Most people are aware of ISAs and their tax advantages but there is also another tax free way to save as the UK government  lets you invest up to £25 a month tax-free with a friendly society. Below are the details.

Tax Free Bonds

As mentioned above the UK government allows you to save £25 per month in certain products with a friendly society tax FREE!!!

An example is the Scottish Bond from Scottish Friendly Assurance.

This is a 10 year savings plan where you pay in £25 per month and at the end of 10 years the lump sum you receive is tax free. Beware though that if you cash the scottish bond in early you might get less than you paid back and if you cash it in within 2 years you will get nothing back so this is designed for those looking for long term tax free savings and not for the short term.

The Scottish bond from Scottish Friendly Assurance is available to those aged 16-55 and the money you invest in it is invested in the Scottish Friendly With-Profits fund. As part of the government tax free requirements it also includes some life insurance at no extra cost.

Examples of the life insurance values @08/04/2010 are for
someone aged 50 investing £25 per month £2534
someone aged 55 investing £25 per month £2472

You will also get £15 of Marks & Spencer vouchers Free as a welcome gift from Scottish Friendly Assurance when you invest in a Scottish tax free bond.


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Scottish Friendly has roots stretching back to 1862 and today Scottish Friendly has over 500,000 policyholders and has assets under management of over £830 million as at December 2009. As a mutual society, they have no shareholders, so profits are distributed among their with profits policyholders in the form of bonuses.