Jargon buster
Or to put it simply ... some of the terms explained in plain English:
ISA
ISA stands for Individual Savings Account. It allows you to take advantage of tax-efficient savings and growth - and you do not have to pay Income or Capital Gains Tax on the return from your savings. Our ISA aims to achieve long-term capital growth by investing your money in the Foresters With Profits Fund.
Stocks & Shares ISA
Our ISA invests in the Foresters Friendly Society With Profits Fund. As this underlying With Profits Fund includes stock market investments, our ISA is classed as a Stocks & Shares ISA. If this is to be your only ISA during a tax year, you can invest up to £10,200.
Financial year
The financial year (or tax year) runs from 6th April to 5th April the following year. This means that you have up until 5th April to contribute to an ISA for that year.
Tax-efficient
You do not have to pay Income or Capital Gains Tax when you cash in your ISA. However, you should bear in mind that the favourable tax treatment might change in the future.
Contributions
The amount you pay into your ISA can be either a monthly saving or a lump sum contribution - or a combination of both. If this is to be your only ISA during a tax year you can invest up to £10,200.
Direct Debits
The easy, efficient way to make regular monthly payments into the ISA. Payments are transferred direct from your Bank or Building Society account.
With Profits Fund
A fund that invests in a balanced mix of investments such as
property and stock market investments. In good years, we may
hold back some of the return and use it to top up bonuses in years
when the fund performs less well. This is called
"smoothing".
Annual bonuses may be declared annually and possibly a final bonus
may be added at the end of the plan. Bonuses are not
guaranteed and will depend on the future performance of the With
Profits Fund and how we decide to distribute any profit.
Market Value Reduction (MVR)
This is a deduction we may make when you fully or partially cash-in your ISA. We will not apply an MVR on death. Its purpose is to be fair to both Members leaving the fund and those staying by ensuring that the cash-in value is not unfairly higher than the market value of the plans assets and that a fair share is left for the remaining Members.
This adjustment could have the effect of reducing the value of your ISA at that time and in some circumstances could mean that you get back less than you have paid in.
