Saving in a With Profits investment sounds like a good thing – watch Mr Money’s video to see what it could do for you…

Wednesday, July 2, 2014

As a friendly society, we're big fans of With Profits, but we know that many people don't really understand why they're different to other savings plans. 

With Profits savings plans sit comfortably between no-risk cash savings and higher-risk stocks and shares and are an option for anyone who wants to save regularly and give their money an opportunity to grow.

Want to know more? Watch this:

Mr Money Video - A Simple Guide to With Profits Savings - Foresters Friendly Society


An animated with profits video that explains what with profits savings plans are and how they work. A simple guide to With Profits savings. Saving up for things is a good idea. But how do you get a good return on your savings? If you put your money in a traditional interest-only savings account, it won't get much chance to grow. So, what can you do? Take a punt on the stock market? It could go really well. Or really badly, if you don't know what you're doing. But there are other ways. One alternative is called With Profits - it's a less risky approach to investing, but offers more potential for your cash to grow than interest-only savings accounts. This is partly because With Profits is designed for longer term saving - usually over 10-25 years - so you can't access your money in the same way that you can with an interest-only savings account. And also because, during that time, a With Profits Fund puts your money, together with other savers' money, to be invested in a variety of different ways. This mix works to protect your money's exposure to risk because it's not all invested in one place. As with many savings plans, there is still a risk that in certain circumstances you may get less back than you paid in, but this is lower than with some other investments, such as direct investment into stocks and shares. One thing that's different about With Profits investments is that they don't pay interest. Instead, there's the potential for growth through bonuses, which can be added to your plan and paid out at maturity, although you should be aware that these are not guaranteed. Bonuses are usually added every year and there may be a final bonus when the plan matures, too. The amount of each bonus depends on how well the investments in the With-Profits Fund have performed. When added, bonuses are calculated on the total amount you will have paid in to your plan from start to finish. So if you have a 10-year With Profits-based plan and you pay £25 in every month, which is £300 per year, any bonus added will be based on £3,000 - even at the end of the first year! Something else that's different about With Profits is that it aims to help your investment grow steadily, while protecting it from the ups and downs of the Stock Market. This process, called smoothing, works by holding back some of the investment return in years when the With Profits fund's investment performance is good… …and then using it to top up bonuses in years when the fund may perform less well - another reason why it's less risky than investing in the stock market directly. At Foresters Friendly Society, we launched our first With Profits-based savings plan back in 1901 - today, we offer a range of plans for all the family. To find out more, click or call and 0800 988 2418. Please be aware that this is a financial promotion and should not be considered to be advice.


This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice.  You should contact a financial adviser, who may charge a fee, if you want financial advice. 

You should also be aware that in some investment conditions and depending on the product you have chosen, you may get back less than you have paid in.