Key Features of the Capital Investment Bond (Series 2) Additional Investments

Transcription

1 Key Features of the Capital Investment Bond (Series 2) Additional Investments Please read this document along with your personal illustration (if you have one) before you decide to make additional payments to your bond. It's important you understand how Capital Investment Bond (Series 2) Additional Investments works, the benefits and associated risks.

2 Welcome Contents About the Capital Investment Bond (Series 2) Additional Investments 3 Its aims 3 Your commitment 3 Risks 3 Other documents you should consider reading 4 Questions & Answers 5 How does my additional investment work? 5 Who can make an additional investment? 5 Where do you invest my money? 5 How much of my additional investment is invested? 5 Do I have access to my capital? 5 What benefits are paid if I die? 5 How do I keep track of my investment? 6 What about tax? 6 Inheritance Tax 6 What are the charges? 6 Stopping your bond 8 What happens if I move overseas? 8 Can I change my mind? 8 Other information 9 How to contact us 11 We would like everyone to find it easy to deal with us. Please let us know if you need information about our plans and services in a different format. All our literature is available in audio, large print or braille versions. If you would like one of these please contact us using the details on page 11. The Financial Conduct Authority is a financial services regulator. It requires us, Prudential, to give you this important information to help you decide whether our Capital Investment Bond (Series 2) Additional Investments is right for you. You should read this document carefully so that you understand what you are buying, then keep it safe for future reference. 2 Key Features of the Capital Investment Bond (Series 2) Additional Investments

3 About the Capital Investment Bond (Series 2) Additional Investments The Capital Investment Bond (Series 2) is an investment bond which enables you to invest in a range of investments with the potential for growth. It allows you to take tax-efficient withdrawals, while providing an element of life cover. If you still have questions after reading this booklet, your Financial Adviser should be able to help. Alternatively, you can call us on Your Financial Adviser may charge you for any advice given. Its aims What this bond is designed to do To give the potential for long-term capital growth for your investment. Your commitment What we ask you to do You invest an additional amount into your Capital Investment Bond. Further amounts can also be added to your bond at a later date. Risks What you need to be aware of Your additional investment may not grow at the rate you anticipate or at a rate detailed on the enclosed illustration. What you will get back will depend mainly on our investment performance. The value of your bond can go down as well as up and may even fall below the amount you invested what you get back is not guaranteed. If the total charges taken from your bond are more than any overall growth achieved, your bond will fall in value, possibly to even less than you have invested. Our charges may vary in the future and may be higher than they are now. Further details can be found in the "Rules for Capital Investment Bond Policy (Second Series)". Where withdrawals from the bond exceed any growth achieved by your investments, your capital will be eroded. If you exercise your right to cancel within 30 days, the amount of your additional investment refunded will be reduced by a proportionate amount if the value of your investment has fallen. We take most of our charges in the early years of this investment. This means that if you withdraw during this time you may get back less than you invested. Some of our funds invest in property and land. This can be difficult to sell so you may not be able to sell/cash in this investment when you want to. We may have to delay acting on your instructions to sell your investment. You should look upon your investment in such funds as being long term. There are large costs when we buy and sell property. The allowance for these costs amongst other factors can lead to short term falls in the price of units in such funds. The value of property and land is generally a matter of a valuer's opinion rather than fact. Under certain circumstances, in the interest of other investors, we reserve the right to defer any early encashment or switch between funds this may be for a period of up to six months for unit-linked funds that mainly invest in property and land, and up to one month for all other funds. We may apply a delay to regular withdrawals in the same way but only if the amount of the regular withdrawal each year is more than 5% of your total investment. This is in exceptional circumstances and if this applies to you, we will let you know. Key Features of the Capital Investment Bond (Series 2) Additional Investments 3

4 Other documents you should consider reading This document gives you key information about the Capital Investment Bond (Series 2) Additional Investments. If you want more detail on specific points, please read the following documents. We have highlighted when they are relevant throughout this document. They are all available from your adviser or direct from us. Our contact details are on page 11. Rules for Capital Investment Bond Policy (Second Series) and schedule Together, these give you the full terms and conditions of the contract. Fund Guide A guide to Prudential's life funds (ex Scottish Amicable) This provides information about our Unit-Linked Funds. Guide to tax on your UK Investment Bond Leaflet Provides information about tax and how it affects you. Your Personal Illustration 4 Key Features of the Capital Investment Bond (Series 2) Additional Investments

5 Questions & Answers How does my additional investment work? You make an additional investment which purchases units in one or more of our Unit-Linked Funds. Who can make an additional investment? Applications are accepted from current Bondholders. Where do you invest my money? The additional investment will be used to purchase units in the same fund(s) as your existing investment. Where the existing investment is held in more than one fund, the additional investment will be split in proportion to the value of units held in each fund. In addition to the normal switching arrangements, the investor will be entitled to a free switch of the entire investment within three months of the additional investment. Your Financial Adviser will provide full details of the funds available to you and will help you select which funds are best suited to your needs. You can invest in more than one fund at a time, up to a maximum of six, and can normally switch funds at any time in the future. The first switch in any 12-month period is free. Subsequent switches are subject to a charge of, currently, 25. If this changes in the future we will let you know. How much of my additional investment is invested? The amount of your money which is used to purchase units depends on the total fund size (including the additional investment) and is shown on the illustration. Do I have access to my capital? Yes, you can fully surrender your bond or make partial withdrawals at any time. A request for partial withdrawals may be refused if the amount of the withdrawal is below 250 or the total value of the units remaining allocated to the bond is less than 500. You can also take regular withdrawals. You specify the amount and frequency of the withdrawal, subject to a minimum of 50 per instalment. On surrender or withdrawal within five years of the first or any additional investment, an encashment charge may be made as detailed in the Deductions section of this document. What benefits are paid if I die? Second Series, Version 1 Plans (Policy Rules ref. U110/11/94 U110/07/95) If the bond is taken out only on your life, on your death we will pay an amount equal to 101% of the bid value of your bond at that time. If the bond is taken out on two lives, the benefit of 101% of the bid value of your bond is paid out on second death. Second Series, Version 2 Plans (Policy Rules ref. U110/01/96 onwards) If the bond is taken out only on your life, on your death we will pay an amount equal to 101% of the encashment value of your bond at that time. If the bond is taken out on two lives, the benefit of 101% of the encashment value is paid out on second death. Key Features of the Capital Investment Bond (Series 2) Additional Investments 5

6 How do I keep track of my investment? We will send you an annual statement of your unit holdings. If, however, you would prefer more frequent information, a statement can be requested at any time free of charge. What about tax? Our investment funds are taxed on the income and gains generated by the funds under the rules governing life assurance companies. You may be liable to an income tax charge on: Death. Full or part surrender of your bond. Alteration. Certain assignments (transfer of ownership) of part or all your bond. Withdrawals in excess of 5% of your investment (in any policy year). Currently, withdrawals of up to 5% each year of your investment can be made without triggering an immediate tax charge. This allowance is available in each of the first 20 years starting with the policy year in which an investment is made and any unused allowance can be carried forward into future years. Certain part assignments may also count towards the 5% tax deferred allowance. If you are a basic rate taxpayer after any gain (investment profit) from your bond is added to your total income, you will have no personal liability to income tax. If you are a higher rate or additional rate tax payer or you become one as a result of a gain being added to your taxable income, you will be liable to a maximum of the difference between higher rate (or additional rate, if applicable) and basic rate income tax on any gain. Gains arising from your Capital Investment Bond may affect your entitlement to personal tax allowances and certain Tax Credits. Further details are available in our "Guide to Tax on Your UK Investment Bond" (reference INVS0002) leaflet, which you may request by calling us on We've based this information on our understanding of current law & HM Revenue and Customs practice. Your individual circumstances and future changes in law and tax practice could affect the amount you pay. For more information please visit visit the HMRC website at or speak to your Financial Adviser. Inheritance Tax Inheritance tax may be payable if you own the plan when you die. Special considerations are given to plans under trust. Please ask your Financial Adviser for more information. What are the charges? Annual Management Charge For Unit-Linked Funds, we deduct an Annual Management Charge from the funds. This charge is already deducted when we work out the full value of your bond. The amount of charge we deduct depends on the funds you choose to invest in and the amount of your original and additional investments. A charge is made on the value of Unit-Linked Funds. This charge varies according to the fund(s) selected, and the current levels are summarised in the table below. Where the funds invest in underlying unit trusts additional expenses will be incurred. In general the AMC is taken by the deduction each day of 1/365th of the applicable Annual Management Charge, from the relevant unit linked fund. Please see the table on page 7 for a full list of charges. Your personal illustration shows how your investment could grow at the yearly percentages indicated. Our charges may vary in the future and may be higher than they are now. Please see the "Fund Guide A guide to Prudential's life funds (ex Scottish Amicable)" for further information on the charges. 6 Key Features of the Capital Investment Bond (Series 2) Additional Investments

7 Unit Allocations The amount of your investment which is used to buy units is shown on the enclosed illustration. Prudential Funds Annual Management Charge Unit Trust Expense Total Management Charge Prudential Cash 0.75% 0.00% 0.75% Prudential Equity 0.75% 0.02% 0.77% Prudential European 0.75% 0.04% 0.79% Prudential International 0.75% 0.04% 0.79% Prudential Invesco Perpetual Managed Growth* 1.10% 0.33% 1.43% Prudential Japanese 0.75% 0.05% 0.80% Prudential M&G Corporate Bond* 0.75% 0.02% 0.77% Prudential M&G Dividend* 0.90% 0.02% 0.92% Prudential M&G Episode Growth 0.75% 0.18% 0.93% Prudential M&G Gilt & Fixed Interest 0.75% 0.02% 0.77% Prudential M&G Index-Linked Bond 0.75% 0.02% 0.77% Prudential M&G Index Tracker* 0.65% 0.02% 0.67% Prudential M&G Managed Growth* 0.95% 0.08% 1.03% Prudential M&G UK Equity Income* 0.95% 0.02% 0.97% Prudential Managed 0.75% 0.05% 0.80% Prudential North American 0.75% 0.02% 0.77% Prudential Pacific Markets 0.75% 0.12% 0.87% Prudential Property 0.75% 0.45% 1.20% * These funds are available for bonds taken out on or after 1 January Key Features of the Capital Investment Bond (Series 2) Additional Investments 7

8 Establishment Charge Second Series, Version 1 Plans (Policy Rules ref. U110/11/94 U110/07/95) The establishment charge is equal to 0.75% per annum of the value of units purchased by each single premium investment. This is applied for the first five years after the investment is made. Second Series, Version 2 Plans (Policy Rules ref. U110/01/96 onwards) The establishment charge is equal to 1.25% per annum of the value of units purchased by each single premium investment. This is applied for the first four years after the investment is made. Annual Service Charge Where an annual service charge applies, this will be shown on the enclosed personal illustration. Any such charge is taken quarterly as a percentage of your fund value. Encashment Charge If you surrender your bond within five years of making an investment, a charge expressed as a percentage of the value of units surrendered will be levied as detailed below. Surrender Year (measured from date investment made) Surrender Charge (as a % of the unit value) After 5 Years 0.0 For regular withdrawals or partial withdrawals from the bond within five years of the first or any additional investment, a charge calculated as above will be levied. However, in any year this charge will only be levied on the value of units cashed-in which exceeds 7% of the total investments. In addition to our Product Charges, there may be some additional costs which may impact the overall performance of the fund. These costs include trading, dealing costs and property expenses. More information about these may be found in the Fund Guide. Our charges may vary in the future and may be higher than they are now. Further details can be found in the "Rules for Capital Investment Bond Policy (Second Series)". Stopping your bond Should you wish to stop your bond at any time other than during the Cancellation Period (see below) you should send us any legal documents affecting your ownership of it and a letter outlining your requirements. The amount of any benefit, which is not guaranteed, may be more or less than the total of the investments made. What happens if I move overseas? Please note Prudential is not able to accept new monies from customers living overseas. If you move abroad and are no longer a resident of the UK this will impact on your ability to top up this product. Can I change my mind? When your application has been accepted, we'll send you a Cancellation Notice. If you wish to use your right to cancel your additional investment, you should complete and return the Cancellation Notice or write to us at: Prudential Customer Services Lancing BN15 8GB You have a right to cancel within 30 days of receiving the Cancellation Notice. If you decide to cancel you may not get all your money back. The amount you'll get back will be the value of your single payment less the proportionate amount of any decline in the value of your units. For cancellations within the 30-day Cancellation Period only, where a bond is held in joint names, we will accept cancellation by any one of the policyholders, whether acting alone or jointly on behalf of all policyholders. If you decide to cancel your investment at any time after the 30-day cancellation period has ended, you may not get all your money back. What you get back will depend on the performance of the investments and our charges. 8 Key Features of the Capital Investment Bond (Series 2) Additional Investments

9 Other information Client category We classify you as a 'retail client' under Financial Conduct Authority (FCA) rules. This means you'll receive the highest level of protection for complaints and compensation and receive information in a straightforward way. Compensation If we get into financial difficulties which may affect our ability to pay your claim, you may be eligible to receive compensation under the Financial Services Compensation Scheme (FSCS). The FSCS is an independent body set up by Government to provide compensation for people where their authorised financial services provider gets into financial difficulties and becomes unable, or unlikely to be able, to pay claims against it. This circumstance is widely referred to as being in default. It is important for you to be aware that you may not always be able to make a claim under the FSCS, and there are also limitations in the amount of compensation you may receive. Any compensation available will depend on your eligibility, the type of financial product or service involved, the investment funds selected (if applicable) and the circumstances of the claim. You can find out more information on the FSCS and examples of limits in the scope of FSCS cover for your plan at or you can call us. Information is also available from the Financial Services Compensation Scheme. Visit their website: Or write to: The Financial Services Compensation Scheme PO Box 300 Mitcheldean GL17 1DY Or call the FSCS: Telephone: Financial Strength Prudential meets EU standards for meeting its financial obligations. You can read our solvency and financial conditions reports at or if you contact us we can post some information to you. Rules for Capital Investment Bond Policy (Second Series) and Schedule This key features document gives a summary of your bond. Full details are set out in "Rules for Capital Investment Bond Policy (Second Series)" and schedule which is available on request using our contact information and will also be sent to you when your bond starts. Conflict of Interest We want to make sure that we uphold our reputation for conducting business with integrity. If we become aware that our interests may conflict with yours we will take all reasonable steps to manage it in an appropriate manner. We have drawn up a policy to deal with any conflicts of interest. If you would like to know the full details of our Conflict of Interest Policy, please contact our Customer Service Team on the contact details on the back page. Law The law and courts of Scotland will decide any dispute. Key Features of the Capital Investment Bond (Series 2) Additional Investments 9

10 Our regulators We are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Prudential Assurance Company Limited is entered on the Financial Conduct Authority (FCA) Register, FCA Reference Number The FCA Register is a public record of all the organisations that the FCA regulates. You can contact the FCA at: The Financial Conduct Authority 25 The North Colonnade Canary Wharf London E14 5HS Telephone: or consumer.queries@fca.org.uk Prudential Regulation Authority details: The Prudential Regulation Authority Bank of England Threadneedle St London EC2R 8AH Telephone: enquiries@bankofengland.co.uk Communicating with you Our plan documents and terms and conditions are in English and all our other communications with you will be in English. How to make a complaint If you have a complaint, please get in touch with us and we will do everything we can to resolve it. You can also ask us for details of our complaints handling process. Our contact details are in the How to contact us section at the back of this document. If you re not satisfied with our response, you can take your complaint to the Financial Ombudsman Service who help settle individual disputes between consumers and businesses providing financial services: Financial Ombudsman Service Exchange Tower London E14 9SR Telephone: or Or visit the website: This service is free and using it won t affect your legal rights. 10 Key Features of the Capital Investment Bond (Series 2) Additional Investments

11 How to contact us If you want to contact us before you invest you can write, phone, or fax: Write to: Prudential Lancing BN15 8GB UK Phone: Monday to Friday 8am 6pm (we are not open on public holidays). We may record or monitor calls to improve our service. An answer phone is in operation outside office hours. If you are a Deaf customer, who is also a British Sign Language (BSL) user, you can contact us using a Video Relay service. The service, provided by SignVideo, connects customers to fully qualified, registered NRCPD interpreters who will relay your conversation with a member of our customer service team. There is no cost for using this service to call Prudential and we re available to help you Monday to Friday, 8am to 6pm. Keep in touch It s important that we keep in touch so, if you change your address or any of your contact details, please let us know. Key Features of the Capital Investment Bond (Series 2) Additional Investments 11

12 Prudential is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group. Registered office at Laurence Pountney Hill, London EC4R 0HH. Registered number Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. W485 02/2018