plan

A plan only available through friendly societies (like us) and with the added benefit of saving tax-free in addition to your ISA allowance

  • Affordable plans starting from just £5 per month
  • Decide how long you want to save, between 10 and 25 years
  • Guaranteed amount on maturity, plus possible bonuses
  • Start saving tax-free for something special

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.

Product information

  • About this policy

    Our Tax Exempt Savings Plan (or TESP for short) allows you to save tax-free in addition to your ISA allowance. 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.

    There's the added flexibility to save monthly or annual amounts, which can help to build up a tax-free lump sum for you or your loved ones.

    Please be aware that a surrender penalty will apply if cashed in before maturity.

  • What are they?

    These plans are only available through friendly societies and are a way to save tax-free in addition to your ISA allowance.

    Because it is a tax-free savings plan, under current legislation, the maximum an individual can save is £25 a month or £270 annually (this includes any tax exempt plan held with another friendly society). This plan is also a qualifying life policy - more information on this can be found in our FAQs below.

    Want to save more than this? Our Regular Savings Plan or Investment ISA could be the perfect alternative choice.

  • Who are they for?

    Anyone can have a plan or have several plans within the overall maximum levels of £25 per month or £270 annually. 

  • Why open one?

    Get into the habit of saving tax-free with the certainty you'll receive a guaranteed amount at the end of the term (provided all premiums are paid), plus any added bonuses - what's not to like?

    Start saving today for something special - want to increase your retirement fund, or build up a house deposit? Our TESP could help you achieve your financial goals - whatever they may be.

Saving calculator

Use our calculator to get an instant quote about your potential savings.

Anyone can have a plan, but the proposer (person opening the plan) must be 16 years of age.
Please enter your date of birth

See how much you could save

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.

How to apply

Step one

Confirm you have read and understood our Product and Key Information

Step two

Decide how much you want to save and for how long

Step three

Complete our straightforward online application

Step four

Confirm your details are correct and submit your application

Ready to proceed?

Other ways to apply

Apply over the phone

Got any questions or prefer to apply over the phone for our Tax Exempt Savings Plan? No problem one of our friendly team will be happy to take you through the process. 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

    There are a number of ways you can apply for this plan, online, over the phone or by post - pick the option that is best for you.

  • How are bonuses calculated?

    Unlike banks who add interest to their plans, we add bonuses to our members' policies. Bonuses are calculated at the appropriate rate based on your guaranteed final amount, not the amount of premiums you pay. On maturity 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, we will guarantee a minimum final amount for more than you have paid in (depending on the amount you want to save and for how long). 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. 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?

    To cover the cost of expenses incurred in setting up your policy and maintaining it, we take a management contribution of 50% of premiums paid in the first year and 7.5% of the annual premium amount in the second and subsequent years. The charges are deducted from the overall fund and taken into account when we calculate the level of bonuses we are able to pay. More information can be found in our FAQs below.

FAQ

Our most commonly asked questions surrounding the Tax Exempt Savings Plan can be found below.

Absolutely, you may choose the period over which you would like to save, with a minimum term of 10 years and a maximum of 25 years.

 

Yes, even though a child does not have their own income, an adult can pay into a plan on their behalf. Check out our Children's Tax Exempt Savings Plan for more information.

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 type of policy for that period. 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 they will not be taken away, providing the policy runs to maturity, or if you die before the end of the term.

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.

Our Tax Exempt Savings Plan is a "qualifying life policy" with a special tax status, which means 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). 

In the event of death before the end of the term, we will refund all premiums paid plus interest up to the date of death. Interest is calculated using the Bank of England base rates that have applied during the term of the policy + 1%, though this could be changed in the future by the Society. Don't worry, notice of any change will be given.

No, this plan does not include any life cover. For more information on our life insurance products, please visit the life insurance section on the website. 

To cover the cost of expenses incurred in setting up your policy and maintaining it, we take a management contribution of 50% of premiums paid in the first year and 7.5% 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.

 

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.

Our team would be more than 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 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.

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What we do

Our products and services have been developed to include a simple range of trusted savings, investment and protection plans - with a particular emphasis on tax-efficient savings and investment plans for the whole family.

Our members are the people we care about the most. Any surplus profit is distributed to provide you with the best possible returns combined with the highest standards of personal service and ethical business practices.

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