Questions about your bonus or statement? We can help.
We understand that our members are keen to find out how their plans are performing, including details of any bonuses that they may be due to receive. This means that many of you get in touch with us around the time that bonuses and statements are released with questions you might have.
We thought it might be helpful to pull together some of the most frequent questions you ask and put them all in one place for you. That way, if you have a question about your bonus or statement, you can get an answer instantly.
Of course, if you can’t find the information you are looking for below, please do feel free to contact our Member Services team, who will be more than happy to help. You can reach them through our online support form: shepherdsfriendly.co.uk/help-and-support/. Also, if there’s anything you think we’ve missed, please let us know and we can add this to the FAQs (Frequently Asked Questions) below.
Bonus and Annual Statement FAQs:
What is changing with my bonus in 2024?
For our Stocks and Shares ISA and Junior ISA plans from 1st January 2024, we’ll now be paying your bonuses quarterly (every three months) rather than annually. This means that you will receive more regular updates on how your investment is performing.
What will my bonus be?
In April 2024, your first bonus will be paid to you for the period between 1st January and 31st March, which will be based on 4.75% AER (Annual Equivalent Rate).
You will then receive your next bonus in July, followed by October, and then January 2025.
Please remember that this rate can change from quarter to quarter depending on the performance of investments.
What does the term Annual Equivalent Rate (AER) mean?
AER (Annual Equivalent Rate) is a type of interest rate for savings accounts and is used to show you what you could earn from your investment plan over the year. It illustrates what the interest rate would be if interest was paid and compounded once each year. The amount of AER is based on investment performance and is therefore subject to change throughout the year.
How can I see my bonus and statement?
You can view your bonus and statement online. All you need to do is log in to your account. You can easily register an online account by visiting our website: shepherdsfriendly.co.uk/your-account/register. If you still need some help with this, our Member Services team will be happy to guide you through this process.
How does the bonus work compared to cash or other stocks and Shares ISAs?
Our With-Profits fund is primarily invested in the Multi Assets Strategies Fund (MAST), which is managed by Royal London Asset Management (RLAM). This fund aims to achieve steady growth over the long-term, at a rate that outperforms cash savings accounts, but carries less risk and reward potential than some other investment funds, giving our members a smoother investment journey, if they invest for the long-term.
Our fund therefore differs from other accounts in the following ways:
Cash ISAs
Cash ISAs usually receive tax-exempt interest payments, which may be fixed or variable, depending on the individual account. The money is not invested in asset classes such as stocks and shares, property or bonds, meaning that there is no risk of receiving back less than you paid in. However, the growth potential in these accounts is typically lower as a result of this.
Unit-Linked Stocks & Shares ISAs
Unit-linked investments are directly invested in assets in a similar way to our With-Profits fund. However, the key difference between the two is that unit-linked investments will fluctuate on a daily basis, meaning investors may experience higher levels of volatility. Our With-Profits fund uses an investment strategy known as ‘smoothing’, which aims to reduce the peaks and troughs of investing by calculating the performance of the investments over a calendar year, before announcing the value of any bonuses. In some years, we may hold back profits from periods of strong performance in order to pay a bonus in years of poor investment performance, meaning that members should have a more stable investment journey.
However, it is important to remember that, when you withdraw any money from your plan, we will calculate the value of the investments that you hold within the With-Profits fund to ensure that you leave with your fair share. This may mean that:
- If you have been invested through periods of strong investment performance, you might get a final bonus;
- If you have been invested through periods of poor investment performance, and you leave the fund, you may get back less than the current value of your plan. This is called a Market Value Reduction (MVR).
However, this does not apply to plans that are maturing. When your plan matures, we guarantee that you will get back all of your payments into the plan plus any bonuses that have been paid in the past.
How do we invest your money?
Shepherds’ Friendly investments are primarily placed into one of two funds managed by Royal London Asset Management (RLAM). Our responsible ISA and JISA plans invest in the ‘Multi Assets Strategies Fund’ (MAST) and the Sustainable ISA and Sustainable JISA invest in the ‘Sustainable Diversified Trust Fund’ (SDTF). Both funds invest in a diverse mixture of asset classes including stocks and shares, gilts, bonds and cash.
The overall aim of the funds is to provide a better return than a cash account, but with a medium to low level of investment risk. However, it is important to remember that all investments do carry risk, and you may get back less than you pay in.