Important document please read. Capital Investment Bond

Transcription

1 Important document please read Capital Investment Bond

2 Key Features of the Capital Investment Bond The Financial Services Authority is the independent fi nancial services regulator. It requires us, Wesleyan Assurance Society, to give you this important information to help you to decide whether our Capital Investment Bond is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference. Wesleyan Assurance Society, founded in 1841, is a mutual organisation. It provides a range of financial products for a number of specialist professional markets. These Key Features give a summary of the Wesleyan Capital Investment Bond. They do not include all the definitions, exclusions, and terms and conditions. These are set out in the policy document. If you would like a copy of the policy document, please contact our Head Office direct. The Wesleyan Capital Investment Bond is an investment plan that provides a small amount of life cover. Its aims To give capital growth. To give an income by taking regular withdrawals if you choose. To allow you to choose from a range of funds to match your investment objectives. To allow you to top up your investment at any time up to age 80. Your commitment Risks What you get back will depend on our investment performance. There are no guarantees. When you choose to cash in your plan, you may get back less than illustrated if: you have taken unplanned regular withdrawals or a one-off withdrawal; investment growth is lower than illustrated; charges increase above those illustrated. There is a charge for cashing in early (during the first five years). This charge will not apply to agreed regular income withdrawals within the limits we set. See Can I take money out?. The plan invests in a range of investment types, including stocks and shares, which carry different levels of risk. If you cash in your plan early because you change your mind (see Can I change my mind? ) ) you may get back less than the amount you invested because of charges or falls in the value of the investments within your chosen fund(s). If you invest in the Wesleyan Life With Profits Fund, we may apply a market value reduction in certain circumstances which will reduce the value of your plan. See What is a Market Value Reduction? To invest a single lump sum of at least 7,500 or to top up your original investment by at least 1,000. You must keep a minimum of 500 in your plan at all times. The plan has no fixed term, but you should aim to keep it for at least five years.

3 Questions and answers Who can invest in it? UK residents aged between 18 and 79 can apply. It can be written as single or joint life (payable on first or second death). How flexible is it? You can invest in one or more of three funds (see Where is my payment invested? ). ) You can choose to take a regular income and/or one-off withdrawals. You can cash in your plan at any time. Your plan will be divided into 100 identical parts. You can, if you choose, deal with these separately for example, by cashing in some while leaving the others fully invested. There will be a charge if you cash in any part of your plan in the first five years (see What are the charges? ). ) What might I get back? The plan value when you cash it in will depend on a number of things. For example, how much you pay in, how long your money is invested, how well our investments perform, charges, and whether you take a regular income and/or make one-off withdrawals. If you invest in the Wesleyan Life With Profits Fund, we may add an annual bonus to your investment each year. Once added, annual bonuses are guaranteed. A final bonus may be added when cashing in your investment but this is not guaranteed. We may also apply a market value reduction at certain times when cashing in your bond, for example when shares prices are generally low, which will reduce its value. For further details, please refer to the accompanying booklet How our With Profits Fund works (for policies where premiums are used to buy units). The illustration shows examples of the amount you may get in the future. These figures are not guaranteed. Can I add to my investment? You can add to your investment at any time up to age 80. The minimum top-up premium is 1,000. The maximum you can invest in total is 500,000 per bond. year. There is no new five-year charging period following a top-up. If you choose to take money for example, when share prices generally are low we may apply a market value reduction (see What is a Market Value Reduction? ). ) Any withdrawals will be taken in line with your current investment split. For example, if you have 50% of your money invested in the Wesleyan Managed Fund and 50% invested in the Wesleyan With Profits Fund then any withdrawals will be taken 50% from each of these funds. What is a Market Value Reduction? A market value reduction may be applied if you choose to cash in your bond at certain times, for example when share prices are generally low. This means we may have to reduce the value of your investment and you could get back less than you have paid in. The size of any market value reduction will depend largely on the underlying value of our With Profits fund at that time, and how long you have held your plan for. For further details on market value reductions, please refer to the accompanying booklet How our With Profits Fund works (for policies where premiums are used to buy units), in particular section 6. Where is my payment invested? We invest your lump sum or top-up in the Wesleyan funds of your choice. You can direct payments you make into a different fund or different funds at any time, or switch the value of existing payments out of one fund and into another. We currently offer three funds for you to choose from: The Wesleyan Life Deposit Fund The Wesleyan Life Deposit Fund aims to provide a short-term home for your investment when you consider some or all of your money should be held in non-equity linked investments. The Fund aims to achieve a high level of security by investing in Bank Deposits and other money market instruments. The value of your investments held in this fund will not fall except possibly in extreme investment conditions. Can I take money out? You can take money out at any time but this will lower the capital value of your investment. You can take a regular income from your plan. You do this by cashing in units monthly, quarterly, half-yearly or annually. The minimum income payment is 50, and the value of what s left in your plan must always be at least 500. The maximum income you can take is 7.5% of your total investment each year. We will make payments directly into your bank or building society account. You can make a one-off withdrawal of 500 or more at any time. The value of what s left in your plan must always be at least 500. We will make payment by cheque or directly into your bank or building society account. During the first five years, there is a charge when you take money out (other than for agreed regular income withdrawals within the limits described above). The charge is a percentage of the amount withdrawn. This charge is 5% in the first year and reduces by 1% a year to 1% in the fifth

4 The Wesleyan Life Managed Fund The Wesleyan Life Managed Fund aims to provide capital growth over a medium to long-term period by investing in UK and International shares, fixed interest stocks, property, cash and other related investments. Under normal circumstances it is recommended that investments in the Wesleyan Life Managed Fund are for a minimum of five years. It is divided into units which are like shares in the Fund. Your payment buys units in the fund. The value of your investment at any time depends on the total number of units you have in the Fund and their current price. If the unit prices rise or fall, so does the value of your investment. The Wesleyan Life With Profits Fund The Wesleyan Life With Profits Fund aims to provide capital growth over a medium to long-term period by investing in UK and International shares, fixed interest stocks, property, cash and other related investments. The Fund aims to avoid sharp rises and falls by smoothing the return on your investment over the period of the plan. Under normal circumstances it is recommended that investments in the Wesleyan Life With Profits Fund are for a minimum of five years. We use your lump sum to buy units in the Wesleyan Life With Profits Fund. These units represent your investment in the Fund. If you switch out of the Wesleyan Life With Profits Fund, we may apply a Market Value Reduction which will reduce your fund value. For further details, please refer to the accompanying booklet How our With Profits Fund works (for policies where premiums are used to buy units). We also charge for switching between funds. We do not charge for the first switch in any calendar year, but each further switch will cost 25. What about tax? The following is a general summary of the tax position and is based on our understanding of current legislation which may change in the future. Tax we pay We pay tax on the fund your money is invested in. Tax you pay You will not normally have to pay Capital Gains Tax on the proceeds. When money is paid out of the policy, either on surrender, death or on certain partial surrenders, there will only be some personal Income Tax to pay if you: Are a higher or additional rate taxpayer at the time, or; Become a higher or additional rate taxpayer because of a gain made under the policy, and; You withdraw over 5% each year of the premiums paid into the plan. If you don t use the 5% allowance in any one year, it can be carried forward for use in future years. Regular income withdrawals are treated as part surrenders under the policy for tax purposes. You may lose some or all of any entitlement to either the standard personal Income Tax allowance or the higher agerelated, personal Income Tax allowance as the result of a gain made under the policy. What happens to the Wesleyan Capital Investment Bond if I die? We will pay a lump sum of 101% of your plan s value at the time, including any final bonus. If your plan covers the lives of two people, we will pay out either when the first person dies or when they have both died whichever you have chosen at the start. If you arrange your plan under trust, we will pay the lump sum to the trustees. If you have invested in the Wesleyan Life With Profits Fund, we may add a final bonus. We won t apply a market value reduction if we pay out as a result of the death of a person whose life is covered under the plan. What are the charges? We apply an Annual Management Charge (AMC) for managing your plan and investments. The amount of the AMC depends upon whether or not you take a regular income. The AMC is a percentage of the fund value and is normally deducted daily from the investment funds. We currently take 1.35% p.a. of the fund value where no regular income is taken, increasing to 1.65% p.a. of the fund value when you take a regular income. This is made up of 1% in the daily calculation of the fund prices and an additional charge of either 0.35% p.a. or 0.65% p.a. (depending on whether you are taking a regular income ) is deducted by monthly encashment of units. Your personal illustration shows the effect our charges could have on your investment over the term of your plan. 100% of your investment is used to buy units.

5 If the policy is arranged under trust the Income Tax liability will vary depending on the trust. Inheritance Tax may be payable on death, unless the bond is arranged under trust. This is how we understand tax rules now. They may change in the future. Can I change my mind? You can change your mind within 30 days from when you get your plan documents (this is a statutory right). If you decide, for any reason, that you don t want the plan, or if you decide against topping-up your plan, we ll give you your money back. However, if you invested in the Wesleyan Life Managed Fund, you may get back less than you ve invested because you get back an amount equal to what your plan or top-up is worth at the time of cancellation (this may be due to fund charges and market conditions). How will I know how my plan is doing? We ll send you a yearly statement to show how your plan is doing. You can check the financial pages of the Financial Times to see how your fund or funds are performing. You can also get an up-to-date valuation by calling our helpline on or from our website How to contact us Other information How to complain If you ever need to complain, first write to the Complaints Team, Compliance Department at the above address. If you re not satisfied with our response, you can complain to: Financial Ombudsman Service Investment Division South Quay Plaza 183 Marsh Wall London E14 9SR. Complaining to the Ombudsman won t affect your legal rights. Law The law and courts of England and Wales will decide any dispute. Compensation If we cannot meet our financial obligations to you, you may be entitled to compensation under the Financial Services and Markets Act 2000 from the Financial Services Compensation Scheme. Details of the scheme can be obtained from the FSCS at 7th Floor Lloyds Chambers, 1 Portsoken Street, London E1 8BN. Telephone: enquiries@fscs.org.uk Website: If you have any questions at any time, please call us on , or visit our website or write to us at our Head Office address below, or fax us on We will try to answer your questions immediately. Our telephone lines are open 8.30am to 5.30pm Monday to Friday and 9am to 2pm on Saturdays. We may monitor calls to improve our service. Our Head Office address is: Wesleyan Assurance Society Colmore Circus Birmingham B4 6AR.

6 For all your fi nancial needs: Savings and Investments Retirement Planning Life and Income Protection Mortgages and Insurance Please call: Or visit: If you would like this document in Braille, large print or audio tape, please contact Head Office Wesleyan Assurance Society Colmore Circus Birmingham B4 6AR Advice is provided by Wesleyan Financial Services Ltd through its brand names including Wesleyan Medical Sickness, Wesleyan for Teachers and Wesleyan for Lawyers. Wesleyan Financial Services Ltd is authorised and regulated by the Financial Services Authority. Wesleyan Financial Services Ltd is wholly owned by Wesleyan Assurance Society. Incorporated by Private Act of Parliament (No. ZC145). Fax: Telephone calls may be recorded for monitoring and training purposes. WI-KFD-16-01/11