When you choose to invest with us in our Stocks and Shares ISA your money is placed in a tax-efficient account that will not attract income tax or capital gains tax throughout your investment term. Any money you withdraw from your investment will also be tax-free.

Your money is invested on your behalf by our fund manager in an investment fund that is made up of a broad variety of assets that includes stocks and shares, unit trusts, bonds, property and cash. The majority of the investment will generally be placed in stocks and shares, and this is with the aim of providing a higher return on your investment over the long-term than would be available in a cash-based account.

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Shepherds Friendly With-Profits Fund

The fund that we invest your money in is known as our With-Profits Fund. This is a single fund that is invested across a broad range of assets with the aim of increasing the value of your investment through the payments of annual bonuses.

The value of the annual bonus will depend on the performance of the fund throughout the period your money has been invested for. Because investment values can fluctuate 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 Stocks and Shares ISA

Below is a summary of how our Stocks and Shares ISA 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 ISA 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 ISA 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

We apply smoothing to your investment to try to minimise the effects of stock market fluctuations and to try to ensure that we can pay you an annual bonus. In doing this the annual bonus may not always directly reflect the fund’s performance within that year. For example, when investment conditions are good, we may decide to hold onto some of the profit achieved in that period in order to compensate for any period when conditions are less favourable. This may mean that in poor investment conditions we are still able to pay a bonus from the reserves we have acquired.

If we hold back some of the profit in favourable investment conditions, and conditions remain good for the rest of the term of your investment, then we may also apply a final bonus when your ISA matures that reflects this.

Unlike some more volatile stocks and shares ISA investments, the value of our ISA will not fluctuate daily and we will never take away a bonus once it has been paid to you.

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Risks associated with the Stocks and Shares ISA

As our Stocks and Shares ISA is invested primarily in stocks and shares there are inevitably risks associated with it. Unlike a cash-based account which will usually give you a set and guaranteed rate of interest on your savings, when investment conditions are poor we may not a pay a bonus into your Stocks and Shares ISA.

Because of this you should view any investment where performance is based on stock market conditions as medium to long-term, and this includes our Stocks and Shares ISA.

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Bonuses applicable to your Stocks and Shares ISA

The returns achieved by our With-Profits Fund are used to pay a yearly bonus into your plan, whenever possible. You will be notified of your bonus in your annual Bonus Statement, the value of which will depend on the performance of our With-Profits Fund.

Once a bonus has been added to your investment we will never take it away, and every following year the performance of the fund will determine the value of your bonus.

You may also get a final bonus when your Stocks and Shares ISA matures depending on the performance of the fund throughout your investment term.

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How to open our Stocks and Shares ISA: 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

  • Bonus rates vary from year to year depending on the performance of our investments and in some years we may not pay out any at all.
  • HM Revenue and Customs may change the tax status of an ISA in the future.
  • Inflation and making regular withdrawals may affect the purchasing value of your investment in the future.
  • In poor investment conditions we may apply a Market Value Reduction (MVR) (please see the ISA Key Features document).

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.