Jargon Buster
Or to put it simply ... some of the terms explained in plain English:
Tax Exempt Savings Plan
A tax-efficient savings plan only available through a Friendly Society. Provides a tax-exempt cash sum at the end of a specified period - from 10 to 25 years. The money that you invest in this plan is invested in a fund which is free of tax on both income and capital gains, although dividends earned on equities within the fund will have been taxed at source and cannot be reclaimed.
Premiums
The amount you pay into the plan each month.
Direct Debits
The easy, efficient way to make regular monthly payments into the Tax Exempt Savings Plan. 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.
Tax Exempt Cash Payment
Your cash payment is free of Capital Gains and Income Tax at the end of the term. Tax benefits may vary as a result of statutory change and their value will depend on individual circumstances.
