Prudential ISA
A guide to the
Prudential ISA
Your questions answered
The Prudential ISA combines tax-efficient investment with access to the unique range of PruFund funds.
About the Prudential ISA
Capita Financial Investments Limited is the ISA Plan Manager to
the Prudential ISA. Capita Financial Investments Limited is
responsible for all regulatory and legal aspects of the ISA and the
provision of all customer services.
> investment in Open-Ended Investment Companies (OEICs)
The Prudential ISA has two elements:
You can choose to invest in one or both elements of the
Prudential ISA.
through a range of OEIC funds for which Capita and its
associated group company Capita Financial Managers Limited
are responsible.
> investment in a life insurance policy which allows access to the
PruFund Funds (the Life Insurance Policy) for which Prudential
is responsible, and
Please contact Capita if you have any questions about the
Prudential ISA. Their details are shown in the 'How to contact
Capita' section on page 7.
What does the Prudential ISA offer?
The Prudential ISA is a Stocks and Shares ISA suitable for medium to long-term investment, offering:
> Tax-efficient growth – you have no Income or Capital Gains
Tax to pay on growth within the ISA
> The PruFund range of funds – these funds, available only
from Prudential, aim to grow your money over the medium
to long term, while helping to protect you from some of the
short-term ups and downs of direct stockmarket investments
by using a unique smoothing process
> A range of OEIC funds – designed to meet different
investment objectives and attitudes to risk
> Easy access to your money – with regular and one-off
withdrawals to meet your needs*
> Invest from as little as £50 each month – the minimum
single investment is £500, the minimum monthly payment is £50
> Freedom to transfer – you can transfer your existing Cash ISA
or Stocks and Shares ISA to the Prudential ISA.
* You will reduce the value of your ISA each time you withdraw
money. Ongoing Adviser charges that you arrange to have
deducted from your ISA will have a similar effect. If
withdrawals are more than any overall growth achieved from
your ISA, the value of your ISA will reduce below the level of
the original investment. For full or partial withdrawals out of the
PruFund range, including ISA transfers, there may be a 14-day
waiting period.
Please be aware of the risks
Please remember that the value of your investment can go down as well as up. What you get back depends on the
assets you choose to invest in within your ISA, for how long you have invested and how they perform. It may mean
you will not get back the full amount of your investment.
02 A Guide to the Prudential ISA
A Stocks and Shares ISA is a way of sheltering your money from tax. It is a tax-efficient investment wrapper in which
you hold a range of investments, including funds which invest in equities (shares), property shares, and even cash.
These are known as multi-asset funds.
What types of ISAs are available?
There are two types of ISA:
How much can I invest in the Prudential ISA?
> Cash ISAs – a bit like a savings account from a bank or building
You can invest up to £15,240 in the tax year 2015/2016.
society. This is suitable for savings over any period and normally
money can be taken out easily.
> Stocks and Shares ISAs – can be a good way of entering the
stockmarket. This is more suitable for longer-term saving.
ISA products are tax efficient as you pay no Income Tax or
Capital Gains Tax on any growth within the ISA.
The value of an investment can go down as well as up and the
value in the future may be less than the amount invested. For the
range of PruFund funds, what you receive will depend on the
value of the underlying investments, the Expected Growth Rates
as set by the Prudential Directors, our charges, the smoothing
process and when you take your money out.
The Prudential ISA is a Stocks and Shares ISA. Prudential does not
offer a Cash ISA, which is usually more secure than a Stocks and
Shares ISA but tends to offer less potential for higher returns over
the medium to long term.
The tax year runs from 6 April to 5 April the following year.
You can put money in and take it out whenever you want and
you don’t even have to declare an ISA on your tax return.
However, you can only ever pay up to a maximum subscription
allowance in any one tax year, even if you have taken money out
during the same tax year.
This information is based on our understanding, as at
May 2015, of current taxation, legislation and HM Revenue &
Customs practice, all of which is subject to change without
notice. The impact of taxation (and any tax reliefs) depends on
individual circumstances.
Can I transfer my existing ISA investments to the
Prudential ISA?
You can transfer any previous tax years’ Cash ISAs or Stocks and
Shares ISAs from other providers to the Prudential ISA and invest
the transfer amount into the range of funds available.
Transferring to a Prudential ISA is straightforward. Your Financial
Adviser will help you complete the forms. You could transfer your
existing ISA to the Prudential ISA without affecting the current
year’s subscription limits (£15,240 for the tax year 2015/2016).
There is currently no charge for transferring your ISA to the
Prudential ISA, however your existing ISA Manager may charge
you for any transfer and your adviser may charge you for any advice
provided. Please speak to your existing ISA provider for more
information. You may also lose out on any growth in value during
the period when the transfer is taking place.
You don't have to declare any ISAs on your tax return.
A Guide to the Prudential ISA 03
You will pay no Income Tax on the interest generated by bond funds held within an ISA.
Which funds can I invest in?
A selection of funds is available within the Prudential ISA:
Prudential’s PruFund fund range
> PruFund range of funds
If you are considering an investment that combines the benefits
of diversification together with the advantages of smoothing,
the unique PruFund range of funds may be a potential solution
for you.
> CF Prudential Investment Funds (1)
PruFund range of funds – combining diversification
and smoothing
What is diversification?
For many investors, the volatility which can result from investing
in a single asset type (such as shares) would be unacceptable.
At the same time, investors are looking to achieve returns that
offer the potential to outstrip inflation. Therefore, many choose to
spread their money over a variety of asset types. This is called
diversification. By diversifying your investments, you can
potentially gain some exposure to higher-performing asset types
without the risks of “putting all your eggs in one basket”.
What is a smoothed fund and how can it help
investors?
Smoothed funds aim to protect you against some of the shortterm ups and downs associated with investing directly in the
stockmarket. They use 'smoothing' mechanisms to provide a
smoothed return over the medium to long term with the aim of
providing some protection from market volatility.
The PruFund funds invest in many different types of investments
and asset types including UK and international shares (equities),
cash, property and fixed investment securities such as bonds. By
spreading and diversifying your investment across these assets,
we can help to reduce the risk of extreme ups and downs that you
may get with any single asset type.
We publish full details of the current asset mix for all PruFund
funds on www.pru.co.uk.
The following PruFund range of funds are available via a life
assurance policy provided by Prudential:
> PruFund 0-30 Fund
> PruFund 10-40 Fund
> PruFund 20-55 Fund
> PruFund 40-80 Fund
> PruFund Cautious Fund
> PruFund Growth Fund.
If you die, the life insurance policy will pay out 100.1% of the
value of your investment.
04 A Guide to the Prudential ISA
There is no Capital Gains Tax to pay on any profits made by your ISA investments increasing in value.
Like most stockmarket-based investments, the value of the
assets into which the PruFund funds invest changes each day,
sometimes increasing, sometimes decreasing. The PruFund funds
aim to reduce the impact of these movements over the short term
by using a unique smoothing process.
For more information on the PruFund range of funds’ objectives
and charges please refer to the Fund Guide – Prudential ISA
PruFund Funds, available from your Adviser.
OEIC Funds
A range of Open Ended Investment Company (OEIC) funds is also
available as a fund choice within the Prudential ISA.
The OEIC funds are operated by Capita Financial Managers
Limited who is legally responsible for the funds, including all
servicing and administration of the funds.
The OEIC funds are designed to meet different investment
objectives and match different attitudes to risk.
The following OEIC funds are available within the Prudential ISA:
>
>
>
>
>
>
>
>
>
>
CF Prudential Dynamic 0-30 Portfolio
CF Prudential Dynamic 10-40 Portfolio
CF Prudential Dynamic 20-55 Portfolio
CF Prudential Dynamic 40-80 Portfolio
CF Prudential Dynamic 60-100 Portfolio
CF Prudential Dynamic Focused 0-30 Portfolio
CF Prudential Dynamic Focused 10-40 Portfolio
CF Prudential Dynamic Focused 20-55 Portfolio
CF Prudential Dynamic Focused 40-80 Portfolio
CF Prudential Dynamic Focused 60-100 Portfolio
For more details on the OEIC fund objectives and charges,
please refer to the Key Investor Information Document for each
fund available from your Adviser and on the Capita Financial
website www.capitafinancial.co.uk
A Guide to the Prudential ISA 05
Important information about your Prudential ISA
Accessing your money
Adding to your investment
Should you want to take money out of your Prudential ISA, either
on a regular basis or as a one-off lump sum, it is easy to arrange.
Taking lump sums and regular withdrawals is only allowed if the
ISA value after the withdrawal meets our minimum value limit of
£500 for each fund. For further details, refer to the Key Features
document, available from your Adviser.
You can add to your investment at any time, from a minimum lump
sum of £250. Regular savings can be increased by any amount
subject to a minimum of an additional £5 each month.
Any lump sum additions or regular saving increases are subject to
ISA annual subscription limits.
Taking out lump sums
Paying your Adviser through your Prudential ISA
You can cash in part of your Prudential ISA at any time, subject to
a minimum of £250.
Taking regular withdrawals
You can choose to have regular payments from your ISA every
month, three months, six months or every year. The minimum
regular withdrawal is £50 on each occasion for each fund that you
are invested in. The maximum annual limit for regular withdrawals
is 7.5% of the value of the ISA.
06 A Guide to the Prudential ISA
You and your Financial Adviser will agree the charge for giving you
financial advice. Some or all of these charges can be paid on your
behalf from the payment you send us and/or from your investment.
More information
This guide is for information only. If you are considering an investment in the Prudential ISA you should seek advice from your
Financial Adviser and read the following important documents:
> Prudential ISA Terms and Conditions
> Key Features of the Life Insurance Policy within the Prudential Individual Savings Account (ISA)
> Fund Guide – Prudential ISA PruFund Funds
> Example Illustrations for Investment in the Prudential ISA and CF Prudential OEIC Funds
> Master Insurance Agreement – Customer Version
> Your With-Profits Plan – a guide to how we manage the fund (PruFund range of funds)
> Key Investor Information Document(s)
These are available from your Adviser.
How to contact Capita
Write to Capita at:
Capita Financial Investments Limited,
2 The Boulevard,
City West One,
Office Park,
Gelderd Road,
Leeds LS12 6NT.
Phone Capita on: 0844 335 8936, 8:30am to 5:30pm Monday to Friday (excluding Bank Holidays)
Email the Capita Customer Services team at: [email protected]
A Guide to the Prudential ISA 07
ISAB10082 08/2015
www.pru.co.uk