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Key Features
- Tax-Exempt Savings Plans
- Aims, Commitment & Risks
- Questions and Answers
- Other Information
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Online Application
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Application Forms
- Application Form for serving London Officers/Staff (95KB)
- Application Form for all other applicants (121KB)
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Personal Illustrations
- Personal Illustration
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Additional Information
- How We Manage the With-Profit Fund
- Direct Debit Mandate Form...
- Contact us for further information
Questions and Answers
Why should I read this document?
The Financial Services Authority is the independent financial services regulator. It requires us, the Metropolitan Police Friendly Society, to give you this important information to help you decide if either of the metfriendly Tax-Exempt Savings Plans is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference.
We want you to be comfortable that you understand the 'Key Features' of these products before you decide to proceed. If you do not understand something in this document, please feel free to contact us.
What are metfriendly Savers' Tax-Exempt Plans?
They are tax-efficient savings plans for regular monthly saving, designed to shield your savings from income and capital gains taxes.
Who can take out a metfriendly Tax-Exempt Savings Plan?
You must be a UK resident aged 18 or over, and you must work or have worked in the police service, or be the partner or close relative of such a person. The plans have to be taken out before age 50 (55 for non-smokers), although you can still take out a Whole Life Plan up to age 60 (65 for non-smokers) for a reduced Sum Assured (see 'Can I choose how long to save for?' ).
We also have a tax-exempt plan for children under the age of 15 called the Children's Plan.
How flexible are they?
Once the plan has started, the premium and term are fixed and cannot be altered. However, if you stop paying the premium the plan will cease and a "surrender value" will become payable (see below).
When can I take money out?
When the Endowment Plan reaches the end of its chosen term you will receive the maturity value.
Under the Whole Life Plan premiums cease after 10 years, and you are given the option to take the value at that point or leave the money invested to grow. You can then request a "surrender value" whenever you choose, as below.
If necessary, you can cash-in either plan at any time for a "surrender value". You can only cash in a plan completely - we will not permit part surrenders. We need to allow for investment performance, so any illustrated surrender values are not guaranteed.
On taking money out of either plan there may be tax implications (see 'Will I lose my tax benefits?')
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 (which must be in your name) where we should pay your money.
Please contact us for more details.
How do the metfriendly Tax-Exempt Savings Plans work?
- You invest a regular monthly premium (£25) with the Society.
- These are life assurance plans and they have a death benefit, the Sum Assured (which has to meet the requirement of tax legislation).
- The Sum Assured is based on the term you choose.
- Your money is invested in our with-profits fund.
- At the end of each calendar year, we add a bonus to the Sum Assured and send you a bonus notice.
- Once added, that bonus is a permanent addition to your investment with us.
- Bonuses are compounded, so in subsequent years you earn bonuses on the bonuses.
- The Sum Assured and bonuses are payable at maturity or earlier death.
- The Endowment Plan can have any term between 10 and 35 years fixed at outset (depending on your age - see 'Can I choose how long to save for?' ).
- The Whole Life Plan has a premium payment term of 10 years. On the tenth anniversary you have the option to take the value or leave the accumulated funds invested with the Society where it will to continue to attract bonuses.
- We also normally add a final bonus when the benefit is paid.
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. As an example the list below shows the approximate "mix" on the 31 December 2010. For more information on how the with-profits fund works, please refer to "How we manage the with-profits fund".
- Equities 40%
- Government Bonds 27%
- Corporate Bonds 19%
- Commercial Property 9%
- 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. (See "How do you work out what the final bonus should be?)".
What happens if the stockmarket falls?
The with-profits fund is invested in a mix of equities, commercial property, government bonds, corporate bonds and cash (see list above), and by spreading the fund between the various investments the Society is not dependent on one market. For instance, if the value of the stockmarket were to go down but other investments go up, then the effect would be that one counteracts out the other.
How do I apply for a metfriendly Tax-Exempt Savings Plan?
Applications can be initiated online using one of the following forms: Whole Life Plan or Endowment Plan .
If you prefer, you can call us and complete a telephone application.
Application Forms can also be downloaded in pdf format. Please make sure you fill in the appropriate application form (Form A - for currently serving MPS or City of London Police Officers or Police Staff ONLY, Form B - for all other applicants including volunteers, retired police officers and all partners and relatives) remembering to complete the appropriate box for the plan you require. For new members Form B should be accompanied by reasonable proof of identity (copy of your Birth Certificate, Driving Licence or Passport) and of address (copy of a recent utility bill). Send it to us with your payment instructions.
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 will be for their benefit. Any partner's policy paid for in this way legally belongs to that partner. It will be their tax status on encashment that determines whether there is any tax to pay at that time, and any payments will be made to them.
If you are a volunteer, retired, or a relative, or simply wish to pay by direct debit, please also complete a direct debit form (unless you already pay this way) and return it to us, not your bank.
What happens to my plan if I die?
The value of your plan including any bonuses added will be payable to your estate. This sum will not be less than the Sum Assured.
What might I get back?
An example - What you might get back after 10 years for a regular monthly premium of £25:
- If investments grew at 4.0% a year - you would get back £3,300
- If investments grew at 6.0% a year - you would get back £3,660
- If investments grew at 8.0% a year - you would get back £4,060
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 | £300 | £34 | £275 |
| 2 | £600 | £62 | £575 |
| 3 | £900 | £84 | £900 |
| 4 | £1,200 | £152 | £1,200 |
| 5 | £1,500 | £187 | £1,550 |
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 | £3,000 | £409 | £3,660 |
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 £409.
- This would have the same effect as bringing down the investment growth from 6.0% a year to 4.1%.
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.
How much will it cost for advice?
- metfriendly does not make any form of commission or incentive payments.
- The cost of providing verbal or written information about these plans is included in the Society's overall expenses.
Are there limits on premiums?
You and your partner are each limited to £25 per month in these plans, and that includes tax-exempt contracts with other Friendly Societies. If you want to save more, see our 10 Year Plus Savings Plans, or our Investment ISA.
Can I choose how long to save for?
The Endowment Plan can have any term between 10 and 35 years, but has to mature before age 60 (65 for non-smokers). We illustrate a term
of 10 years, but will provide you with a personal illustration based on the term you prefer.
You can only contribute to a Whole Life Plan for 10 years, but your accumulated investment can remain invested for as long as you wish.
Additionally, the Whole Life Plan has to be taken out before age 50 (55 for non-smokers) to secure the illustrated Sum Assured, but you can still
take out a plan up to age 60 (65 for non-smokers) for a reduced Sum Assured - about 5% lower than illustrated. Again you will receive a
personal illustration that reflects your own circumstances.
What about tax?
There is no liability for Income or Capital Gains Tax at the chosen maturity date, nor on any payment if the plan has been running for at least 10 years
(or 3/4 of its original term if less). However, there may be a
liability for income tax on early surrender. (See 'Will I lose my tax benefits?').
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. (See "What are bonuses?)".
Can I leave my money with you at the end of the term?
The Whole Life Plan has a premium term of 10 years and is the more
flexible way of saving for this term, as you can choose to cash it in after
10 years or let it continue to attract bonuses - at a higher rate.
The
Endowment Plan pays out on the chosen date and cannot be left to grow,
although you will have the option of reinvesting the proceeds in one of
the Society's lump sum investment products.
Can I cash in before the end of the term?
Plans can be cashed in for a
surrender value. You can only cash in
a plan completely - we will not permit
part surrenders.
Once you have been paying premiums for
5 years, the surrender value will usually
exceed what you have paid in - but it
could be less in the early years. The
surrender value reflects our investment
return over the period of your savings.
Normally, it will only be slightly less than
if you had originally chosen an
Endowment Plan for the actual term to
the date of surrender - the difference
reflecting our costs including the life
cover you will have enjoyed.
Will I lose my tax benefits?
There may be a liability to income tax on early surrenders - currently this
is levied at the highest rate of income tax you pay, on the gain you
make. This tax charge only applies in the first 10 years (or 3/4 of the term
originally chosen if this is less, on the Endowment Plan ).
Is it suitable for me?
If you are unsure as to the suitability of these products, and wish to
obtain personal advice, you should contact an independent financial
adviser.
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.
The Endowment Plan can have any term between 10 and 35 years, but has to mature before age 60 (65 for non-smokers). We illustrate a term of 10 years, but will provide you with a personal illustration based on the term you prefer.
You can only contribute to a Whole Life Plan for 10 years, but your accumulated investment can remain invested for as long as you wish.
Additionally, the Whole Life Plan has to be taken out before age 50 (55 for non-smokers) to secure the illustrated Sum Assured, but you can still
take out a plan up to age 60 (65 for non-smokers) for a reduced Sum Assured - about 5% lower than illustrated. Again you will receive a
personal illustration that reflects your own circumstances.
What about tax?
There is no liability for Income or Capital Gains Tax at the chosen maturity date, nor on any payment if the plan has been running for at least 10 years (or 3/4 of its original term if less). However, there may be a liability for income tax on early surrender. (See 'Will I lose my tax benefits?').
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. (See "What are bonuses?)".
Can I leave my money with you at the end of the term?
The Whole Life Plan has a premium term of 10 years and is the more flexible way of saving for this term, as you can choose to cash it in after 10 years or let it continue to attract bonuses - at a higher rate.
The Endowment Plan pays out on the chosen date and cannot be left to grow, although you will have the option of reinvesting the proceeds in one of the Society's lump sum investment products.
Can I cash in before the end of the term?
Plans can be cashed in for a surrender value. You can only cash in a plan completely - we will not permit part surrenders.
Once you have been paying premiums for 5 years, the surrender value will usually exceed what you have paid in - but it could be less in the early years. The surrender value reflects our investment return over the period of your savings. Normally, it will only be slightly less than if you had originally chosen an Endowment Plan for the actual term to the date of surrender - the difference reflecting our costs including the life cover you will have enjoyed.
Will I lose my tax benefits?
There may be a liability to income tax on early surrenders - currently this
is levied at the highest rate of income tax you pay, on the gain you
make. This tax charge only applies in the first 10 years (or 3/4 of the term
originally chosen if this is less, on the Endowment Plan ).
Is it suitable for me?
If you are unsure as to the suitability of these products, and wish to
obtain personal advice, you should contact an independent financial
adviser.
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.
There may be a liability to income tax on early surrenders - currently this is levied at the highest rate of income tax you pay, on the gain you make. This tax charge only applies in the first 10 years (or 3/4 of the term originally chosen if this is less, on the Endowment Plan ).
Is it suitable for me?
If you are unsure as to the suitability of these products, and wish to obtain personal advice, you should contact an independent financial adviser.