Frequently Asked Questions
How does the Tax Free Savings Plan work?
The money you invest in your Tax Free Savings Plan is allocated to units within our With Profits fund, which invests in a broad range of stocks and shares, fixed interest securities, properties and other investments. The growth will depend on the profit made and how it is distributed.
The number of units will depend on the amount of money being added to the plan and the price of the units at that time. The ongoing value of the savings depends on the value of the units held in the plan. You can find the price of our units in the Financial Times or on the LV= website.
Because this is a stockmarket related investment you are not certain to make a profit and could get back less than you have paid in.
How does LV= smooth the effects of the ups and downs of the stockmarket?
To provide stability over time, we hold back some of the investment returns in good years to offset returns when investment performance isn't so good. This smoothing effect allows the investment performance to be cushioned from the daily fluctuations, either upwards or downwards, of the stockmarket. Investors in funds which don't smooth returns could see the value of their investments rise or fall faster than those in a smoothed fund.
What happens if you cash in your Tax Free Savings Plan?
If the Tax Free Savings Plan is cashed in before the end of the term, the Society reserves the right to apply a Market Value Reduction, in certain circumstances, such as due to the impact of adverse investment conditions. If applied, this will reduce the amount paid out and may reduce it to less than the amount paid in. We will not apply a Market Value Reduction on maturity or on a death claim. Also, if you choose to cash in your plan before the end of the term, the amount paid out may not be tax free (please read the Key Features document for more information).
Can you provide a lump sum for your children?
Yes, providing the child is 16 or under at the start of the plan. The Tax Free Savings Plan for Children has a minimum term of ten years. If your child is aged 6 or over, the plan will last for 10 years. For a child under 6, the plan will mature on the plan anniversary after their 16th Birthday.
For example, if your child is 2 years old now, the Tax Free Savings Plan will last for 14 years. If you want to save for longer, before your child is 16 you can choose to extend the Tax Free Savings Plan at any plan anniversary for a further 10 years.
Like the Tax Free Savings Plan for Adults, the money you invest in the Tax Free Savings Plan for Children is allocated to units within our With Profits fund.
Next steps
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