Because of the favourable tax treatment, the Government has set maximum limits of £25 a month or £270 per year. You can make these payments by Direct Debit. If you already have one or more TESPs with us you can still apply for another one, and invest as little as £10 a month or £100 a year, as long as you don’t exceed the maximum limits.
The Family Bond is a qualifying policy. There is an overall limit of £3,600 per year that can be paid into qualifying policies that you hold. If you have one of these policies, regular yearly or monthly payments will be made and the policy will have an initial payment term of at least 10 years. The policy will also include some life cover.
Tax Exempt Savings Plans (TESPs) are a way you can save tax-efficiently over the long term. They provide a tax-free lump sum at the end of the payment term you choose; payments must be made for at least 10 years. TESPs are exclusively available from friendly societies, like OneFamily.
The payment term you choose can be between 10 and 25 years, but they must be in full years. If it hasn’t already been cashed in, the Family Bond will mature on your 85th birthday.
You have 30 days to cancel the Family Bond. If you wish to cancel, please complete the cancellation notice included in your Welcome Pack. Any money you have paid in will be returned to you in full.
If you cash in the Family Bond in the first year, it will have no value. From year two to the Family Bond’s 10th anniversary, you will get back the policy value less a £50 charge.
Please remember if you cash in your Family Bond before its 10th anniversary, you may have to pay tax on any growth. This type of investment has to be invested for, at least, 10 years to be tax-efficient.
There is an annual management charge of 1.95%. There may also be expenses deducted from the Family Balanced International Fund, in which the Family Global Fund invests. This may change, but the effect on the Family Global Fund is currently estimated to be no more than 0.2% of its value each year.
There’s also a charge for life cover, which we take each year on the Family Bond’s anniversary by cashing in units. We only take this if the value of the Family Bond is less than the amount of life cover. Please refer to 'Charges' in the Important Information booklet and the Key Information document.
The Family Bond is invested in a tax-exempt fund, although income received by the fund may be taxed before we receive it.
The final sum you receive will be free from Income Tax and Capital Gains Tax, as long as you make payments for at least 10 years. The tax advantages of the Family Bond will depend on your individual circumstances and could change in the future.
Yes TESPs are covered by the Financial Services Compensation Scheme (FSCS). You may qualify for compensation from the FSCS if we fail or go bankrupt. Circumstances vary, but most types of long term investments like the Family Bond are covered for 100% of the claim with no upper limit. If you’d like more information about the FSCS, please visit www.fscs.org.uk
