Guaranteed Savings Plan
This plan enables you to invest regular monthly amounts in our Unitised With-Profits Fund, which aims to provide long-term growth.
You can build up a lump sum for a special purpose, or simply for a rainy day; even for a child’s education – helping them to avoid the university debt-trap.
You choose the amount you wish to invest each month, at the outset; between £50 and £500 and then select a term of between 10 and 25 years.
Because we know that teachers don't normally like taking too much risk with their money, the Guaranteed Savings Plan is designed to take the sting out of the inevitable 'downs', while enabling you to benefit from the 'ups'.
Whatever happens to the value of your investment, as long as you pay all your premiums throughout your chosen term, we guarantee you will at least get all your money back.
As this plan can invest in stocks and shares, its value can go down as well as up, during the plan term. If you cash it in early, you may not get back what you have paid in.
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What type of savings plan is this?
This plan provides a disciplined way for you to invest regularly, over the longer term.
You choose a fixed amount that you can afford to pay in each month by direct debit – anything from £50 to £500, for a term of between 10 and 25 years.
Your monthly premiums, after charges, are invested in our Unitised With-Profits Fund ("the Fund"). For details of where this Fund can invest, please see the section below entitled "How do you invest my money?".
At the end of the term, the plan matures and you will receive a lump sum.
Please note that as a mutual friendly society, we have no shareholders to pay so all our profits are used to benefit our members.
By investing in this Fund, you will become a member, which qualifies you for other, special membership offers too and, after 3 years, enables you to vote on various issues at our Annual General Meeting.
For further information about how the plan works, please read our Guaranteed Savings Plan Key Features Document.
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How do you invest my money?
The Unitised With-Profits Fund can invest in a range of assets including equities (company shares), fixed interest bonds (government and company), index linked bonds, property and cash. How much you get back will depend on how long you invest, the types of asset held in the Fund and how well these assets perform.
The mix of assets will change over time. Throughout 2008 and the first quarter of 2009 there were substantial falls in the value of equities and property across the world. During this time, we reduced the amount of equities held (at times down to nil) within our With-Profits Fund and took a relatively cautious approach to investment by holding more of the Fund in cash and government bonds. Although these are more stable types of investment, historically they have not produced the best returns over the longer term. However, they did help to reduce the ups and downs in comparison to holding a larger proportion of equities in the Fund, during this period of turbulence.
Since the second quarter of 2009 we have gradually re-introduced more equities into the Fund. The level of equities and property investment is now around our target level of 60% which is the amount shown in our “Guide to how we manage the With Profits Fund”. Over the longer term, equities are generally considered to provide the opportunity for higher investment returns. The investment performance of the Fund and the overall return you can expect depends on the mix of assets held over the lifetime of your plan.
The chart below gives the asset mix of the Unitised With Profits Tax Exempt Fund as at 31st March 2010.
(Figures have been rounded)
Target Position
The chart below show our long-term, target asset mix for the Fund (60% invested in equities and property in total):
(Figures have been rounded)
Want to know more?
To find out more about the current mix of assets and how the With-Profits Fund works, please go to the Unitised With-Profits page.
Alternatively you can download a copy of our Guide to how we manage our With-Profits Fund (Unitised).
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How risky is it?
All of our savings and investment plans are given a risk and reward rating, to help you choose something that you feel comfortable with. Here’s how our Guaranteed Savings Plan rates:
Your attitude to risk Product risk profile Volatility 2 or 3 (Cautious / Balanced) Low to Medium Low to Medium This means that you:
- Are only willing to take low to medium levels of risk;
- Are prepared to accept the potential for only a modest amount of capital growth in return for the greater security of your capital;
- Understand that you could get back less than you paid in, if you cash in the plan early.
The fund in which your money is invested has the ability to use a range of assets and over time, may hold a high proportion of equities (company shares). This means it is suitable for a medium risk investor. However, because the plan comes with a money back guarantee it is also suitable for cautious investors.
Inflation will reduce what you can buy with your plan proceeds, in the future.
To find out more about Risk and Reward, go to our Risk and Reward page or download our Risk and Reward leaflet. Printed copies are also available on request.
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How does my investment grow?
There are two ways that your investment can grow:
Via Unit Prices
Each month, your premium, after charges, buys units in the Fund. The price of these units will depend on how well the underlying assets in the Fund perform.
The lower the unit price, the more units your premium purchases and vice versa.
The value of your investment on any given day will depend on the total number of units you have and the unit price on that day.
The plan includes some very important safeguards in the event that unit prices are low at or near the end of your plan term. See the section entitled "What could I get back?" below.
Via Mutuality Bonuses
Each year, we review how well we have done in all aspects of our business. As well as the potential for growth in your units from our With-Profits business, we may also add bonus units to your plan if we have made a profit in other aspects of our business.
These are known as mutuality bonuses. Although we cannot guarantee to pay these every year, once we have added a mutuality bonus to your plan, this will boost the number of units you hold and therefore your plan's value.
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How will I know how my investment is doing?
You will receive an annual statement that tells you how many units you have and how much they are worth.
You can track unit prices via our Fund Prices page (See the Guaranteed Savings Plan section).
You can also monitor your plan’s progress via our My Plans facility, which allows you to check on your investment, securely online.
Alternatively, you can call our Helpline on 0800 056 0563.
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What could I get back?
When your plan matures, you will get back the best of the following 3 options:
Option 1 - Cash Value
This is the number of units you hold multiplied by the unit price on the day your plan matures.
We cannot guarantee how much this will be, but here are some example returns.
Based on a female investor aged 29 with a regular premium of £50 per month over 10 years:
Illustrated Return 3.5% 5.5% 7.5% Guaranteed Amount Premium £50 per month £6,300 £6,930 £7,630 £6,000 These figures are not minimum or maximum amounts. What you will get back depends on how your investment grows and the tax treatment of the investment. The example rates of return shown here are 0.5% lower than the standard rates that we would normally use to illustrate potential returns. This is to reflect the current mix of assets in the Fund and current investment conditions.
Option 2 - Smoothed value
To protect you from falls in unit prices towards the end of your plan term, we calculate a smoothed value of your units. This is the number of units you hold, multiplied by the average unit price in the last 2 years of your plan. If this is higher than your Cash Value, you will receive this value instead.
Option 3 - Guaranteed Amount
As a further protection, whatever happens to the value of your units, you are guaranteed to receive back a return of your premiums at your chosen maturity date, along with any ‘matched’ premiums we have added at the outset.
To benefit from this important safeguard, you must have paid in all your premiums, throughout the plan term.
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Why choose Teachers Assurance?
Started in 1877 by teachers - for teachers.
30,000 teachers a year in 3,000 schools in England and Wales turn to us for financial direction. (And that's excluding other teachers who phone in or email us.)
No one understands the financial needs of teachers better than us.
As a mutual friendly society our business is built on helping teachers to:
- Protect themselves and their families
- Save for the future
- Invest efficiently
- Get the most suitable advice
- Make confident financial decisions
To find out more about how we treat our customers go to the following page:
- About us - See who we are and what you can expect from us.
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What if I need your help or advice?
If you need our help or advice, please give us a call:
0800 056 0563
8.30am to 8pm Weekdays
9am to 1pm SaturdaysTo help us continually improve customer service, calls may be recorded or monitored.
Ask us for information
Our Helpline can answer any questions you have or post you an application pack for any of the products on offer.
Ask us for advice
Our expert Financial Consultants can help you choose the most suitable products for your needs, you can ask for personal financial advice over the phone or face to face .
Ask us for a school visit - Money Talks!
Book a school visit for one of our Financial Consultants to hold a free financial planning session for teachers in your school.
Our Consultants are only able to advise on our own products and services and those of selected third parties.
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How do I apply?
If you’d like to apply online, you can do so quickly and securely. There are two easy steps:
Step 1
Read the Key Features document and the Guide to how we manage the With-Profits Fund (Unitised). These outline the commitment you will be making and the risks of the plan. They will also give you information on how the Fund works, how bonuses are calculated and the charges.
Guaranteed Savings Plan Key Features Document
Guide to how we manage our With-Profits Fund (Unitised)
Step 2
Click here to Apply online
Important Note
None of the information on our website should be considered advice to save, invest or purchase. If you are in any doubt as to whether a product is suitable for you, please ask us for advice. We are able to advise on our own products and those of carefully selected third party providers.
