Why invest in a With Profits ISA?The With Profits ISA is a stocks and shares ISA that lets you invest tax-free in our With Profits ISA Fund. With the fund linked to Wesleyan’s profits as a business, it offers both the potential for investment growth and the chance of a bonus each year…
- Invest in a fund managed by an award-winning investments team
- Take your share of Wesleyan's profits
- Pay no income tax or capital gains tax on your investment returns
- Worry less about market dips thanks to a process called 'smoothing'
How it works
When you save money into your With Profits ISA, you’re buying units in Wesleyan’s With Profits ISA Fund. It’s our flagship fund - currently holding more than £3bn of people’s investment.
The fund aims to grow your money over a medium to long-term period (5 to 10 years), by investing in UK and international shares, government and corporate debt, property, cash and other financial investments. When the value of these fund assets goes up, so does the value of your ISA.
There are two things that really set the With Profits ISA apart from other stocks and shares ISAs though – and that’s our profit-sharing bonuses and smoothing. You can find out more in this short video, or by reading below:
Share in our success
As well as investing in a range of assets, the With Profits ISA Fund includes 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 that by adding regular bonuses to your ISA when we can. We can't promise to pay bonuses every year, but even in the challenging climate of 2020, we paid out a 1% bonus to our ISA holders at an average of £383 per person.
Sometimes, you might get a final bonus when you cash in your investment too.
Smoother, steadier returns
While all investments are subject to the ups and downs of the stock market, our fund aims to reduce sharp rises and falls through a process called smoothing.
This means holding back some returns when market performance is strong, to support returns when the market experiences losses – reducing day-to-day fluctuations in your investment.
In 2020, Wesleyan's With Profits Fund was rated top out of 20* funds for overall performance over a five-year period, in a report by Barnett Waddingham, a leading independent UK consultancy service.
But what does strong fund performance mean for your money?
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.
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. Figures shown are after the deduction of 1.2% annual management charges, assuming no ongoing advice charge, and include the effects of smoothing.
*Only 20 of 65 funds provided five-year net return data for comparison.
Managed for you
For the future
Risk and reward
Managed for you
You don't need to be a skilled investor to open a With Profits ISA. Our experienced investment team manages the fund on your behalf, so you can concentrate simply on saving.
You’re in good hands too. Our team was named Investment Team of the Year at the Insurance Asset Risk Awards 2020.
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.
Risk and reward
With any stocks and shares ISA, there’s always an element of risk as well as potential reward. 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, Wesleyan Financial Services Consultants are on hand to help.
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 investments team, 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 I manage my With Profits ISA?
Once you've opened your ISA, you can top up and manage your account online, or if you prefer, by phone or post.
Can I withdraw money from a With Profits ISA?
The With Profits ISA is best suited to people who are able to commit for at least five years, so ideally, you should only invest money you won't need to touch in the short term. That said, you can withdraw money at any time if you need to, as long as you withdraw at least £500 each time.
What does the With Profits Fund invest in?The fund invests in a wide range of assets including UK and international shares, government and corporate debt, property, cash and more. If you'd like to see a full asset breakdown and a list of the fund's top holdings, take a look at the With Profits Fund factsheet.
How do bonuses work?
We regularly review the performance of our With Profits ISA Fund, and when results allow, we increase the value of your ISA by adding a bonus. We can’t guarantee a bonus every year, but when a bonus is paid, it’s added automatically to your ISA – you don’t need to do anything to claim it.
Because of smoothing, where the With Profits Fund sometimes holds back your investment returns in periods of growth, you might also be due an additional bonus when you cash in your investment.
Want to transfer in from an existing ISA?
You’ll need to book an appointment with your Wesleyan Financial Services 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.
Things to know before you apply
If 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. If you are unsure, please seek advice from a Wesleyan Financial Services Consultant.
Annual Management Charges
When you open a With Profits ISA, you’re agreeing to pay an Annual Management Charge (AMC) of 1.2%. This charge is collected from your ISA to cover our costs in managing your account and investments.
Please note if you are already opted in to Wesleyan Financial Services’ Ongoing Advice Service (OAS), the Annual Management Charge is 1.7%.
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 summary
The With Profits ISA is a stocks and shares ISA. You can hold multiple ISAs at the same time, but please note you can only contribute to one stocks and shares ISA in a tax year. In total, you can save up to £20,000 in ISAs in the 2020/2021 tax year.
To apply for a With Profits ISA, you must be a UK resident for tax purposes.
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.
Before you apply to open a With Profits ISA, please read the following documents: