What does the Friendly Bonus ISA offer?

An Individual Savings Account (ISA) is a way of sheltering your money from the taxman, as you can keep all the proceeds from your investment tax-free - there is no Income or Capital Gains Tax to pay under current legislation. However, the fund in which you invest receives UK dividend income net of Corporation Tax.

The Friendly Bonus ISA is an insurance investment as part of the stocks and shares ISA. It invests in Scottish Friendly's with-profits fund that can help you build substantial savings for your future. It offers you a degree of security, growth potential, flexibility and freedom from tax. It grows through the addition of potential bonuses. Tax-free means free from Income and Capital Gains Tax. We can no longer reclaim the tax credit pre-paid on dividend income from UK equities.

Your Friendly Bonus ISA is designed to be a medium to long term (5-10 years) investment plan with the aim of providing a consistently better performance than a typical bank or building society. Remember that capital values are not guaranteed with this plan although they are in building society accounts where they benefit from ease of access.

How much can I invest?

You're in total control of your savings. Invest from £15 per month and/or a lump sum of £500 upwards. You can pay more money in (subject to the limits) or take it out, and stop and restart your payments at any time as long as you don't go beyond the maximum annual tax-free allowance of £7,200 of which up to £3,600 can be allocated to a Cash Account with another ISA Manager. It's all up to you!

There is an initial charge of 4%. Details of other charges are detailed in the Key Features.

Where is my money invested?

Your money is invested in the Scottish Friendly ISA With-Profits Fund which invests in stocks and shares, fixed interest funds and cash for long-term growth as well as a degree of security.

As with-profits plan, your money grows by the addition of bonuses. What's more, these are tax-free. These bonuses are your share of the society's profits. The level of bonus is determined by the Society's investment performance and how we decide to distribute profits. These bonuses are not guaranteed, however once a bonus is added it cannot be taken away. So your profits are safe. The current bonus rate is 3.5% p.a.¹

When you finally cash in your Friendly Bonus ISA, you could well be in for a pleasant surprise with a final bonus. Add this to all the other bonuses you have accrued over the years and your tax-free Friendly Bonus ISA could be a highly profitable investment. This final bonus isn't guaranteed but the longer you keep your Friendly Bonus ISA, the more likely you are to get one.

You can cash in your ISA at any time, although in some circumstances we may have to apply a Market Value Reduction (MVR), which could result in reducing the amount we pay you. We guarantee there will be no Market Value Reduction (MVR) if you cash in on the 10th anniversary of your original investment.

Consistently strong past performance

In the past decade our Friendly Bonus ISA has helped customers make good money on their investment through smooth and expert investment management. For example, someone who invested £1,000 in May 1999 would have seen their investment grow to £1,744 just over eight years later. That's a growth rate of 6.7% per annum.²

Past performance is not a guide to future performance. The value of with profits bonuses is not guaranteed. A Market Value Reduction (MVR) may apply in certain circumstances to cash-ins. No MVR will apply if you cash in on the 10th anniversary of your original investment.

Apply now

Applying is easy. Simply click on the Apply Now link to download an application form and read the Key Features. Then complete it and post it to:

Scottish Friendly Assurance, FREEPOST, Glasgow G2 4BR

Or, you can request an information pack to be sent to you in the post. This pack includes further Friendly Bonus ISA information and an application form. If you are in any doubt as to whether this product is suitable for you please contact your Financial Adviser.

If you apply for this product, for your records, we recommend you print or save a copy of this and any other relevant pages together with a copy of the Key Features.

1. On your investment, less initial charge. Future bonus rates are not guaranteed
2. Source: Scottish Friendly. Cash-in value on 1 January 2008 of £1,000 invested on 31 May 1999.