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Our Young Saver Plan With-Profits Fund

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Our With-Profits Fund offers medium to low risk investing, looking to grow the child’s investment in a smooth manner over the long-term

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When you open a Young Saver Plan, we invest your money on your behalf within our With-Profits Fund, which invests in a variety of assets including stocks and shares, bonds, gilts, property and cash. This means that, unlike saving in a normal cash account offering a set interest rate, the child’s money is placed in a tax-efficient investment fund offering annual bonuses, the size of which will depend on the performance of the investments within the fund.

Investing for the child offers the potential for higher returns over the long-term on their money than would be available by saving in most cash savings accounts, however there are no guarantees with regards to the size of the bonus that will be paid each year.

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Shepherds Friendly With-Profits Fund

Investing in a Shepherds Friendly Young Saver Plan means the child's money is pooled along with that of other Shepherds Friendly plan holders into our With-Profits Fund. The aim for us is to invest your money in assets that provide an increase in value to the size of the fund, and to then pass the profit 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 Young Saver Plan

Below is a summary of how our Young Saver Plan has performed over the course of the last five years, in terms of the bonus that has been paid to our members:

Past performance of our Young Saver Plan graph

This chart shows bonuses paid to our members after all charges have been deducted, and is the actual return received. Please remember that past performance is not a guide to how your Young Saver Plan could perform in the future, and although we can never take bonuses away once they have been paid, we may not pay one in years when performance is particularly poor.

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The benefits of Smoothing

While the child’s money is invested in our Young Saver Plan, we apply a smoothing process which is intended to minimise the effects of any fluctuations in the stock market during that period. It does this by creating a reserve from the profits received in that year, but sometimes holding onto some of the profit in years when performance is particularly good. We do this so we can aim to use the money we have in reserve to pay you an annual bonus even in poor investment conditions, lessening the effects of stock market volatility.

If we hold back some of the profit in years when investment conditions are good, and investment conditions remain strong for the remainder of the child’s investment period, then we may add a final bonus that reflects this.

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Risks associated with the Young Saver Plan

Inevitably there are risks associated with any stocks and shares investment and in years where performance is particularly poor we may not pay a bonus.

However, once we have paid a bonus into the child’s plan we can never take it away, and unlike some other stocks and shares investments you cannot get back less than you have paid in. This, along with the smoothing process we apply, makes our Young Saver Plan a potentially less risky investment than some other children’s investment plans.

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Bonuses applicable to your Young Saver Plan

The returns achieved by our With-Profits Fund are used to pay a yearly bonus into the child’s plan, whenever possible. Once a yearly bonus has been added to the plan this cannot be taken away and will be included in the final payment either when your child reaches the age of 18, or after the plan has been running for 10 years, whichever is later.

At the end of your plan a further final bonus may be added, depending on the fund’s performance.

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How to open a Shepherds Friendly Young Saver Plan: You can open a plan online quickly and securely by clicking the button below:

Alternatively, 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 total amount of sickness benefit paid out, and the investment performance of Shepherds Friendly’s funds. Therefore the bonus will fluctuate over the term of the plan.
  • If money is taken out of the plan at age 11 the child is unlikely to get back as much as we originally told you they would because of this early withdrawal.
  • If the plan is stopped and money is taken out at any time before the end of the plan you may have to pay to do so. This cost could be more or less than the examples in this leaflet.

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.