Scottish Bond

A tax-free investment in addition to your New ISA allowance

Start investing from just £15 a month

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 detail tab.

Your Scottish Bond What you need to consider
  • Invest from only £15 to £25 a month tax-free for 10 years.
  • Your plan payout will be related to the performance of the assets within the Scottish Friendly With-Profits Fund which includes the stockmarket, bonds, cash and property.
  • You get a guaranteed minimum cash sum after 10 years.
  • A small amount of life cover is automatically included.
  • You could get back less than you've paid in and if you cash in within the first 2 years, you will get nothing back
  • The amount of your guaranteed minimum cash sum depends on your age and how much you pay in. It will initially be less than your total investment over 10 years.
  • The cost of life cover is included as a small part of the plan’s charges. The cost of life cover is higher for older ages.
     

 

Tax Information

Tax Information
  • 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.

Find out more 


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 New ISA allowance

A 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 New ISAs.

With a 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.

Invest £15 to £25 a month tax-free over your ISA allowance.

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 the 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.

£2,670 projected value at 2% per year, £3,060 projected value at 5% per year, £3,510 projected value at 8% per year.

You can see in the illustration above that the lower projected growth rate of 2% a year provides a return which is less than the total paid in over a 10 year term. This is due to the effect of charges in the first two years.

Based on someone aged 30 next birthday investing £25 per month. *Total amount invested £3,000. Based on current tax law, which may change.

These figures are only examples and are not guaranteed. They are based on premiums being paid for the full 10 years. They are not minimum or maximum amounts. What you get back depends on how your investment grows and on the tax treatment of the investment. You could get back more or less than the figures projected above and the total amount invested. 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).

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. All the figures include the deduction of the actual charges assumed on the bond. These charges may vary in future.

Each year we will send you a statement showing your bond’s current value.


Get your Scottish Bond

Starting a Scottish Bond with Scottish Friendly is easy.

Make sure you have read and understood the Key Features and ‘How we invest your money’guide before you apply. Then you’re ready to apply online.

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.

Apply Online>