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Guaranteed Savings Plan

Future university costs or the trip of a lifetime, it’s easier to plan ahead with a long term savings plan you can rely on

Guaranteed Savings Plan

Frequently Asked Questions

If you are thinking about starting long-term savings for your future and have questions about our Guaranteed Savings Plan please find the most commonly asked questions listed in our FAQs below. If you have a question which isn't covered here, please let us know.

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About the Guaranteed Savings Plan

What is the Guaranteed Savings Plan?

The Guaranteed Savings Plan is a long-term regular savings plan designed to provide you with a guaranteed return at the end of your chosen term.

When will I receive a pay-out?

The Guaranteed Savings Plan pays out at the end of your chosen term, for example on a specific birthday, anniversary or retirement or a certain number of years from when you take it out. You can select a term from 10 years to 25 years.

Are there any age restrictions?

The Guaranteed Savings Plan is available to anyone aged between 16 and 80 years old.

Can I use the Guaranteed Savings Plan to save for a child?

You can use the policy to save for a child. As the plan will be taken out in your name, you will have the reassurance that the money will be paid out to you, not the child, when the plan matures so that you can decide what the money is spent on.

Can I access my savings?

The monthly amount you pay into your plan should be seen as a long-term investment so as such your savings will not be easily accessible. If the plan is cashed-in early, or you stop making contributions, then you may get back less than you have paid in, or nothing if this is in the first year.

What guarantees do you provide?

The plan guarantees to pay out more than you have paid in when it comes to the end of its term. What's more the higher your monthly contribution, the larger your in-built growth will be. The guarantee is based on you maintaining your contributions for the full term of the plan.

Are there any charges?

As with any investment, there are costs in running the fund in which your contributions will be invested - including the costs of buying and selling assets. We deduct charges before we declare bonuses meaning that there are no additional charges for you to pay. For more information about charges, see the Guaranteed Savings Plan Key Features Document.

Finding the right plan for you

How do I choose the right plan?

You should consider your ability to make payments throughout the term of any plan. You may also wish to think about your attitude to risk and the Product Performance when considering a plan.

I'm not sure if the Guaranteed Savings Plan is right for me. What should I do?

If you're unsure as to the suitability of this product you should seek advice from a Financial Adviser. You may have to pay for this advice.

What is a long-term savings plan?

Long-term savings plans intend to invest your money for at least 5 to 10 years, with the aim of maximising the potential for growth.

Payments into the plan

Can I choose how much my monthly contribution is?

Yes. When you take out a Guaranteed Savings Plan, you can choose to pay a regular monthly contribution of between £50 to £100. We will collect your payments by Direct Debit from your bank account.

Can I choose how long I want the plan to run for?

Yes. The Guaranteed Savings Plan offers a range of terms from 10 to 25 years. Once you have decided on the plan's term, this cannot be changed.

How do I pay?

Payments are by Direct Debit - which is why we'll ask you to provide your bank details when you apply.

What am I committing to?

Once you select the term, which can be from 10 to 25 years, you must continue payments throughout the full term of the plan.

Can I stop and start my contributions?

No. The Guaranteed Savings Plan is designed to be a medium to long-term regular fixed commitment.

What happens if I stop paying?

If the plan is cashed in prior to maturity or you stop paying contributions, then you may get back less than you have paid in or nothing if this is in the first year.

What happens if I die?

If you die, a refund of contributions paid to date will be payable to your estate. This may be subject to inheritance tax.

Returns on the plan

How much could I expect to receive?

The amount you will receive is made up of a guaranteed maturity amount (equal to your contributions made throughout the term of the plan plus any in-built growth) plus any bonuses which have been added during the term and a potential final bonus. The addition of bonuses is not guaranteed. You can request an information pack including a personal illustration.

Where is the money invested?

Any money paid into the Guaranteed Savings Plan is invested in Foresters Friendly Society's with profits Order Insurance Fund. Here, we manage your money, alongside other investors' money. We spread all the money paid into the fund across a number of different types of assets that may include property, UK government bonds, equities and cash. If the return from any one particular asset type is poor, the investment may be protected from the full impact of this fall as other assets forming part of the overall investment may perform better.

What interest does the plan pay?

The Guaranteed Savings plan does not pay interest. Instead, the with profits Order Insurance Fund provides your plan with the potential for growth above and beyond the guaranteed in-built growth by way of bonuses. The level of bonuses you receive depends on the performance of our Order Insurance Fund. The addition of any bonus is not guaranteed.

How do bonuses work?

At the end of each year, we aim to declare an annual bonus, based on how the fund performs and the costs incurred. In addition, when the Guaranteed Savings Plan matures, Foresters may add a final bonus based on the overall investment growth achieved and expenses incurred.

This is different from a Bank or Building Society account where interest is added, because any growth on the investment with Foresters depends on the performance of the underlying fund.

Although in some investment conditions the growth in the Guaranteed Savings Plan might not be as much as that on an interest-paying account, investing in this way means there is the potential for growth over and above the level which might be achieved on interest-paying accounts.

The addition of bonuses is not guaranteed and therefore it is possible that your Guaranteed Savings Plan might not receive any annual and/or final bonus.

About Foresters Friendly Society

Who is Foresters Friendly Society?

Foresters Friendly are a mutual society, founded in 1834 by ordinary people with a common purpose - to support each other through financial and other difficulties.

We've been looking after our members, and their finances, for over 180 years, offering care and protection through relevant affordable financial products.

Since 1834 our aim has been to be open, approachable, honest and fair, treating all our members as individuals.

We always put the interests of our members first.

How safe is my money?

You'll be pleased to hear that our funds have grown steadily over the years and our financial position remains strong. (Source: Reports & Accounts 2015). However, note that past performance is not a guide to the future.

However, if in the unlikely event that Foresters Friendly Society were to be declared insolvent, you would be able to make a claim under the Financial Services Compensation Scheme.

About Friendly Societies

What is a Friendly Society?

Friendly Societies have been around for hundreds of years. They were founded on the idea of mutuality - that if a group of people contributed to a mutual fund, an individual within the group could benefit in a time of need. The principles still apply - friendly societies are owned by, and operate in the interests of, their members. Unlike public limited companies, they use revenues to the benefit of their members rather than distributing profits to their shareholders.

How do Mutuals perform, compared to PLCs?

With no shareholders to answer to, mutual societies can ensure their profits are only used for their members’ benefits by sharing this amongst members, or re-investing to provide potentially better returns, better value or higher levels of service.

Over the last 10 years, the average mutual with-profits policy produced 29% more than an equivalent from a PLC insurer – that’s around £11,400 more after 25 years for a £50 per month policy.

(Source: Association of Financial Mutuals:  AFM Key facts about mutual insurers and friendly societies November 2014)

What is a Mutual?

UK financial organisations are either authorised by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) and can be regulated by one or both regulators, and are either mutuals or public limited companies (PLCs). Unlike a PLC, a mutual organisation has no external shareholders to pay in the form of dividends and does not seek to make large profits or capital growth.

Mutual organisations are owned and run for the benefit of their members and their profits are usually re-invested for the benefit of members, although some may be used for internal finance to ensure the mutual is sustainable, safe and secure.

Today, UK mutuals account for over £116 billion in revenue every year and 1 in 3 people in the UK are a member of at least one mutual. (Source: The Mid-Term Mutuals Manifesto 2013 and the Mutual 2013 Yearbook)

Membership and Extras

I read somewhere about benefits - but I imagine I pay for those somewhere?

When you take out one of our policies or plans, you automatically become a member of Foresters. As a mutual, we don't have to answer to external shareholders. Instead, we use all our profits to benefit our members. All Foresters customers can take advantage of Foresters Extras, a range of benefits we offer at no additional cost.

Do I get any additional benefits as a Foresters customer?

All our customers benefit from Foresters Extras, a range of benefits we offer at no additional cost.

Help and support

Where can I get help?

For help and support, please contact Foresters Friendly Society.

Guaranteed Savings Plan - Foresters Extras >>

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