What is a New Individual Savings Account (New ISA/NISA)?
From 1 July 2014 ISAs were reformed into a simpler product called, the New ISA or NISA for short. A NISA is a regular savings account best suited for medium to long-term savings. It's a great way to save in a tax-free manner, as you don't need to pay any Income or Capital Gains Tax on the return. There are different categories of NISA such as 'cash' and 'stocks & shares' and there are also certain restrictions on how much money you can invest during each tax year.
The overall NISA limit for 2018/2019 is £20,000 and you will be able to save your whole NISA allowance in cash, stocks & shares or any combination of the two. Foresters Friendly Society provides a Stocks & Shares NISA into which you can invest your whole NISA allowance during the 2018/2019 tax year.
Tax-free means free of tax in your hands. However, tax is automatically deducted from UK share dividends and that tax cannot be reclaimed. Please be aware that tax rules might change and depend on individual circumstances.
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What are the rules that apply?
(All tax years start on the 6th April and end on the 5th April the following year).
Within the tax-efficient NISA savings wrapper you can invest in one or more of the following two forms of savings:
- An investment in stocks & shares.
- A cash deposit account.
You can invest in one or both of the above savings schemes with any provider.
The Foresters Friendly Society NISA is categorised as a Stocks & Shares NISA. This means you cannot invest in the Foresters Friendly Society NISA if, in this tax year, you already have another Stocks & Shares NISA with another provider.
During the 2018/2019 tax year, you can invest up to £20,000 in a Stocks & Shares NISA.
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What happens if I cash-in my NISA?
You can cash-in your investment whenever you want, but you may get back less than you have paid in. The cash-in value will depend on the amount invested, the amounts that have been withdrawn, the sum assured, and any annual bonuses that have been added. Depending on the investment returns achieved and our costs, in favourable investment conditions we may also add a final bonus to the NISA’s value. However in adverse investment conditions we may apply a Market Value Reduction (MVR) which would reduce the Plan’s cash-in value to below the sum assured.
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How do I make withdrawals?
It is possible to make regular and one-off withdrawals from your NISA. Withdrawing money from your NISA will reduce the value of your remaining investment and reduce your sum assured. 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 (MVR) at withdrawal. See the section below for details.
After two years, you can make regular withdrawals from your NISA. The minimum regular withdrawal you can make is £50, so long as the value of the NISA 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 provide one month's notice by contacting our Claims team on 0800 101 8312.
You can make partial withdrawals from your NISA at any time. The minimum withdrawal that can be made is £250 and the remaining value of the NISA after the withdrawal must not fall below £500.
To make a withdrawal please contact our Claims team on 0800 101 8312 or by email at claims@forestersfriendlysociety.co.uk. If you withdraw money from your NISA, it cannot be replaced.
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What is a Market Value Reduction (MVR)?
This is a deduction we may apply to your sum assured when you make regular or partial withdrawals or fully cash-in your NISA. Its purpose is to be fair to both members leaving the Order Insurance 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 members. This adjustment will reduce the value of your NISA at that time and in some circumstances could mean that you get back less than you have paid in.
We have not applied an MVR to date on the Foresters Friendly Society Stocks & Shares NISA, however this could be applied in the future.
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Are there any charges?
There is an Annual Management Charge which is initially set at 2% of the value of your NISA, which will be deducted before we declare any bonuses meaning that there are no additional charges for you to pay. This charge could increase, however it will never exceed 3% of the value of your NISA in any one year. The charges are designed to cover our costs for administering the NISA on your behalf. For more information about charges, please see the Stocks & Shares NISA Key Information Document and Important Information.
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How can I close my NISA?
1. Within the 30 day cancellation period
If you wish to close your NISA within the 30 day cancellation period, please complete and return the cancellation form, sending it to Foresters Friendly Society, 29-33 Shirley Road, Southampton, SO15 3EW.
- If this was a non-advised sale a full refund will be paid
- If this was an advised sale where an adviser fee was paid from your investment, all the money invested into the NISA will be returned, excluding any fee which will have already been paid to your Financial Adviser.
2. After the 30 day cancellation period has passed
You can cash-in your NISA whenever you choose after the 30 day cancellation period has passed, however due to the nature of the investment you may get back less than you have paid in. For more information please see the section 'What happens if I cash-in my NISA?'
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How to check the progress of my NISA application?
If you have applied by post you should receive confirmation within 10 working days. If you haven't received confirmation after this time, or have any further questions relating to the policy application process then please call our Policy Admin team on 0800 101 8311 or contact us by email.
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