Tax-exempt savings plan

Another way to build a tax-free lump sum for your family from just £15 a month

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A tax-exempt savings plan could pay off for the whole family

Tax-exempt savings plans offer you an extra opportunity to invest towards your family’s future. Easy on the pocket, they can help build towards providing a useful tax-free cash sum for 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) and tax treatment depends on your individual circumstances and tax law may change in the future.

If you’re looking for an extra way to build up a tax-free lump sum for your family’s future, a tax-exempt savings plan (TESP) could be an option.

Like a Stocks and Shares ISA or Stocks and Shares Junior ISA, a TESP puts your money to work on the stock market, with the aim of potential growth over the long term.

Thanks to the current tax-free allowances, you can have a TESP as well as an ISA or Junior ISA — giving you even more opportunity to provide a financial future for your loved ones.

Scottish Friendly has its own range of TESPs called the Scottish Bond and Child Bond.

These plans are different from ISAs in a number of ways, one of which is each one includes a small amount of life insurance cover for the plan holder. This is a condition of the tax benefits and the exact level of cover and any deductions you’ll pay towards the cost of the cover depend on your age and the monthly payments you make in to the investment plan. You should consider if this is appropriate for your financial needs. As with all stock market investments, the value of your money can fall as well as rise and you could get back less than you have paid in.

Tax Free Allowance 2018

Your tax free allowance

Reached your ISA allowance for 2017/2018? No problem. The Government lets you put additional cash into a tax-exempt savings plan (TESP), so you can still beat the taxman and invest even more for your family’s future.

Find out about your tax free allowance options

Things to remember

Bear in mind, like any stock market investment, the value of your chosen plan can go down as well as up, so unless your plan offers a guaranteed lump sum, you could get back less than you’ve paid in. These plans should be seen as long-term investments. And tax charges and other fees may apply if some plans are cashed in before 10 years.

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a 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 Advisers may charge for providing such advice and should confirm any cost beforehand.