Tax-free savings don’t end with ISAs when you’re with a friendly society
Monday, March 17, 2014
We may frown upon the celebrities, business tycoons and giant corporations exposed as tax dodgers, but the fact is that no one wants to pay more tax than they have to.
That's one reason ISAs are popular - but did you know that there are other savings schemes that beat the taxman, too?
There is much talk about ISAs this time of year, and with good reason - the end of the tax year is fast approaching, so it's your last chance to top up savings and investment plans and make the most of this year's annual ISA allowance.
But let's not forget there's a brand new tax year beckoning, too, which means another chance to make the most of tax-free savings.
And those tax-free options aren't restricted to ISAs - there are other savings plans, unique to friendly societies, that you can use alongside ISAs that allow you to save for your goals without paying income or capital gains tax.
These are called Tax Exempt Savings Plans, and here are six good reasons to start one with Foresters Friendly Society:
1. It offers tax-free saving beyond ISAs
Tax Exempt Savings Plans (TESPs) are long-term regular savings plans that provide a tax-free lump sum at the end of a chosen term. All you have to do is make continual monthly contributions for the full length of that term, and you will receive the cash lump sum free of capital gains tax and income tax when the plan matures. It really is as simple as that.
Please don't forget that tax rules may change in the future and depend on individual circumstances.
2. Payments don't cost the earth
Saving for your future doesn't have to cost much - the monthly payments for our TESP are just £25 a month. You can choose how long you want to save this for over any period between 10 and 25 years. You can even select the exact date that you receive your tax-free sum - for example, if you're saving for a specific birthday or anniversary.
3. High street banks can't offer these plans
Only friendly societies, like us, can give you the additional tax advantages of a Tax Exempt Savings Plan, which provides you with a cash sum payout, free of capital gains tax and income tax, and which can be held alongside an ISA.
4. Guaranteed tax free cash sum
With TESPs you will receive a guaranteed tax free cash sum at maturity providing all the contributions are paid throughout the term of the plan. Your monthly contributions go into our Order Insurance With Profits Fund, which means there is also the possibility of bonuses to be added to your plan. The amount of bonus added depends on how the With Profits Fund investment performs, which means that the addition of bonuses is not guaranteed.
It's important to point out that if you stop making contributions in the first year, the plan will lapse with no value and we won't be able to refund your money.
5. You can save for your children, too
Child Tax Exempt Savings Plans work in the same way as adult TESPs. The child must be at least 16 years of age and have held the plan for at least 10 years to receive the proceeds.
6. There are even extra benefits
As a Foresters member you, or your child if you are saving for them, will have access to Foresters Extras - a range of benefits available at no additional cost which includes discretionary grants to help you to cover the cost of things like higher education and healthcare. Find out more about our Extras here.
Our membership benefits are not regulated and are regularly reviewed by us to ensure they are relevant to our members.
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