Questions and Answers

What is a metfriendly Investment ISA?

It is a tax-efficient savings plan for regular savings and lump sum investments, designed as a Investment ISA to comply with ISA regulations to shield your savings from income and capital gains taxes.

Who can take out a metfriendly Investment ISA?

You must be resident in the UK for tax purposes and over the age of 18. To invest with us you must work or have worked in the police service - or be the partner or close relative of such a person.

How flexible is it?

You can alter the amount you invest, subject to the minimum premium of £50 pm. You can also stop contributions and restart them at any time - but please remember that you only earn bonuses on the money invested.

When can I take money out?

You can invest for as long as you want; there is no fixed term and no maximum age limit. You can contact us at any time to cash in part or all of your plan, although you should bear in mind that the plan is designed as a medium to long term investment.

How do I withdraw money when I need it?

All you have to do is send or fax us a signed letter detailing your request and giving details of the bank or building society account where we should pay your money. Requests received by Friday are normally credited to your account the following Wednesday. Where there is an intervening public holiday, different arrangements apply. Please contact us for more details..

How does the metfriendly Investment ISA work?

• You invest a regular monthly premium (min £50) with the Society
• You can also pay in lump sums (min £1,000, no limit for top ups).
• You can transfer a Cash or Stocks and Shares ISA to us from another provider (no limit).
• Where you save a monthly amount, this will continue from one tax year to the next unless you tell us otherwise
• At the start of each new tax year your monthly contribution will go into a new numbered certificate and we will send you a certificate showing your investments during the previous tax year.
• At the end of each calendar year, we add a bonus to all your investments and send you a bonus notice.
• Once added, bonuses are permanent additions to your investment with us.
• Bonuses are compounded, so in subsequent years you earn bonuses on the bonuses.
• Provided you invest each plan for at least 3 years, we normally add a final bonus when you cash it in.
• The ISA has no fixed term and you can leave it invested for as long as you wish. You should, however, view it as a medium to long term investment - at least 5 years.
• You can transfer your accumulated metfriendly ISA to another provider, but please remember that our ISA is designed as a medium to long term investment.

How much can I withdraw?

Each separate certificate can be surrendered in full or in part, but can only be partly cashed-in once; i.e. if partly cashed-in, any further cashing-in of that certificate must be the remaining full amount.

Where is my premium invested?

The premiums are invested in the metfriendly with-profits fund which is made up of equities, government bonds, commercial property, corporate bonds and cash. The approximate "mix" is listed below as from 31st December 2010. For more information on how the with-profits fund works, please refer to "How we manage the with-profits fund".

1. Equities 40%
2. Government Bonds 27%
3. Corporate Bonds 19%
4. Commercial Property 9%
5. Cash 5%

How are bonuses determined?

Bonuses are decided by the Board acting on the advice of the with-profits actuary. A key factor in determining bonuses is the investment return in recent years. Please view How we manage the with-profits fund for more details.

What happens if the stockmarket falls?

All of our assets can rise and fall with the stockmarket, although investing in a range of assets does provide some protection to the fund. It is possible that this will result in the value of your plans reducing from time to time.

On the 10th anniversary (measured from the end of the first tax year for regular monthly premiums) and on each fifth anniversary thereafter, we guarantee that the plan value will never be less than the premiums you paid in plus all bonuses.

How do I apply for a metfriendly Investment ISA?

Applications can be initiated online using one of the following forms : Regular Premium ISA or Lump Sum ISA.

If you are not currently serving in the London Police Services we will also require reasonable proof of identity (Copy Birth Certificate, Driving Licence or Passport).

Serving officers or staff in the Metropolitan and officers in the City of London Police Services can authorise us to take monthly premiums from their salary - both for their plan and that of their partner. Any amount subscribed in this way for a partner must be their own money.

If you are retired or a relative, or simply wish to pay by direct debit, we will send you a direct debit form (unless you already pay this way).

As an alternative to the online application you can print off and send us a completed application form, see PDF Application Form links in the menu on the right.

What if I change my mind?

We will send you a certificate showing your benefits and a cancellation notice. If you change your mind, you can return the notice within 30 days for a full refund.

What happens if I move abroad?

You cannot make any further contributions but you can leave what is already in the ISA to remain there and this will continue to qualify for normal ISA bonuses and tax treatment.

What happens if I die?

This plan will cease and the current value of your plan will be paid to your estate.

What might I get back?

An example - What you might get back after 10 years for a regular monthly premium of £100:

• If investments grew at 4.0% a year - you would get back £13,300
• If investments grew at 6.0% a year - you would get back £14,700
• If investments grew at 8.0% a year - you would get back £16,300

The following examples show what you might get back. They assume that investments will grow at 6.0% a year.

The early years

At the end of year	Total premium paid in to date	Effect of deductions to date	What you might get back
1	£1,200	£42	£1,190
2	£2,400	£97	£2,440
3	£3,600	£193	£3,740
4	£4,800	£306	£5,090
5	£6,000	£439	£6,520

Warning - if you cash in during the early years, you could get back less than you paid in.

The later years

At the end of year	Total premium paid in to date	Effect of deductions to date	What you might get back
10	£12,000	£1,500	£14,700

What are the charges?

• The deductions include the cost of expenses, charges, any surrender penalties and other adjustments.
• The last line in the table shows that over a ten year period the effect of the total deductions could amount to £1,500.
• This would have the same effect as bringing down the investment growth from 6.0% a year to 4.1%.

An example - What you might get back after 10 years for a lump sum investment of £5000:

• If investments grew at 4.0% a year - you would get back £6,450
• If investments grew at 6.0% a year - you would get back £7,800
• If investments grew at 8.0% a year - you would get back £9,410

The following examples show what you might get back. They assume that investments will grow at 6.0% a year.

The early years

At the end of year	Total premium paid in to date	Effect of deductions to date	What you might get back
1	£5,000	£150	£5,150
2	£5,000	£312	£5,300
3	£5,000	£380	£5,570
4	£5,000	£456	£5,850
5	£5,000	£542	£6,140

Warning - if you cash in during the early years, you could get back less than you paid in.

The later years

At the end of year	Total premium paid in to date	Effect of deductions to date	What you might get back
10	£5,000	£1,150	£7,800
15	£5,000	£1,950	£10,000
20	£5,000	£3,140	£12,900
25	£5,000	£4,880	£16,500

What are the charges?

• The deductions include the cost of expenses, charges, any surrender penalties and other adjustments.
• The last line in the table shows that over a ten year period the effect of the total deductions could amount to £1,150.
• This would have the same effect as bringing down the investment growth from 6.0% a year to 4.6%.

What about tax?

There is no liability for Income or Capital Gains Tax during the life of the plan, nor on cashing it in. You can even disregard it when completing your Tax Return (however, this could be changed by the Government at any time).

How much will it cost for advice?

• We do not offer or give financial advice.
• We do not make any form of commission or incentive payments.
• The cost of providing verbal or written information about this product is included in our overall expenses.

Is it suitable for me?

If you are unsure as to the suitability of this product, and wish to obtain personal advice, you should contact an independent financial adviser.

How will I know how my plan is doing?

We will send you a bonus notice every year, showing you the annual bonuses that have been earned; any final bonus (payable on encashment) will not be shown.

How do I contact you?

Metropolitan Police Friendly Society Limited,

Berwick House,

8-10 Knoll Rise,

Orpington,

Kent,

BR6 0EL,

Phone: 01689 891454

Fax: 01689 891455

Metphone 28192

Email: enquiries@mpfs.org.uk

Web: www.mpfs.org.uk.

Can I transfer my existing ISA to the metfriendly one?

Yes, please read the following guidance carefully and if you wish to proceed with a transfer to us, just complete the "Transfer Application Form" (Form C) and return it to us.

What types of ISAs can I transfer to metfriendly?

You can transfer an existing Stocks and Shares ISA (including a former PEP), to metfriendly and you can transfer an existing Cash ISA to the metfriendly Investment ISA. Once you transfer a Cash ISA to a Stocks & Shares ISA, that money cannot be transferred back to a Cash ISA in the future.

How much can I transfer?

1. All or part or none of your contributions in previous tax years; and
2. All or none (but not just part) of your contributions so far in the current tax year.

What happens if the money was saved in previous tax years?

You can transfer some or all of your ISA money saved in previous tax years to our ISA without affecting your current year's annual ISA investment allowance.

For example - let's say you have a total of £9,000 saved in Cash ISAs from previous tax years, and you plan to invest your full current year ISA allowance of £10,200 into our Investment ISA. In the same tax year, you are allowed to transfer some or all of the £9,000 to our ISA, without breaching the maximum limits.

What happens if the money was saved in the current tax year?

You are able to transfer ISA money saved in the current tax year to our Investment ISA. Such transfers must be the whole amount saved in that ISA in the current tax year up to the day of the transfer.

You can transfer a Cash ISA to a ISA (but not if that means you are running two ISAs for the same tax year; so if you are still going to be paying into a ISA with another provider, you cannot transfer into our ISA). Once money saved in the current tax year is transferred from a Cash ISA to our Investment ISA, it is treated as if it had been invested directly into our Investment ISA in this tax year. You are able then to still save up to the full remaining balance of your £10,200 annual ISA investment allowance in ISAs in this tax year (including up to £5,100 in a new Cash ISA).

For example - let's suppose you had already paid £5,100 in to a Cash ISA at the beginning of a tax year. You could transfer the whole £5,100 to our Investment ISA. You could then save up to another £5,100 into a new Cash ISA (as your old one is treated as gone). Alternatively, you could save another £5,100 into our metfriendly ISA (making £10,200 in total in Stocks and Shares ISA), or even split the £5,100 between a Cash ISA and the metfriendly Investment ISA.

If you are considering a transfer please ring us and we will be pleased to explain how it applies to you.

Can I add to the transferred ISA?

Yes, but if your transfer includes any contributions from the current tax year, you must deduct that amount from the maximum you are allowed to contribute. Within that maximum, if you wish to make more contributions immediately, or start making regular payments, please apply online or complete the normal application (Form A or Form B as appropriate) and send it to us at the same time as the transfer form.

Can I transfer my ISA to you if I already have your ISA?

Yes, just complete the "Transfer Application Form" (Form C) on its own and send it to us.

How do I transfer?

• You should complete the ISA transfer application (Form C) and send it to us.
• We will forward your request in writing to your existing ISA manager.
• Your existing ISA manager will send a "transfer form" to us, accompanied or followed by the transfer payment. If the payment cannot be sent at the same time, your existing ISA manager will advise us when it will be sent.
• When we receive the money from the existing ISA manager we will send you a certificate showing your benefits.