Inherited ISA Allowance Plan

Invest your tax-free inherited ISA allowance in our flexible Stocks & Shares ISA, with the potential for growth

Inherited ISA Allowance Plan

Frequently Asked Questions

Want to know more about investing for the long-term in our Inherited ISA Allowance Plan? Take a look at the most commonly asked questions in our FAQs below. Simply click 'Show info' to display the answer. If you have any questions that are not answered here, please contact us.

About the Inherited ISA Allowance Plan

What is the Inherited ISA Allowance Plan?

If your Spouse or Civil Partner died on or after 3rd December 2014 you’re entitled to inherit an additional tax free NISA (New ISA) allowance. The allowance is up to the value of your Spouse or Civil Partner’s NISAs on the date they passed away.

The Foresters Friendly Society Inherited ISA Allowance Plan is a Stocks & Shares NISA that we have set up specifically to accept contributions as part of a NISA allowance which has been inherited by a surviving Spouse or Civil Partner.

Finding the right plan for you

Who can apply for an Inherited ISA Allowance Plan?

You may only apply for an Inherited ISA Allowance Plan in the event of the death of your Spouse or Civil Partner, if:

  1. you were living with the deceased at the date of death and were not separated under a court order, deed of separation or in circumstances where the separation was likely to be permanent
  2. the deceased held a NISA at their date of death
  3. the date of death was on or after 3rd December 2014

Unlike normal NISAs you do not have to be resident in the UK for tax purposes to be eligible for the inherited NISA allowance. However, you must hold a UK bank account to be able to make contributions into the plan.

You do not need to inherit the money from your Spouse or Civil Partner’s NISA to be eligible. You can use your own money to open the account and you don’t have to wait for the NISA to be closed or repaid.

Does the inherited NISA allowance affect my current NISA allowance?

No, this is a one off additional allowance and does not affect your normal individual NISA allowance.

Can I change my NISA provider?

You can transfer your plan to another provider at any time just like a normal NISA, as long as the new NISA provider allows it.

However, if you transfer before you have used all your inherited allowance you will not be able to make further contributions to the new provider. You will, however, be able to make further contributions to the Foresters Friendly Society plan which can then subsequently be transferred to the new provider.

Will you accept transfers from another provider?

Yes, Foresters will accept transfers from other providers as long as they meet the plan conditions. As above Foresters Friendly Society will only be able to accept the transfer amount and no additional contributions can be added unless transferred from the previous provider.

I'm not sure if an Inherited ISA Allowance 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.

Payments into the plan

What is the minimum payment?

You can choose to contribute regular amounts from just £50 per month by Direct Debit, invest lump sums or, if you prefer, you can use a combination of both. If you wish to invest lump sums, a minimum £500 lump sum contribution is required to open an Inherited ISA Allowance Plan, then top ups of at least £250 can be made.

What is the maximum payment?

The maximum amount that can be invested (your inherited allowance) is the value of the Spouse’s or Civil Partner’s NISA at the time of their death.

What happens if I cash-in my Inherited ISA?

You can cash-in your Inherited ISA Allowance Plan whenever you want, but you may get back less than you have paid in. The cash-in value will depend on the amounts invested, the amounts that have been withdrawn and any annual bonuses that have been added, i.e. the accumulated fund. Depending on the investment returns achieved and our costs, in favourable investment conditions we may also add a final bonus to the Inherited ISA’s accumulated fund. However, in adverse investment conditions we may apply a Market Value Reduction (MVR) which would reduce the accumulated fund.

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.

What is a Market Value Reduction (MVR)?

This is a deduction we may apply when you make regular or partial withdrawals, fully cash-in your Inherited ISA Allowance Plan or the Inherited ISA Allowance Plan is paid out on your death. Its purpose is to be fair to both planholders leaving the fund and those staying by ensuring that the cash-in value is not unfairly higher than the market value of the plan’s assets and that a fair share is left for the remaining planholders. This adjustment will reduce the value of your Inherited ISA Allowance Plan, i.e. the accumulated fund at that time and in some circumstances could mean that you get back less than you have paid in. If the Inherited ISA Allowance Plan is paid out on your death the reduction will not exceed 30%, i.e. the minimum guaranteed payment in the event of your death will be 70% of the accumulated fund.

Where is my money invested?

Any money you contribute into a Foresters Friendly Society Inherited ISA Allowance Plan is invested in the Order Insurance Fund. This is a with profits fund. By spreading the money paid into the fund across a number of different types of investments you benefit from the exposure to a range of asset classes. The Society’s Board of Directors reviews and approves the asset classes that the Society is permitted to hold in pursuit of its investment strategy, taking recommendations from the Investment Committee. A further advantage of this approach is that if the return of any one particular asset type is poor, your investment may be protected from the full impact of this fall as the other assets forming part of the overall investment may perform better. Thus the fall in value of one asset class (e.g. shares) may be cushioned by the potentially better performance in another asset class (e.g. property).

Please see the Principles and Practices of Financial Management (PPFM) for the latest information on our investment strategy.

How do I make withdrawals?

It is possible to make regular (frequent) and partial (one-off) withdrawals from your Inherited ISA Allowance Plan. Withdrawing money from your Inherited ISA Allowance Plan will reduce the value of your remaining investment, i.e. the accumulated fund. We may change the minimum withdrawal amount at any time. If this happens, we will give you reasonable notice. In adverse investment conditions we may apply a Market Value Reduction at withdrawal. At these times the accumulated fund will be reduced by more than the amounts withdrawn. Conversely, if there is an entitlement to a final bonus, the accumulated fund will be reduced by less than the amounts withdrawn. See the Market Value Reduction section above for details.

  • Regular Withdrawals

After two years, you can make regular withdrawals from your Inherited ISA Allowance Plan. The minimum regular withdrawal you can make is £50, so long as the accumulated fund after the withdrawal is at least £500. You can make regular withdrawals on a monthly, quarterly, half yearly or annual basis. If you decide to change the withdrawal amount or stop the withdrawal, you must contact our Claims team to provide one month’s notice.

  • Partial Withdrawals

You can make partial withdrawals from your Inherited ISA Allowance Plan at any time. The minimum withdrawal that can be made is £250 and accumulated fund after the withdrawal must not fall below £500.

To make a withdrawal please contact our Claims team on 0800 101 8312. 

How are bonuses decided?

Depending on how the underlying assets in the fund perform, and the costs incurred, at the end of each year we aim to declare an annual bonus to add to your accumulated fund. In addition, when you decide to cash-in your Foresters Friendly Society Inherited ISA Allowance Plan we may add a final bonus depending on the overall investment growth that has been 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 Inherited ISA Allowance 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 Inherited ISA Allowance Plan might not receive any annual and/or final bonus. In some investment conditions, if a market Value Reduction (MVR) is applied, you may get back less than you have paid in. 

What happens if I die?

The death benefit provided by your Inherited ISA will be paid to your estate estate and will depend upon the amounts invested, the amounts you have withdrawn and any annual bonuses that have been added, i.e. the accumulated fund. Depending on the investment returns that have been achieved and our costs, in favourable investment conditions we may add a final bonus to the accumulated fund. Conversely, in adverse investment conditions we may apply a Market Value Reduction (MVR) which will reduce the accumulated fund. However, the guaranteed minimum amount payable on death will be 70% of the accumulated fund.

In adverse investment conditions this means that the amount payable could be 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.

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.

Find out more about friendly societies and Foresters Friendly Society here.

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 2018).

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.

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.

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.

Inherited ISA Allowance Plan - Foresters Extras >>