With Profits ISA

Share in Wesleyan’s financial success

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Why invest in a With Profits ISA?

The With Profits ISA is a stocks and shares ISA. It gives you the flexibility and tax advantages of an ISA, combined with the benefits of investing in our With Profits ISA Fund. 
  • Save up to £20,000 in the 2020/2021 tax year
  • Pay no income tax or capital gains tax on your investment returns
  • Share in Wesleyan's profits through the With Profits ISA Fund
  • Smooth the ups and downs of market returns
  • Invest in a fund managed by an award-winning team
  • Manage your account online
  • Open with as little as £1,000 (or £100 per month)

Annual management charges apply. If you take advice from Wesleyan Financial Services, an initial advice charge will also apply.

Keep in mind that investment values can go down as well as up, so you could get back less than you invest.

How it works

When you save money into your ISA, you buy units in our With Profits ISA Fund.

The fund aims to provide capital growth over a medium to long-term period, investing in UK and international shares, government and corporate debt, property, cash and other financial investments (you can take a look at our With Profits ISA Fund factsheet to find out more about how the fund invests).

Crucially, our With Profits ISA Fund differs from other investment funds in two key respects - profit sharing and smoothing:

01

Share in our success

The value of the With Profits ISA Fund depends not just on returns from our investments, but also on Wesleyan’s profits and losses from across the business. As a mutual, we have no shareholders to pay - so we can share our financial success with you.

We do this where possible by adding regular bonuses to your ISA throughout the period of your investment. Sometimes, you might be entitled to a final bonus too.

We can’t promise to pay bonuses, but when we do add them, they can make a significant difference to your final cash-in value.

02

Smoother, steadier returns

While all investments are subject to the volatility of the stock market, our fund seeks to reduce sharp rises and falls through a mechanism called smoothing.

This means holding back some returns when market performance is strong, to support returns when the market experiences losses - mitigating the effect of any short-term market fluctuations.

Before you apply for your ISA, please make sure you understand how smoothing, bonuses and Market Value Reductions (MVRs) work. They are discussed in the How our With Profits Fund works booklet.

Investment performance

The table below shows what the potential cash-in value of a With Profits ISA would have been at 30th June 2020, if you had deposited £10,000 in the fund on 1st July one, two, three, four, five or ten years ago with no initial fee.

These figures are based on the historical performance of the fund. Bear in mind that past performance is not a reliable guide to future performance.

Figures shown are after the deduction of 1.2% annual management charges, assuming no ongoing advice charge, and include the effects of smoothing.

Wesleyan With Profits ISA Fund
1 year£10,089 2 years£10,218 3 years£10,833 4 years£12,469 5 years£12,301 10 years£18,952

Source: Wesleyan internal information. Figures correct as at June 2020.

  • One for the future
  • Save your way
  • Risk versus reward
  • Invested by experts

One for the future

The With Profits ISA is best suited to those willing to invest for a minimum of five years, allowing more time to benefit from any potential capital growth. After five years, you can also start to draw regular monthly income from your account.

You can still withdraw your money at any time if you need to, via one-off withdrawals over £500.

Save your way

Whether you have a lump sum ready to invest, or you want to build your savings month by month, the Wesleyan With Profits ISA can work for you. You can open an ISA with a minimum investment of £1,000, or by setting up monthly contributions from £100 per month.

You can also top up your ISA at any time to make the most of your yearly ISA allowance, with a £500 minimum lump-sum contribution. Read more on ISA rules and allowances here.

Risk versus reward

If you choose to invest in the With Profits ISA, you’ll need to be comfortable with an element of risk. As with any investment, you may get back less than what you paid in.

At Wesleyan, we classify investment risk and reward using a 1 to 5 scale, where 1 represents the lowest risk and 5 represents the highest. We rate the With Profits ISA Fund as a risk category 3, meaning a moderate level of risk and reward.

If you aren't comfortable identifying the level of risk that's right for you, please book an appointment to receive financial advice.

Invested by experts

You don’t need to be a skilled investor to open a With Profits ISA.

Our experienced investment team (Investment Team of the Year at the Insurance Asset Risk Awards 2020) manages the fund on your behalf - so you can concentrate simply on saving.

Frequently Asked Questions

  • Is the With Profits ISA a stocks and shares ISA?

    Yes it is. We call ours a With Profits ISA as you're investing in our With Profits ISA Fund, but it works like most other stocks and shares ISAs. The money you save into your ISA is invested into the stock market by our fund managers, to try and make your savings go further.

  • Am I eligible for a With Profits ISA?

    Our With Profits ISA is open to UK residents (for tax purposes) aged between 18 and 74. Before you can open your ISA, we’ll just need you to complete a knowledge check to make sure you understand how the ISA works. To open an ISA with Wesleyan, you must also make sure you haven’t contributed to another stocks and shares ISA in the same tax year.

  • How much can I invest in a With Profits ISA?

    Each tax year (6th April to 5th April), there’s a certain amount of money you’re allowed to put into an ISA. For tax year 2020/2021, that allowance is £20,000. Just be aware that tax rules for ISAs can and do change, so the allowance may vary from year to year.

  • How do bonuses work?

    We regularly review the returns on our With Profits ISA Fund, and if our review shows that the returns are sufficient, we will increase the value of your units by adding bonuses. These bonuses can be added throughout the period of your investment, and when you eventually cash-in your investment, you may also receive a final bonus. Remember though, bonuses are not guaranteed to be paid each year.

Ready to open your With Profits ISA?

You can open a With Profits ISA online or via your Wesleyan Financial Services Consultant.
When you open your ISA online, you will not receive any investment advice or personal recommendation from us. Please therefore make sure you have read the important information and key documents below before applying, to make sure the investment is right for you.

 

 

Want to transfer in from an existing ISA? 
You’ll need to book an appointment with your Financial Consultant (initial advice charge applies).

Got a question about the With Profits ISA? 
Call us on 0121 200 9341. We're open Monday to Friday, 9am to 5pm.

Important information:
Things to know before you apply

Charges

When you open a With Profits ISA, you’re agreeing to an Annual Management Charge. These charges are collected from your ISA to cover our costs in managing your account and investments.

Depending on how you apply for your ISA, you may also incur an initial charge - but apply online, and there’ll be no initial charge to pay.

With Profits ISA Initial and Annual Management Charges
Initial charge for online applications  None
Initial charge for advised applications or transfers  3% of your contribution or transfer in
Annual Management Charge (AMC) without Ongoing Advice Service (OAS) 1.2%
Annual Management Charge (AMC) with Ongoing Advice Service (OAS) 1.7%

The maximum Annual Management Charge is 1.7%, if you opt in to our Ongoing Advice Service (OAS). Opting in for this service means your Financial Consultant will provide proactive advice and guidance on any relevant changes to taxation, regulations or your professional entitlement, to ensure the product remains right for you.

Please note there are other costs associated with managing investments. The Key Information Document illustrates how these may affect an investment made into a With Profits ISA.

Smoothing and Market Value Reductions (MVR)

To try and deliver steady returns, the With Profits Fund applies a mechanism called smoothing. This means we may hold back some of your returns when market performance is strong, in order to reduce the impact of periods of poor market returns.

If you choose to withdraw money from your ISA at certain times (usually when share prices have fallen substantially), we may also apply an adjustment which reduces how much you get back from that withdrawal. This is called a Market Value Reduction.

A Market Value Reduction is not a charge applied for Wesleyan's benefit. It's designed to protect those still invested in the fund from a high volume of withdrawals being made by other customers at unfairly high valuations.

ISA and tax rules

You'll pay no personal income tax or capital gains tax on your investment returns from the With Profits ISA. This is based on current understanding of legislation and tax treatment, which can change in the future.

You can invest in a stocks and shares ISA, cash ISA, Innovative Finance ISA or a Lifetime ISA or combination of all four in the same tax year - subject to maximum investment limits set by HM Revenue & Customs (£20,000 overall, of which up to £4,000 can be invested into a Lifetime ISA in the 2020/2021 tax year).

If you invest in a Wesleyan With Profits ISA, you will not be able to invest in another stocks and shares ISA during the same tax year (unless you transfer all of your current tax year investment from a Wesleyan With Profits ISA to another provider).

If your spouse or civil partner died on or after 3 December 2014 you may be entitled to additional ISA allowance, up to the value of your spouse or civil partner's ISA savings at the time of death. If this affects you, please contact your Financial Consultant.

You are able to transfer existing ISA holdings from another provider, if you wish to consider this you will need to contact your Financial Consultant.

Please note you have the right to cancel your new investment within 30 days of the date you receive your cancellation notice (part of your plan documentation).

Key documents

Before you apply to open a With Profits ISA, please read the following documents: