With Profits Life ISA (top-ups)

Transcription

1 With Profits Life ISA (top-ups) Key features of the With Profits Life ISA The Financial Conduct Authority is a financial services regulator. It requires us, LV=, to give you this important information to help you to decide whether our With Profits Life ISA is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference.

2 Key Features of the With Profits Life ISA Along with this Key Features document you ll also receive the Terms and Conditions and a booklet called Your guide to how we manage our with-profits fund. They contain useful information to help you understand how we manage your ISA and the investments in our with-profits fund. We strongly recommend you take a few minutes to read them. Its Aims A way to invest monthly, yearly or single premiums for potential growth. The investment potential of the stock market but with the smoothing effect of with-profits. Flexibility, in case your circumstances change in the future, with the ability to top-up your existing plan (subject to maximum limits). Your Commitment For a regular savings ISA, to invest a minimum of 30 a month, or 750 per tax year. For a single premium top-up, to invest a minimum of 100. Not to invest more than 20,000 in total in the tax year 2017/18. To invest for at least 5 years, and ideally for 10 years or more with the freedom to take money out at any time. Risks Your circumstances may change, forcing you to stop making regular payments and/or cash in early. The With Profits Life ISA is a stock market related investment so you are not certain to make a profit. Your returns cannot be guaranteed and will depend on future fund performance when you cash in you may not get back the amount you put in. The investment growth may be lower and our charges higher than shown in this document. If actual investment returns are less than the bonuses we have already added to the policy, and you cash in or withdraw money, a Market Value Reduction may apply please see What is a Market Value Reduction? on page 3. The tax treatment of ISAs could change in the future. If the Government changes the tax treatment of ISAs this may reduce the potential growth of the investment. Questions & Answers We have given you the answers to some very important questions about the ISA. These are set out below and will help you decide whether to invest. What is an ISA? An ISA is effectively a tax efficient umbrella which means that the money you invest enjoys special tax treatment: Money paid to you All the money you receive from your ISA will be paid completely tax free. Money in the with-profits fund Capital gains made and income received by the with-profits fund are tax free. The value to you of the tax benefits of ISAs will depend on your personal circumstances. As the money you receive from an ISA is tax free it does not need to be entered on your tax return. You can invest into cash, or stocks and shares, or split your investment between the two, as you wish. You can also transfer existing ISA savings between cash and stocks and shares. What is the LV= With Profits Life ISA? It is a tax efficient way for you to invest single payments and/or regular amounts (monthly or yearly) into stocks, shares and other investments through our with-profits fund. The design we have chosen for our With Profits Life ISA means that it does not meet the Stakeholder criteria laid down by the Government. Can I invest? Yes, if you re a UK resident and you want to pay more money into your existing With Profits Life ISA. Please check the eligibility guidance on the application form. Can I invest with someone else? No, joint ISA investments are not allowed. 1

3 How much can I invest? The allowance for this type of ISA is 20,000 in the 2017/18 tax year. The standard contribution limits are: Monthly amounts: From a minimum of 30 to a maximum of 1, for 2017/18, or Yearly amounts: From a minimum of 750 to a maximum of 20,000 for 2017/18. Single premium top-ups to existing plans: From 100 (subject to overall tax year ISA allowance). How do I set up my regular investments? We automatically collect your investments from your bank or building society account each month or year, by Direct Debit. Can I increase or decrease my regular investments? Yes. For monthly premiums, the minimum increase is 10 subject to the overall tax year ISA allowance. For yearly premiums the minimum increase is 120 subject to the overall tax year ISA allowance. You can also choose to top-up your investment with a lump sum (minimum 100) at any time subject to the overall tax year ISA allowance. Regular premiums may be reduced down to the minimum premium in force at the time of the reduction. Where is my money invested? Your money is allocated to units in our with-profits fund, which invests in a wide range of carefully chosen investments that are managed on behalf of our members. The aim is to achieve competitive growth over the medium to longer term, by investing in: mainly the shares of UK and overseas companies fixed interest securities including Government stocks and bonds property a small selection of other securities some cash The proportion of these may vary, reflecting changes in market conditions, and the view of future prospects. Our with-profits fund is a stock market related investment and so you are not certain to make a profit, and you may get back less than you invest. How will my ISA benefit from the with-profits fund? We share the returns from the with-profits fund in the form of bonuses: Regular Bonus To add a regular bonus, we increase the unit price. The price is worked out at least once each month. When setting regular bonus rates we take into account expected future investment returns, the relationship between the value of your units and the value of the investments underlying them, the current and projected financial strength of the fund and past policyholder communications. We review the size of the regular bonuses we add at least once a year. How your number of units may change: Units will be cancelled from your ISA to pay our charges, or when you take money out. Units will be added to your ISA in line with the money you pay in. Once the regular bonus has increased the price of units, there are only two ways the units allocated to your plan can fall below the value given by this price: If you take money out of your ISA when a market value reduction applies, - please see Market Value Reduction information on page 3. If the charges on your ISA are more than the value of the bonuses being added. Unit price of the Fund We calculate the unit price of our with-profits fund at least once a month and usually weekly. The latest unit price can be found on our website wpprices. Smoothing To keep your investments more stable over time, we hold back some returns in good years to offset returns when investment performance isn t so good. This smoothing cushions the investment performance against the daily fluctuations, both up and down, of the stock market. If you have investments that don t smooth returns, you could see their value rise or fall faster than ones in a smoothed fund. Final Bonus We may also add a final bonus when you close your ISA, or if you take money out of it. This will either increase the amount we pay out or reduce the number of units we cancel. We would increase the amount we pay out when you close your ISA or if you die. We cash in fewer of your units when you only take out some of your money. We add a final bonus to make sure you get your fair share of our investment returns. It is added when your fair share of the investment returns are higher than the regular bonuses we added previously, so the amount of any final bonus added will vary from time to time. You can find out more about bonuses and smoothing in Your guide to how we manage our with-profits fund. With Profits Life ISA Key Features 2

4 What is a Market Value Reduction? A Market Value Reduction reduces the value of your units which has the effect of either reducing the amount we pay out or increasing the number of units we cancel. Its purpose is to ensure you receive your fair share of our investment returns. For example, we could apply a Market Value Reduction: if our regular bonus rates have been higher than actual investment returns applied to your ISA, and the impact from withdrawals from the with-profits fund could unfairly reduce its value for those who remain. If a Market Value Reduction is applied this may reduce the value to less than the amount paid in. When could a Market Value Reduction be applied? We reserve the right to apply a Market Value Reduction on surrender or on any withdrawal, except for ISAs started before 1 February 2002 where withdrawals up to 7.5% of the value of units can be taken every 12 month period ending on the policy anniversary date, without a Market Value Reduction being applied. When do we guarantee not to apply a Market Value Reduction? We will not apply a Market Value Reduction on a death claim. For ISAs started before 1 February 2002, we will also not apply a Market Value Reduction on withdrawals of up to 7.5% of the value of units each 12 month period ending on the policy anniversary date. Can I take money out? Yes, you can cash it in or withdraw 250 or more at any time. And once the value of your ISA reaches 5,000 or more, you can arrange to take regular yearly or 6 monthly withdrawals of 50 or more, if you wish. The amount of money available for you to withdraw from your ISA will be the value of the units allocated to it at the time. If, at any time, there are no units left in your ISA, we will close it. If you are thinking about taking withdrawals from your ISA, it is important to understand that if the amount of withdrawal is higher than the growth on your investment, this will eat into the amount you invested. If I cash in early on, will I get all my money back? If investment growth is less than the amount deducted from your ISA in charges, you will get back less than you paid in. If, on the other hand, investment growth is higher than the charges, you will get back more than you paid in. For examples of what you might get back please see your Personal Illustration. Can I stop and start investments into my ISA? Yes. You can stop or re-start your investments at any time without penalty. If you stop payments: Your ISA will still benefit from the growth of the with-profits fund. We will continue to deduct the monthly policy fee if appropriate please see What are the charges? on page 4. You can cash in or withdraw money at any time please see Can I take money out? on page 3. If you want to re-start payments call us on For textphone dial first. We may record and/or monitor calls for training and audit purposes. If you ve not invested into your ISA during the 2016/17 or 2017/18 tax years you ll need to complete a new application form before payments can be re-started. Can I transfer money out of this ISA into one with another ISA Manager? Yes, you can transfer to to another stocks and shares ISA or a cash ISA, provided that the new ISA manager accepts transfers. We do not make any charge for transfers but a Market Value Reduction may apply. Can I change my mind? Yes, you can cancel your additional contributions to your ISA within 30 days of getting your documents. If you want to do this, just let us know by: Calling us on (for textphone first dial 18001) Writing to us at: LV= ISA Team, County Gates, Bournemouth BH1 2NF ing us at LV.ISAAdminTeam@LV.com This applies when you: Start regular investments, or Increase your regular investments, or Make lump sum investments. If you let us know you wish to cancel within 30 days of receiving your documents, we ll refund your additional contribution. You can still cancel your ISA at any time after these 30 days, but you may get back less than you paid in. What happens if I change my mind? Your additional contribution will be cancelled without affecting your existing ISA investments. 3

5 What happens to my With Profits Life ISA if I die? We ll pay out whichever of the following gives the highest amount, either: The total of all investment money paid in, less the total of any withdrawals taken before the date of death, or 101% of the value of units allocated to your With Profits Life ISA at the date of death. A final bonus (depending upon investment performance) may be paid in addition. We guarantee never to apply a Market Value Reduction on death claims. We use the unit price current at the date of death (if the date of death is not a valuation day, this will be the unit price calculated on the previous valuation day). Please see Section 1 of the Policy Conditions for a definition of valuation day. The proceeds from your investment will be tax efficient until the date of death. We ll try to pay out as quickly as possible. Sometimes it s not possible to pay straight away, so if it takes longer than 60 days from the date of death, we ll add interest (taxed at 20%) to the amount we pay, from day 61 until the money is paid out. The proceeds will form part of your estate for inheritance tax purposes and will normally be paid to your legal personal representatives. What are the charges? We currently deduct 0.147% a month from investment returns before determining bonuses for all policies. For yearly premiums under 750 a year and for all regular monthly premiums we cancel some units from your ISA to pay a small monthly policy fee. The policy fee is shown on your annual statement. This may change each year on 1st August in line with inflation as measured by the change in the Retail Prices Index (for the 12 month period ending the previous April). For single premiums and yearly premiums over 750, there is no monthly policy fee. What about tax? Tax reclaims are made to HM Revenue & Customs by Liverpool Victoria Friendly Society Limited and are used to increase the value of units in the with-profits fund. Capital gains made by the with-profits fund are tax free. A full reclaim will be made of tax deducted from fixed interest investments. How much tax you pay depends on your personal circumstances. Any references we make to taxation are based on our understanding of current legislation and HM Revenue & Customs practice, which can change. How much will the advice cost? We do not offer advice for this product. If you need advice about whether this plan is suitable for your needs, please contact a financial adviser who will tell you about their charges. How will I know how my With Profits Life ISA is doing? Each year we will send you a statement showing details of your ISA. Further Information Law The With Profits Life ISA and its terms and conditions are governed by the laws of England and Wales. In the unlikely event of any legal disagreement, it would be settled exclusively by the courts of England and Wales. We ll always communicate in English. ISA Manager This is Liverpool Victoria Friendly Society Limited. Retail Clients We re required by our regulator, the Financial Conduct Authority, to categorise our customers to determine the level of protection they will receive. If you invest in our With Profits Life ISA described in this Key Features Document, we will treat you as a retail client. This gives you the highest level of protection available under the Financial Conduct Authority rules. Complaints If you have a complaint about any part of the service you receive from us, it s important that we know about it, so we can help put things right. You can let us know by calling us on (for textphone, dial first). Or, you can write to us at: Box 2, LV=, County Gates, Bournemouth. BH1 2NF. Your complaint will be dealt with promptly and fairly and in line with the Financial Conduct Authority s requirements, and if you want more information on how we handle complaints, please contact us or visit We hope that we will be able to resolve any complaint that you have. If you re unhappy with the resolution of your complaint, the Financial Ombudsman Service may be able to help you free of charge, but you ll need to contact them within six months of receiving our final response letter. Their website is which includes more information about the service, including details of the various ways they can be contacted. If you make a complaint it won t affect your right to take legal action. With Profits Life ISA Key Features 4

6 Compensation We ve been in business since 1843, and take great care to manage our affairs sensibly. We re required to publish a report each year about our solvency called a Solvency and Financial Condition Report. Solvency is a company s ability to meet its long term financial commitments and this report will help you understand more about our solvency and how we manage our capital and risks. The report will be available from the end of June 2017 onwards. If you d like a copy you can visit or you can write to: Group Company Secretary, County Gates, Bournemouth BH1 2NF. If we ever did get into financial trouble and couldn t honour our commitments, you would be entitled to compensation from the Financial Services Compensation Scheme. The compensation you could get depends on the type of product you have. For this type of plan, the scheme covers 100% of the claim. The scheme s first responsibility is to seek continuity rather than to pay compensation. For more information go to or call or You can get this and other documents from us in Braille or large print by contacting us. Liverpool Victoria Friendly Society Limited: County Gates, Bournemouth BH1 2NF. LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Friendly Society Limited (LVFS), and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. LVFS is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number LVFS is the ISA Manager. Registered address: County Gates, Bournemouth BH1 2NF. Telephone: /17