The Scottish Bond is a with-profits plan that allows you to invest up to £25 per month tax-free with a friendly society like Scottish Friendly over a period of 10 years.
The table below provides all the plan detail and things you should consider. For more information on Scottish Bond please visit the in detail tab.
|Your Scottish Bond||What you need to consider|
- Tax treatment depends on your individual circumstances and tax law may change in the future.
- Tax-free means the fund your plan invests in grows free of income and capital gains tax (other than tax on dividends from UK shares).
- You can only invest a total of £3,600 each year in a qualifying endowment life policy including up to £25 a month in a tax exempt savings plan.
- To apply, you need to be a UK resident aged between 16 and 55.
No advice has been provided by Scottish Friendly in relation to this plan. If you are in any doubt as to whether this plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.
A tax-free investment in addition to your ISA allowance
Scottish Bond is a 10 year with-profits plan for UK residents, aged between 16 and 55. If you’re in that group, under current law you’re allowed to invest up to £25 per month tax-free with a friendly society such as Scottish Friendly. This is a limit set by the Government and it is over and above tax allowances such as ISAs.
With Scottish Bond you don’t pay tax on the growth of your money (other than tax on dividends from UK shares). And there’s no tax to pay when your Scottish Bond ends after 10 years. Please note that tax treatment depends on your individual circumstances and tax law may change in future.
Start a regular investment habit
You can put away £15, £20 or £25 per month or £180, £225 or £270 per year in your Scottish Bond.
Putting money aside could quickly become a habit. When you set up paying into your Scottish Bond by Direct Debit you may hardly notice the payment.
Please remember, if you stop your Scottish Bond within the first 23 months, you get nothing back. After the first 2 years, the payout may be lower than what you’ve paid in.
Long term growth potential
Your Scottish Bond money is invested in the Scottish Friendly With-Profits Fund. It’s carefully managed across a range of assets, aiming for long-term growth and a degree of security in the form of a guaranteed minimum cash sum after 10 years. Please go to 'How we invest your money' to see how we look after your investment.
What’s special about Scottish Bond is the guaranteed minimum cash sum you receive after 10 years. You have the reassurance of knowing that you will get a guaranteed minimum cash sum, which protects part of the total amount invested.
The guaranteed minimum cash sum will depend on your age and how much you pay each month. At first, the guaranteed minimum cash sum will be less than the money you’ve paid in. But it’s designed to increase through the addition of bonuses.
Long-term growth potential comes from the addition of regular bonuses and a potential final bonus. Their value is based on the profit we make, our investment returns and the way in which we distribute these to our customers. The bonuses are not guaranteed.
As a condition of the tax benefits, you also get life insurance. This ensures that on death your estate will receive at least your guaranteed minimum cash sum plus any locked in bonuses. The level of cover depends on your age, health and payments into your Scottish Bond. You should consider if this is appropriate for your financial needs.
What might I get back from my bond?
Projected returns on £25 per month invested over 10 years*
Projected returns for illustration only. Remember your original investment is not guaranteed and you could get back less than the amounts shown.
Based on someone aged 30 at outset investing £25 per month. *Total amount invested £3,000. The annual rates of growth for the illustration have been based on our reasonable estimate of potential returns and are subject to the maximum projection rates permissible by the Financial Conduct Authority from 1 April 2014. All the figures include the deduction of the actual charges assumed on the bond. These figures are only examples and the projected benefits are not guaranteed. They are based on premiums being paid for the full 10 years. They are not maximum or minimum amounts; what you get back depends on how your investments grow and the actual levels of future bonuses. You could get back more or less than this. Do not forget that inflation would reduce what you could buy in the future with the amounts shown. (For more details on the effect of charges on your bond, please see the Key Features).
Every year you will receive a statement that will provide you with details of any bonuses that have been added to your bond.
Get your Scottish Bond
Starting a Scottish Bond with Scottish Friendly is easy.
If you apply, we suggest printing or saving a copy of this page, other relevant web pages, the Key Features and 'How We Invest Your Money' guide.