What are Regular Premium Savings?

Regular Premium Savings cover a range of savings products available from Life Assurance (Life Office) and Friendly Societies.

Usually regular premium savings are monthly contributions or premiums from your source of income transferred into your savings plan.

In the context of financial planning, regular premium savings are primarily investment vehicles which are savings for the future and depending upon your personal objectives, growth performance requirements, risk and tax profile and affordability, some regular premium savings products will be more suitable than others.

 

What types of Regular Premium Savings are available as Long Term Investments?

Long term investments are a form of saving for the future. Typically they will include:-

  • Life Assurance Savings Plans: Available as unit-linked savings plans, maximum investment plans, endowment or whole of life plans they attract regular contributions and build up funds on a pound cost averaging which buy units on regular basis in a selection of investments such as commercial property, fixed interest securities, equities, international funds and cash. Provided they maintain their status as a qualifying policy, they are free of capital gains and income tax on maturity or early encashment (under the rules). Additionally Life cover is provided regardless of whether it is required or not.
  • Friendly Society Policies: Regular contributions or premiums can be made into Friendly Society savings plans. Similar to Life Assurance Savings Plans contributions need to be made for a minimum period before providing a capital sum, which after charges can be less than the amount invested if not left until maturity. Provided encashment is not made before maturity these funds are also free from capital gains and income tax.

Why should I make contributions to Regular Premium Savings?

The major reasons for recommending regular savings are the tax exemptions available on encashment or maturity of qualifying policies.

Nevertheless, there are certain contribution limits and fund charges applicable which are specific to each of the regular premium savings plans which must be considered, together with their historical and expected performance of the funds (return on investment) on maturity and the implications of early encashment, fund transfers or stopping contributions.

 

How do I make contributions to Regular Premium Savings?

The first and most important step after you have decided you may want to make contributions to a regular premium savings plan is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable type of regular premium savings plan is for your particular circumstances we make an application on your behalf to make regular contributions into a selected fund based on how much you can afford your personal tax situation and the amount of fund required at maturity, at the acceptable level of risk you are prepared to take to match your needs.

 

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to read the articles and associated links from the Financial Services Authority by accessing the following website at http://www.moneymadeclear.fsa.gov.uk/products/investments/types/pooled/life_assurance_investments.html