The context

Confidentially, we are planning to replace our Regular Savings Plan (RSP) and the Options ISA (OISA) with a new ISA product: the Police Mutual ISA, which offers exciting benefits and features.

To be clear, existing RSP and Options ISA policies are not affected by these product changes. The guarantee on existing RSP policies and the Options ISA protected growth option will remain in place. We will manage these policies until the end of their terms or until the customer closes the product.

Why are we making these changes?

We have seen a proportion of customers surrendering their RSPs before the maturity date, and a lower take-up of RSPs from new recruits, compared to previous years. This suggests a new product would be beneficial, which is why we are launching the Police Mutual ISA. In addition, due to the tax benefits they provide, ISAs are one of the most common ways of saving in the UK. However, the Police Mutual ISA will not provide (or charge for) guarantees.

As you know, we have a proud heritage of providing regular savings products to enhance the financial wellbeing of our customers and with our flagship new product, we will continue to do this.

Customer needs have evolved over the years, as has the market, and we want to modernise and create what we hope will be a more contemporary proposition.

When are the changes happening?

We continued to promote the RSP and Options ISA while we developed the launch plan for the new Police Mutual ISA. We stopped accepting new Options ISA applications on 17 August. Options ISA applications in the pipeline will continue to be processed and policies will be issued up to and including 30 September. We will stop promoting the RSP and accepting applications via face to face, outbound telephone and paper channels at the end of August. We will stop accepting applications via web and inbound telephone on 14 September, and will stop issuing new RSP policies at the end of September.

We will start to promote the Police Mutual ISA from early September, and formally launch it on 1st October.

Introducing our new Police Mutual ISA

• Our Police Mutual ISA will be the way you save with Police Mutual
• It will bring lots of exciting benefits and features:
  • Just like the Regular Savings Plan, the Police Mutual ISA helps you save money for your future
  • In the current tax year, you can save up to £20,000 in your Police Mutual ISA - either by saving regularly, or by making lump sum investments, or both
  • If you want to save regularly, you can set up a Direct Debit for as little as £30 a month, the equivalent of just £1 a day. Once you’ve set it up, you can forget it, knowing that each month you’re topping up your ISA and investing in your future
  • Making lump sum investments is easy too. You can start saving with a lump sum of just £100, then choose how often you top up your ISA
  • There’s also the option to do both: save regularly and top up with a lump sum
  • You can add money and start, change or stop a monthly amount at any time
  • The Police Mutual ISA is a stocks and shares ISA, which makes it a good choice if you’re looking to save for at least five years, but there’s no fixed term
  • You can withdraw some or all of your money at any time (subject to a minimum withdrawal of £50), without charge, and there is no tax to pay if you do. Following a withdrawal, a minimum amount of £100 must be left in your Police Mutual ISA
  • In the unfortunate event that you die, if you have a Police Mutual ISA we’ll pay a lump sum of 101% of the current value of your ISA, normally to your estate
  • We will be offering an incentive of a £25 gift voucher for each new Police Mutual ISA taken out

• Other points to consider:
  • The minimum regular savings premium for the Police Mutual ISA will be £30 per month, which is very slightly lower than the RSP (£30.33) and lower than the Options ISA (£40)
  • The Police Mutual ISA will enable customers to save regularly via Direct Debit. There will be no option to save via salary deduction in the short term, as the product will be built on an existing system that does not support this option currently. We do recognise that paying by salary deduction is important to our customers and will look to offer this in the future
  • The Police Mutual ISA doesn’t provide a guaranteed minimum pay-out like the Regular Savings Plan did, although this also means Police Mutual ISA policyholders do not have to pay for that guarantee. This makes the product cheaper and means our charges won’t erode investment returns as much as they do for the Regular Savings Plan. Ultimately, that means the policyholder should get better returns, subject to fund performance
  • Any growth in the value of your Police Mutual ISA is dependent on the performance of the fund that your money is invested in. This means its value can go down as well as up and, as with any investment, there is a chance you will get back less than you originally invested

The launch

As mentioned, we will begin promoting our new ISA to customers and prospective customers from early September, when it will be available for customers to register interest. The product goes live on 1^st October, which is when the first policies will be written.

All of our products constantly evolve, and this change is another example of this evolution. Throughout our long history, we’ve looked for new ways to refine the products we offer – to ensure we’re always offering good value. This new way to save regularly will continue that tradition.