the tax break explained
Every child is entitled to a tax-exempt savings allowance that’s exclusively available through friendly societies. This tax break means that there is no tax to pay on any growth in the plan.
The savings build up to a tax free lump sum for your child. This can be in addition to a child trust fund and at the end, the tax man won’t be able to touch a penny. Just remember, the tax treatment of the plan could change in the future.
we guarantee to pay back at least the money that has been paid in
Not only does junior easy save offer investment growth potential (the money is invested in the Engage Mutual With Profits Sub Fund) but also the added reassurance of a guaranteed minimum cash sum at the end of the chosen term. Your child will get at least what has been paid in, even if the investment fund value has fallen – provided:
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all the premiums due have been paid
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the plan has reached the end of the premium payment term
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and it is cashed in within 28 days after the end of the payment term.
It’s also worth bearing in mind the following:
- if the plan is closed outside the guarantee period your child could get back less than you’ve paid in
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if it is cashed in before 1 year’s premiums have been paid your child will not get anything back
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if the plan is surrendered early, a Market Value Reduction (MVR) may be applied which would reduce the amount your child receives
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if, within 10 years, the policy is closed or premiums stop, income tax may be payable if the final value of the policy exceeds the premiums paid
how the premiums are invested
With a junior easy save plan, the money buys units in the Engage Mutual With Profits Sub Fund – this, in turn, invests in collective investment schemes, which are actively managed by external fund managers. These may hold a range of investments including shares, fixed interest securities, commodities, property, currency, cash and other structured investments. The Engage Mutual With Profits Sub Fund may also invest directly in fixed interest securities.
Every year we declare a bonus which is based on the performance of the fund so far and how we believe it will perform in the future. Of course, it is worth bearing in mind that future bonuses depend on investment performance and neither of these guaranteed.
smoothed returns
Investment returns achieved by the With Profits Sub Fund will vary over time and there will be periods when investments may do very well, but other periods when they may not perform as well. The Engage Mutual With Profits Sub Fund uses a process known as ‘smoothing’ to help smooth out some of these short term variations in performance.
sound interesting? You can apply now
£20 worth of Marks & Spencer vouchers when you start a plan, plus an extra £10 when you do this online. Click here to apply.
terms and conditions apply.
