Savings & Investment Plan - Your questions answered
Am I eligible for the Savings & Investment
Plan?
How can contributions be paid?
How will I know how much my savings or
investments are worth?
What if I need to get to my savings or investment
or cancel my plan?
Will I be able to increase my
contributions?
Will I be able to reduce or
stop my savings?
Can I take regular withdrawals
from my Savings & Investment Plan?
What are the
charges?
What are stakeholder
schemes?
Will the benefits
of my Savings & Investment Plan be
taxed?
How do savings affect
eligibility for Social Security benefits?
Am I eligible for the Savings &
Investment Plan?
You are eligible if you are aged 16 or over. You can apply in your
own name or jointly with a partner.
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How can contributions be
paid?
Lump sum investments can be made by cheque or direct credit.
Regular savings are collected monthly by direct debit or standing
order.
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How will I know how much my savings or
investments are worth?
Every year we will send you a statement showing the value of your
plan.
You can view current unit prices on our
website or by calling our Unit Price Information Line free
on 0800 990011.
You should monitor the value of your plan and the level of
your contributions to ensure that it is sufficient to meet
your goals.
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What if I need to get to my savings or
investment or cancel my plan?
You should view your Plan as a medium to long-term investment
scheme. However, there is no set term so you can cash-in part or
all of your savings when you need to.
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Will I be able to increase my
contributions?
We will automatically increase the amount of your regular savings
each year to help you keep pace with inflation.
You can make additional increases to your Plan at any time subject
to a minimum of £5 for regular savings and £20 for lump sums.
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Will I be able to reduce or stop my
savings?
Yes, if you need to you can stop your regular savings at any time.
You can also reduce the amount you save.
Reductions are subject to a minimum of £5 and a minimum ongoing
saving of £20.
If you wish to cancel the automatic increases, you should tell us
at least 14 days before the increase is due.
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Can I take regular withdrawals from my
Savings & Investment Plan?
If you invest a lump sum in the Savings & Investment Plan we
can arrange for you to take regular part withdrawals. These can be
paid on a quarterly, half-yearly or yearly basis.
If you make withdrawals which exceed the growth of your investment
your capital will be eroded.
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What are the charges?
The Forester Life Savings & Investment Plan is
a medium term stakeholder investment scheme and as such meets
the stakeholder standard for ‘capped charges’.
There is an annual charge of 1.5% of the value of the funds you
accumulate. If your fund is valued at £250 throughout the year,
this means that we deduct £3.75 that year. If your fund is valued
at £500 throughout the year, this means that we deduct £7.50 that
year. After 10 years these deductions would reduce to £2.50 and
£5.00 respectively.
There are no other charges to you.
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What are stakeholder
schemes?
Stakeholder products have been introduced to provide a
straightforward and low-cost way of investing and saving. In
order to qualify as stakeholder, a medium term investment scheme
must satisfy Government standards including minimum payments from
£20, a range of payment methods, charges of no more than 1.5% pa of
fund value (reducing to 1% pa after 10 years) and a risk
controlled, shares based investment.
Schemes that meet stakeholder conditions are not necessarily
suitable investments for a customer, nor do they offer any
guarantee of performance.
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Will the benefits of my Savings &
Investment Plan be taxed?
Forester Life is liable for tax on the income and growth of
the Fund linked to the Savings & Investment Plan. This takes
care of tax liability for most basic rate taxpayers but if you are
a higher rate taxpayer when you surrender your Plan, you will be
liable to the difference between basic and higher rate tax on any
gain.
It is also possible to become a higher rate taxpayer by
surrendering your Plan, in which case you will be taxed on some of
the gain you have made.
A similar situation can apply if you take a withdrawal from
your Plan. However, you are allowed to withdraw 5% of your original
investment each year (up to 20 years) without any immediate
liability to tax. Any unused 5% allowances can be carried
forward indefinitely.
In order to minimise any personal tax liability your Plan
will be issued as 1000 identical Plans. Any withdrawals you make
will be completed by firstly utilising any unused 5% allowances
and, secondly, by fully encashing some of your 1000 Plans to meet
your requested amount. This keeps the taxable gain to a minimum and
reduces any tax liability that would otherwise apply.
Any profits from cashing in your Savings &
Investment Plan could affect your entitlement to Age Allowance if
you are aged 65 or over.
Tax treatment depends on the individual circumstances
of each investor and may be subject to change in the future.
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How do savings affect eligibility for
Social Security benefits?
You can have savings of up to £3000 without affecting your
entitlement to social security benefits.
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