Our University Savings Plan With-Profits Fund
Est 1826
Our With-Profits Fund offers medium to low risk investing, aiming to grow the University Savings Plan in a smooth manner over the long-term
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In association with
Saving for their university education, with Shepherds Friendly
The University Savings Plan is closed to new applications. We do have a range of children’s savings plans available to parents and extended family which you can view online. Our Junior Money Maker offers all of the same great benefits as the University Savings Plan, including more control over when your child has access to their money, benefits for you if your child is off school for more than four weeks due to sickness, and our commitment to maintaining all premiums into the plan if the premium payer dies during its term and is aged under 50 at the start of the plan.
If you have a University Savings Plan and would like more information about the plan, then you can either view our FAQ’s or you can contact our customer services team on 0161 428 1212 or by email at [email protected].
Shepherds Friendly With-Profits Fund
The With-Profits Fund pools your money with the investments of our other members. We aim to invest the child’s money in assets that provide an increase in value to the amount invested over the long-term, and to then pass the profits on to our members in the shape of annual bonuses.
Because investment values can rise and fall year by year, we look to ensure that these fluctuations are evened out wherever possible by applying a process known as ‘smoothing’.
Past performance of our University Savings Plan
Our University Savings Plan was launched in 2013, and below is a summary of how bonuses have performed since then:
The above bonus rate is the actual bonus received by your child’s University Savings Plan, after the annual management charge has been deducted.
Please remember that past performance is not a guide to how your child’s University Savings Plan will perform in the future, and although the value of your child’s University Savings Plan cannot fall, in years when performance is particularly poor we may not pay a bonus.
The benefits of Smoothing
While the child’s money is invested in our University Savings Plan, we apply a smoothing process which is intended to minimise the effects of any fluctuations in the stock market during that period. This is done by creating a fund reserve from the profits received in that year, but occasionally holding on to a portion of the profit in years when the fund performance is particularly strong. The reason for doing this is so that we can aim to use the reserve to pay our members an annual bonus even when investment conditions are not as favourable, reducing the effects of stock market volatility.
In the event that we hold on to some of the profit in years when investment conditions are strong, and they remain so for the remainder of the child’s investment period, then a final bonus may be added to the child’s fund to reflect this.
Risks associated with the University Savings Plan
Because our University Savings Plan is a stocks and shares investment there are inevitably risks associated with it, and when investment conditions are particularly poor we may not pay a bonus.
However, unlike some other stocks and shares investments in which the value of the fund can fluctuate daily, once we have paid a bonus into the child’s University Savings Plan we will never take it away. This, along with the smoothing process applied to the University Savings Plan, makes it a potentially less risky investment than some other children’s investment plans.
Bonuses applicable to your University Savings Plan
When possible we will use the returns achieved by our With-Profits Fund to pay an annual bonus into the child’s plan. Once an annual bonus has been added to the plan, it will be included in the final payments when the child withdraws the money.
When the plan ends there may also be a final bonus that is added, depending on how the fund has performed throughout the investment term.
If you would like assistance in applying or would like more information regarding the plan, you can speak to a member of our customer services team by calling 0800 526 249
IMPORTANT THINGS TO CONSIDER
- How the investment performs may vary during the term of the Plan. Because of this the child could receive a higher or lower sum than you expect at the end of the plan and may not get back as much as you have paid in.
- The amount of bonus paid each year is related to the investment performance of Shepherds Friendly’s funds and the total amount of sickness benefit paid out to all customers who have this type of Plan. Therefore the bonus may fluctuate from year to year throughout the term of the Plan.
- In poor investment conditions we may apply a Market Value Reduction (MVR). This could mean you get back less than you have paid in.
- If the Plan is stopped and money is taken out at any time before the end of the Plan you will have to pay a surrender penalty.
- The tax treatment of these Plans could change in the future.
All references to taxation are to UK taxation and are based on Shepherds Friendly Society's understanding of current legislation and H M Revenue and Customs practice which may change in the future. For our With Profits plans investment growth is by means of bonuses, the amount of which cannot be guaranteed throughout the term of the contract. Please ensure that you read the full terms and conditions of this plan which are available from your financial adviser or by contacting us directly.