Early Bird ISAs

It is that time of the season in the financial year again – ISA time. We are contacting you because you have contributed to ISAs on a regular basis in the past but have not done so yet this year. We could attach lots of documents for you to read now but to make things easy we have broken this down into Five Easy Steps:

5steps1

Why wait until the current tax year draws to a close on 5 April 2011 to utilise your ISA allowance.

With the prospect of rising taxes in some form in the coming months what better time than now to protect your excess income and savings from the taxman by contributing to a 2010/11 ISA which is free from income tax and capital gains tax!

ISA contribution rules have changed and in summary these are noted below:

ISA allowance has increased to £10,200 for everyone in the current tax year.
Up to £5,100 of the allowance can be saved in cash with the balance being saved in a stocks and shares ISA.

If you do have some spare cash it is important to use your ISA allowance. Even if you are nervous about equity markets it is possible to invest in cash funds until you are comfortable to move into equity funds or a blend of asset types.

Next Steps

Fund Choice
Choosing the right investment is key to how your ISA will perform. Which fund is most suitable for you is dependent on your attitude to risk. Your attitude to risk is a measure of the level of risk that you are comfortable with and it is therefore critical that this is correctly established before any decision is made. It is important to understand the relationship between risk and reward, typically the greater the risk, the greater the potential losses or returns may be and vice versa.

Definitions of our risk categories can be found in the enclosed document. Please be aware that you are making the assessment of your attitude to risk and fund selection. If you have any doubts as to what level of investment risk you are prepared to take, or require advice, EBS will be happy to discuss this with you.

To help you select an appropriate fund we have noted below funds which we are happy for you to invest at the level of your attitude to risk.

Cautious - Invesco Perpetual Corporate Bond

Cautious to Balanced - Investec Cautious Managed

Balanced - Neptune Balanced

Balanced to Adventurous - M&G Recovery

Adventurous -M&G Global Basics

A few things you should know before applying

• Past performance is no guarantee of future returns.

• The value of your investment and any income derived can fall as well as rise.

• The value of your investment is not guaranteed and on encashment you may not get back the full amount invested.

• The favourable tax treatment of ISA’s may not be maintained in the future.

• The sterling value of overseas assets in these funds may also rise and fall as a result of exchange rate fluctuations.

Charges

For recommending and arranging the above investments EBS will receive an initial commission payment from FundsNetwork of £306 for each £10,200. In addition to this EBS will receive an annual renewal commission of 0.5% of the value of the investment. For example if the investment is worth £10,000 Employee Benefit Solutions Ltd will receive £50 per annum.

Full details of all charges can be found in the Key Features Document (available upon request) and Fund Factsheet.

How to Invest

To invest, simply write the fund you would like to invest in and your subscription amount on the enclosed application form, sign it, and return it to EBS together with your cheque(s).

This summary guide should be read in conjunction with the Fund Factsheets and our Guide to ISAs which are available from the links below.

M&G Global Basics Fund

M&G High Interest Fund

M&G Recovery Fund

Newton Balanced

For further information please contact EBS.