Inherited ISA Allowance Plan

You can apply for an Inherited ISA Allowance Plan if:

• You were living with your spouse or civil partner at the date they passed away and were not separated under a court order, deed of separation or in circumstances where the separation was likely to be permanent
• They held an ISA at the date they passed away
• They passed away on or after 3rd December 2014
• You are aged between 18 and 80. If you already hold a Foresters ISA, no maximum age limit will apply.

Unlike normal ISAs you do not have to be resident in the UK for tax purposes to be eligible to apply for an Inherited ISA Allowance Plan. All we ask is that you hold a UK bank account so that you can make contributions into the plan.

There’s no need to inherit the money from your partner’s ISA to be eligible. You can use your own money to open the account and you don’t have to wait for the ISA to be closed.

If your spouse or civil partner has passed away and they had an ISA, your inherited ISA allowance would be as follows:

• If your partner died on or before April 5 2019:
  
  Your inherited ISA allowance will be the value of your partner’s ISA(s) at the date of death.

• If your partner died on or after April 6 2019, at the time of applying, you can either:
  
  1. inherit an ISA allowance that is the value of your partner’s ISA(s) at the date of death OR
  
  2. if your partner’s ISA(s) remains open and continues to earn interest, you can inherit an ISA allowance that is the value of your partner’s ISA(s) at account closure. Your partner’s ISA(s) can remain open up to three years after the date of death.

Our Inherited ISA Allowance Plan is classified as a Stocks & Shares ISA, and can be held in addition to a standard cash and/or Stocks & Shares ISA in the same tax year. As the inherited ISA is a one off, additional allowance which surviving spouses and civil partners are entitled to, it does not affect your own ISA allowance.

Regular and one-off withdrawals can be made from the inherited ISA, as long as the remaining balance does not fall below £500. Withdrawing money from your Inherited ISA Allowance Plan will reduce the value of your remaining investment. In good investment conditions, we may apply a final bonus at withdrawal which will increase the money you receive. In adverse investment conditions we may apply a Market Value Reduction (MVR) at withdrawal. At these times the plan value will be reduced by more than the amounts withdrawn. Conversely, if there is an entitlement to a final bonus, the plan value will be reduced by less than the amounts withdrawn.

For further information on the terms of withdrawals please take a few minutes to read the Important Information document.

Yes. We’ll accept transfers from other providers as long as they meet the conditions of the plan. If you transfer before you have used all your inherited allowance we will only be able to accept the transfer amount and no additional contributions can be added unless made to and transferred from the previous provider.

The money you pay into the Inherited ISA Allowance Plan is invested in Foresters Friendly Society’s consistently well performing Order Insurance Fund with the aim of providing investment growth. Dependent on the performance of our fund, we aim to add annual bonuses and a final bonus which will increase your plan’s value. The addition of bonuses is not guaranteed.

Within our fund, your money is spread across a number of different types of investments including property, equities, cash and UK government bonds, to help minimise risk so you can benefit from the exposure to a range of asset classes and increase the potential returns. You won’t have to make any investment choices, our expert fund managers manage the fund on your behalf.

Please spend a few minutes to read the Principles and Practices of Financial Management (PPFM) for the latest information on our investment strategy.

As a friendly society, it’s particularly important to us that our investments are managed in an ethical and responsible way. Foresters is a signatory of the Principles for Investment (PRI) which demonstrates our commitment to responsible investment, to reducing our impact on the environment and mitigating climate change risk in our investment portfolios.

When you open a plan, you can be confident that investing with us means your money will be invested in a trustworthy and environmentally conscious way. The PRI is the world’s leading supporter of responsible investment and promotes a better understanding of the investment implications of environmental, social and governance (ESG) factors.

Find out more about the 6 PRI principles we have signed up to here.

Many funds that invest in a variety of asset classes would have a mixture of equities and bonds.  These asset classes traditionally have a negative correlation, meaning that if equities go up in value, bonds generally go down in value.  The opposite happens when equities go down in value.  Over the past few years this correlation has moved to a positive correlation, resulting in equity and bond valuations moving in the same direction.  This can increase the risk of poor returns and increased volatility in fund values.

We use private assets to help diversify our fund and reduce its overall risk, as private assets are not so closely correlated with equity and bond (public) investments and so can help to balance investment volatility.  Private assets also offer the potential for higher returns as they are often long term investments.  The downside is that private assets offer lower flexibility than public assets. We monitor the overall exposure between private and public assets to ensure the mix meets our expected cashflows.

The Inherited ISA Allowance Plan doesn’t pay interest. Instead, by investing the money you pay into the plan into our Order Insurance Fund, which is a with profits fund, we provide your plan with the potential for growth by way of bonuses. Any profits generated by the fund are used to add an annual bonus to your ISA and possibly a final bonus when you withdraw your money.

The Foresters Inherited ISA Allowance Plan is classified as a Stock & Shares ISA. We have paid annual bonuses on our Stocks & Shares ISA for the past 19 years.

• In 2022 the annual bonus rate was 1.25%.

The annual bonus is applied to the amount invested (minus any withdrawals you may have made to your Inherited ISA Allowance Plan) plus any previous bonuses that have been added.

The addition of any bonus is not guaranteed and you may not get back the full amount originally invested, dependent on the investment conditions at withdrawal.

To find out more about the addition of bonuses and how we manage our fund please read our Principles and Practices of Financial Management (PPFM).

We may vary the design of a product to best meet the needs of our policyholders which may affect the timing and size of future bonuses. Therefore the above table is provided for information purposes only and should not be considered an indication of likely future performance.

There is an Annual Management Charge of 2% of the value of your ISA. We deduct charges upfront before we declare bonuses. This means there are no additional charges for you to pay. This charge could increase, but we promise it will never exceed 3% of the value of your ISA in any one year. The charges are designed to cover our costs for administering the ISA on your behalf. For more information about charges, please take a few minutes to read the Inherited ISA Allowance Plan Key Information Document and Important Information.

Being a with profits investment, your Inherited ISA will benefit from growth the longer it is kept invested. Ideally for a minimum of 5 years but the longer the better. However, you can cash-in your investment whenever you want. The cash-in value will depend on the amount invested, the amounts that have been withdrawn and any annual bonuses that have been added. Depending on the investment returns achieved and our costs, in good investment conditions we may also add a final bonus. However, in not-so-good investment conditions, we may apply a Market Value Reduction (MVR) which will reduce the plan’s value and may mean you get back less than was paid in.

If you close or transfer your Inherited ISA Allowance Plan before you fully use your inherited ISA allowance, you may only use the remaining allowance with Foresters Friendly Society.

For more details please take a few minutes to read the Important Information document.

The death benefit provided by your Inherited ISA will be paid to your estate and will depend upon the amounts invested, the amounts you have withdrawn and any annual bonuses that have been added. Depending on the investment returns that have been achieved and our costs, in good investment conditions we may add a final bonus to the plan’s value. In not-so-good investment conditions, we may apply a Market Value Reduction (MVR) which will reduce the plan’s value and may mean that your estate could get back less than you have paid in. In more favourable investment conditions the amount payable could be greater than you have paid in. The amount payable may be subject to Inheritance Tax depending on the size of your estate.

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.