A Guide to the Prudential Individual Savings Account (ISA) Your questions answered

Transcription

1 A Guide to the Prudential Individual Savings Account (ISA) Your questions answered Prudential ISA

2 The Prudential ISA combines tax-efficient investment with access to the PruFund funds and Open-Ended Investment Companies (OEIC) Funds. About the Prudential ISA The Prudential ISA is provided by Link Financial Investments Limited, who is the ISA Plan Manager. Link Financial Investments Limited is responsible for all regulatory and legal aspects of the ISA and the provision of all customer services. The Prudential ISA is a Stocks and Shares ISA and has two elements: > investment in a life insurance policy which allows access to the PruFund Funds (the Life Insurance Policy) for which Prudential is responsible, and > investment in Open-Ended Investment Companies (OEIC) through a range of OEIC funds for which Link and its associated group company Link Fund Solutions Limited are responsible. You can choose to invest in one or both elements of the Prudential ISA. A life insurance policy is an insurance contract. If you die, the life insurance policy will pay out 100.1% of the value of your investment. Please speak to your adviser as a first point of contact. They may be able to answer or resolve any queries for you. Alternatively contact Link if you require information about the Prudential ISA. Their details are shown in the 'How to contact Link' section on page 7. What does the Prudential ISA offer? The Prudential ISA is designed for the medium to long term (ideally five to ten years or more) investment, offering: > Tax efficiency any growth will be free of Income Tax and Capital Gains Tax and there is no tax to pay on withdrawals > The PruFund range of funds which invest in Prudential's With-Profits Fund aim to grow your money over the medium to long term, while helping to protect you from some of the extreme short-term ups and downs of direct stockmarket investments by using a unique smoothing process > A range of OEIC funds designed to meet different investment objectives and attitudes to risk > Access to your money with regular and one-off withdrawals to meet your needs > Invest from as little as 50 each month the minimum single investment is 500, the minimum monthly payment is 50, (within ISA subscription limits) > Freedom to transfer you can transfer your existing Cash ISA or Stocks and Shares ISA to the Prudential ISA. Please be aware of the risks Please remember that the value of an investment is not guaranteed and can go down as well as up and the value in the future may be less than you have invested. Please note there is a 28 day delay if you switch out of PruFund Funds. This delay may also apply when you withdraw money from a PruFund Fund. In certain circumstances, for instance if we experience large investment into, or encashment from the funds within the PruFund range of funds, we may not apply the smoothing process. The unit price will then increase or decrease daily in line with the value of the underlying investments, this is known as suspension of smoothing. Please see the brochure Your With- Profits Plan a guide to how we manage the fund (PruFund range of funds)' reference WPGB0031 for more information. 02 A Guide to the Prudential Individual Savings Account (ISA)

3 A Stocks and Shares ISA is a way of sheltering your investment from tax. It is a tax-efficient investment in which you hold a range of investments, including funds which can invest in equities (shares), property, bonds and even cash. These are known as multi-asset funds. There are two main types of ISA: > Cash ISAs like a savings account from a bank or building society. This can be suitable for savings over any period and normally money can be taken out easily. Prudential do not offer a Cash ISA. > Stocks and Shares ISAs are the opportunity to invest in a range of investments including unit trusts, open-ended investment companies (OEICS) and investment trusts, as well as government bonds and corporate bonds. ISA products are tax efficient as you pay no Income Tax or Capital Gains Tax on any growth within the ISA. A Cash ISA is available for individuals over the age of 16. A stocks and shares ISA is available to individuals above the age of 18. In both cases, the individual must live in the UK. For up to date information on ISA allowances please speak to your financial adviser. Can I transfer my existing ISA investments to the Prudential ISA? You can transfer any previous tax years Cash ISAs or Stocks and Shares ISAs from other providers to the Prudential ISA and invest the transfer amount into the range of funds available. Your Financial Adviser will help you complete the transfer forms. You could transfer your existing ISA to the Prudential ISA without affecting the current year s subscription limits ( 20,000 for the tax year 2017/2018). Please speak to your existing ISA provider about potential charges or penalties if you are considering a transfer. You may lose out on any growth in value during the period when the transfer is taking place, as your investment will be out of the market. Transferring from a Cash ISA to a Stocks and Shares ISA means moving from a deposit based account to a product where your capital is at risk and means you could get back less than you pay in. How much can I invest in the Prudential ISA? You can invest up to 20,000 in the tax year 2017/2018. The tax year runs from 6 April to 5 April the following year. You can put money in and take it out and you don t even have to declare an ISA on your tax return. However, you can only pay up to the maximum subscription allowance in any one tax year. You can only subscribe to one Stocks and Shares ISA in each tax year. This information is based on our understanding, as at March 2017, of current taxation, legislation and HM Revenue & Customs practice, all of which is subject to change without notice. The impact of taxation (and any tax reliefs) depends on individual circumstances. A Guide to the Prudential Individual Savings Account (ISA) 03

4 Which funds can I invest in? A selection of funds is available within the Prudential ISA: > PruFund range of funds > LF Prudential Investment Funds What is diversification? For some investors, the volatility which can result from investing in a single asset type (such as shares) is unwanted. At the same time, investors are looking to achieve returns that offer the potential to outstrip inflation. Therefore, many choose to spread their money over a variety of asset types. This is called diversification. By diversifying your investments, you can potentially gain some exposure to higher-performing asset types without the risks of putting all your eggs in one basket. The value of investments can go down as well as up and so there is always a risk that you may not get back the amount you put in. Prudential s PruFund fund range PruFund funds combine diversification, by investing in a wide range of different assets, with a unique smoothing mechanism, which aims to smooth some of the short term extremes of market volatility. We publish full details of the current asset mix for all PruFund funds on The following PruFund range of funds are available and provided by Prudential: > PruFund 0-30 Fund > PruFund Fund > PruFund Fund > PruFund Fund > PruFund Cautious Fund > PruFund Growth Fund. For more information on the PruFund range of funds objectives and charges please refer to the Fund Guide Prudential ISA PruFund Funds, available from your Adviser. 04 A Guide to the Prudential Individual Savings Account (ISA)

5 There is no Capital Gains Tax to pay on any gains made by your ISA investments increasing in value. OEIC Funds A range of Open Ended Investment Company (OEIC) funds is also available as a fund choice within the Prudential ISA. The OEIC funds are operated by Link Fund Solutions Limited who is legally responsible for the funds, including all servicing and administration of the funds. The 10 OEIC funds are multi-asset funds which have full exposure to the ups and downs of the market, but the individual funds are managed to take different levels of risk. The following OEIC funds are available within the Prudential ISA: > LF Prudential Dynamic 0-30 Portfolio > LF Prudential Dynamic Portfolio > LF Prudential Dynamic Portfolio > LF Prudential Dynamic Portfolio > LF Prudential Dynamic Portfolio > LF Prudential Dynamic Focused 0-30 Portfolio > LF Prudential Dynamic Focused Portfolio > LF Prudential Dynamic Focused Portfolio > LF Prudential Dynamic Focused Portfolio > LF Prudential Dynamic Focused Portfolio For more details on the OEIC fund objectives and charges, please refer to the Key Investor Information Document for each fund available from your Adviser and on the Link Financial website A Guide to the Prudential Individual Savings Account (ISA) 05

6 Important information about your Prudential ISA Accessing your money Adding to your investment Should you want to take money out of your Prudential ISA, either on a regular basis or as a one-off lump sum, it is easy to arrange. You can take lump sums and regular withdrawals from your ISA, provided that the ISA value after the withdrawal meets our minimum value limit of 500 for each fund. For further details, refer to the Key Features document, available from your Adviser. You can add to your investment at any time, from a minimum lump sum of 250. Regular savings can be increased by any amount subject to a minimum of an additional 5 each month. Any lump sum additions or regular saving increases are subject to ISA annual subscription limits. Taking out lump sums Can I switch between Funds? You can cash in part of your Prudential ISA at any time, subject to a minimum withdrawal of 250. You can switch between Funds at any time. Switches out of any PruFund Fund will be subject to a 28 day delay. Taking regular withdrawals Paying your Adviser through your Prudential ISA You can choose to have regular payments from your ISA every month, three months, six months or every year. The minimum regular withdrawal is 50 on each occasion for each fund that you are invested in. The maximum annual limit for regular withdrawals is 7.5% of the value of the ISA. You and your Financial Adviser will agree the charge for giving you financial advice. Some or all of these charges can be paid on your behalf from the payment you send us and/or from your investment. 06 A Guide to the Prudential Individual Savings Account (ISA) Further information can be found in the Prudential ISA Terms and Conditions document, available from your adviser.

7 More information This guide is for information only. If you are considering an investment in the Prudential ISA you should seek advice from your Financial Adviser and read the following important documents to help you make an informed decision: > Prudential ISA Terms and Conditions > Key Features of the Life Insurance Policy within the Prudential Individual Savings Account (ISA) > Fund Guide Prudential ISA PruFund Funds > Example Illustrations for Investment in the Prudential ISA and LF Prudential OEIC Funds > Master Insurance Agreement Customer Version > Your With-Profits Plan a guide to how we manage the fund (PruFund range of funds) > Key Investor Information Document(s) These are available from your Adviser. How to contact Link Write to Link at: Link Financial Investments Limited PO Box 384 Darlington DL1 9RZ Phone Link on: , 8:30am to 5:30pm Monday to Friday (excluding Bank Holidays) the Link Customer Services team at: investorservices@linkgroup.co.uk A Guide to the Prudential Individual Savings Account (ISA) 07

8 Prudential is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is used by other companies within the Prudential group. Registered office at Laurence Pountney Hill, London EC4R 0HH. Registered number Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. ISAB /2017