Personalised Key Features Illustration for your Collective Retirement Account

Transcription

1 The Financial Conduct Authority is a financial services regulator. It requires us, Old Mutual Wealth Life & Pensions Ltd to give you this important information to help you decide whether this Collective Retirement Account is right for you. You should read this document carefully so that you understand what you are buying, and then keep it in a safe place. Personalised Key Features Illustration for your Collective Retirement Account Please read this illustration together with your Key Features Document. Your Key Features Document describes in general terms the pros and cons of the Old Mutual Wealth Collective Retirement Account. Unlike that document, this illustration has been personalised to you. Its aim is to give you a summary of the account you have chosen and the associated costs and benefits. Your Collective Retirement Account will be held on our platform. This is an innovative place for you and your financial adviser to build, manage and monitor your investments. It gives you access to a wide choice of funds and a range of tax-efficient ways to hold them in a single place. Other important documents about your investment include the Old Mutual Wealth Funds List and our "Making the cost of investment clear" guide document. For further information about any aspect of this Key Features Illustration, please ask your financial adviser. Prepared for: Male, Born: 24 June 1958 Financial adviser: Date of this illustration: Reference number: Retirement age for this illustration: Investment range: 21 May SelfSelect Purpose of this document: The purpose of this document is to show you: 1. The proposed contributions being paid into your account 2. What the future value of your account might be 3. The charges for your account and any rebates from fund managers Page 1 of 8

2 4. The effect of charges on the future value of your account The calculations and projected values in this illustration are based on the assumption that there are additional investments worth 29, linked to this investment, and that they will continue to be invested on the platform at this value throughout the period covered by this illustration. Notes to help you understand this illustration The way we present this information and the assumptions we use to calculate future values are in line with the requirements of the Financial Conduct Authority. The amounts shown are not guaranteed. The words 'might' and 'could' are used throughout this document to remind you that none of the figures or values in the tables are guaranteed. The actual outcome depends on factors that no-one can predict and on the changes and adjustments you might make in future to the funds in your account. Tax-free cash. For the purposes of this illustration, we assume the tax-free cash to be 25% of your fund value. In some circumstances this amount may be restricted or enhanced because of legislation or protection. Lifetime Allowance. HM Revenue and Customs set a limit to the total value that you can build up in pension savings. This is called the "Lifetime Allowance" (currently 1,030,000). If the value of all the pension funds you hold - not just this account - exceeds this allowance, there may be an additional tax charge. How much can you contribute each year? Annual allowance rules limit the amount that can be contributed to your pension each tax year from all sources, including your employer (not counting any unused allowances from previous years), without being liable to a tax charge. The normal annual allowance is 40,000.00, but may taper down to 10, for individuals with adjusted income above 150, or fall down to 4, if you have already flexibly accessed any income payment. This lower limit is known as the Money Purchase Annual Allowance. Contributions cannot exceed your gross (pre-tax) annual earnings (or 3,600 if greater). Your adviser will be able to explain this in detail. Don't forget inflation. Over the years, inflation will reduce the buying power of your money. The projected figures in this illustration are adjusted for inflation to help you understand what this could mean. For example, in twenty years' time, after allowing for inflation at 2.5% a year, 10,000 would only buy you what 6,100 would buy today. 1. Your contribution(s) The table below shows details of the proposed contributions being paid into this account: Contribution Reference Source of contribution Type Increasing each year? Contribution amount Personal tax relief* Total amount A ( ) You Monthly Yes B ( ) Royal London Transfer Not applicable Nil Page 2 of 8

3 * If you are a higher rate tax payer you may be eligible for further tax relief on the contributions you make or those paid for you by someone else. You can claim this relief through your tax return. Regular contributions are assumed to cease at the end of the projection period, or age 75 if earlier. 2. What the future value of your Collective Retirement Account might be The table below shows what the value of your account might be at age 70. The projection assumes that your regular contributions continue on the same basis and cease at the end of the projection period, or age 75 if earlier. Remember that none of the values shown are guaranteed. The future value depends on the rate of growth of your investment and the amount you withdraw. Percentage growth rates used We cannot predict how the investments in your plan will grow, but we can give you an indication of what the future value of your account might be using the calculation method described below. Different types of investment funds have different potential growth rates. For example cash-based funds typically have lower anticipated growth rates than stock-market based funds. To calculate the values below, we project each fund in your account using the specific anticipated growth rates appropriate for that fund. We then add those projections together to produce the values shown. The 'low', 'mid' and 'high' columns represent a range of possible economic outlooks, taking into account factors such as general investment growth, inflation, wages growth and annuity interest rates. So, for example, if there is low general economic growth over the period of this projection, the figures at the lowest growth rate represent a more likely outcome. Bear in mind that none of these values are guaranteed. Information on the growth rates used by Old Mutual Wealth for projections is available from the Old Mutual Wealth website: The effect of charges and inflation As required by regulation, the projected figures in this document take into account the charges applicable over the projection period, and are adjusted for inflation at 2.5% each year. We show any contribution amounts without inflation adjustment in bold text and the same amounts, adjusted for inflation, in normal text. Further information about how we adjust for inflation, and the effect that might have on your investment, is available from the Old Mutual Wealth website: At age 70 Low rate Mid rate High rate Projected value, adjusted for inflation 36,300 48,200 63,600 Page 3 of 8

4 Low rate Mid rate High rate Before charges, the annual overall growth rates represented by the above projections, adjusted for inflation, would be: -1.00% 2.00% 5.00% What annuity you could buy: One way in which you can provide yourself with an income is by buying an annuity. This means cashing in all or part of your account to buy a regular guaranteed income. There is a variety of annuities available from any provider you wish. You can buy whichever one best suit your needs. (This is known as the open market option.) Old Mutual Wealth does not provide annuities. We are required to give you an idea of annuity income you may be able to buy with your value of your future pension pot. The example in this section shows the income you might get if you buy an annuity at age 70. For this purpose, and throughout this illustration, when estimating annuity income we have assumed that you would purchase an annuity that gives you regular payments for life. We have also assumed that: the annuity will be payable monthly in advance for the rest of your life for a minimum period of 5 years the payments would not increase in the future there would be no ongoing payments to a spouse or civil partner after your death no Lifetime Allowance charges apply The figures below are based on annuity interest rates applicable at the date of the annuity purchase. For dates beyond the next 12 months, standard annuity interest rates are provided by the Financial Conduct Authority. If you buy an annuity at age 70 Low rate Mid rate High rate The projected value of your account, adjusted for inflation, might be 36,300 48,200 63,600 If used to purchase an annuity, this could give you a yearly taxable income of 1,610 2,680 4,330 OR a tax-free sum of 9,080 12,000 15,900 plus a yearly taxable income of 1,200 2,010 3,250 Page 4 of 8

5 3. The charges for your Collective Retirement Account, and rebates from fund managers Your financial adviser's fees You have instructed us to pay the following fees to your financial adviser. Initial fee: For your transfer contribution(s) an initial fee of 3%, which amounts to 1, This fee will be taken from your transfer(s) after investment. Servicing fee: Your servicing fee is 1% of the value of your account each year, including VAT where applicable, taken in monthly instalments. This fee will be collected by cashing in units proportionally across all the funds in your account. If you make direct payments to your financial adviser or instruct us to make any such payments in the future, this illustration does not take account of them. Old Mutual Wealth charges The Product Charge: This is a regular charge applied to this account. The percentage rate used to calculate the charge takes into account the total value of any investments you hold on our platform. At the date of this illustration, the value of your other investments (not including your new contribution(s)) is assumed to be 29, For this illustration we have assumed that this value will continue to be invested on our platform throughout the period covered by this illustration. We take the Product Charge in monthly instalments, based on monthly valuations. Bear in mind that, as the total value of the investments you hold on the platform increases or decreases in future as a result of market movements, withdrawals or further contributions, the Product Charge will vary accordingly. The charge is based on the following percentages and is taken by cashing in units from your account each month. Total amount invested on the platform Percentage charge each year First 25,000 From 25,000 to 500,000 From 500,000 to 1,000,000 More than 1,000, % 0.20% 0.15% 0.10% On the day the charge is due, we calculate an annual charge taking account of the value on that day of all your funds held on the platform. Then we take 1/12th of this as a monthly instalment. For example, at the mid growth rate your account might be valued at 44,277 in 12 months time. Based on this value the annual charge would be 0.268%. This means that the instalment in month 12 for this account would be This charge will be collected each month by cashing in units proportionally across all funds in your account. Page 5 of 8

6 Fund Manager Charges and Rebates: You don't pay these charges as an actual monetary amount. Instead, the charges made by fund managers are reflected in the daily price of units. The effect of these charges will be offset by any rebates payable to you in the form of additional fund units. The charges differ from fund to fund. Some are known as dual-priced because they have different buying and selling ( bid and offer ) prices. This difference is known as the bid/offer spread. Some funds have an initial charge. Any bid/offer spreads and initial charges are taken into account in this illustration. The ongoing charges and the rebates that apply to the funds you have chosen for your account are shown in this table: Fund Name Proportion invested Fund manager charge before rebate (TER*) Rebate paid to you as additional fund units ** Effective annual fund manager charge after rebates Old Mutual Cirilium Moderate Portfolio -U (acc) % 1.24% 0.00% 1.24% Average fund manager charge before rebate (TER*) Average rebate paid to you as additional fund units ** Effective average annual fund manager charge after rebates Taking into account the proportions of each of the funds chosen for your account at the time of this illustration, the above percentages average out at: 1.24% 0.00% 1.24% * The percentage fund manager charges based on the total expected annual cost of running the fund, known as the Total Expense Ratio (TER). ** Rebates from fund managers, which are not guaranteed, are usually paid to you each month in the form of extra fund units added to your account. The figures shown are the expected annual rebate for each fund. Rebates are explained in the document: "Making the cost of investment clear" (Charge Basis 3). The charges, bid/offer spreads and rebates for all funds available for you to invest in are shown in the Old Mutual Wealth Funds List available from your financial adviser or at: 4. The effect of charges on the future value of your Collective Retirement Account Using the assumption that your account grows at the mid growth rate (see section 2), and this is by no means guaranteed, the following table(s) show how its value would be affected over the years to age 70 by all the charges. The values shown also take account of the positive effect of any rebates. The charges to be taken from your account, detailed in section 3, will reduce the amount invested. The tables below show the effect of these charges on the future value of your account for both regular and one-off contributions (including transfers). Current regulations require us to show these separately. Page 6 of 8

7 The calculations are based on the assumption that your account grows at the 'mid rate' shown in section 2. The actual growth rate could turn out to be lower than this and you may get back less than you paid in. All pension plan providers have to give you these figures, in this form, to help you compare the effect of charges for their plans. The difference between the figures in the last two columns show the effect of your financial adviser's charges when added to the charges made by Old Mutual Wealth and the managers of your chosen funds. Regular contributions End of Year Total contributions to date What you might get back assuming your account grows at the mid rate Before charges After Old Mutual Wealth and Fund Manager charges are taken After all charges are taken, including your adviser charges , , ,560 1,530 1, , , ,380 2,330 2, , , ,230 3,130 3, , , ,110 3,950 3,850 And at age 70 (year 7, ) 9, ,040 8,380 7,970 The reduction in value from 9,040 to 8,380 at age 70 means that the combined effect of Old Mutual Wealth charges and your fund manager's charges would be a reduction in the growth rate of 1.6% each year. The reduction in value from 9,040 to 7,970 at age 70 means that the combined effect of Old Mutual Wealth charges, your fund manager's charges and your financial adviser's charges would be a reduction in the growth rate of 2.6% each year. One-off contributions End of Year Total contributions to date What you might get back assuming your account grows at the mid rate Before charges After Old Mutual Wealth and Fund Manager charges are taken After all charges are taken, including your adviser charges 1 42, ,800 44,100 42, , ,700 44,300 42,100 Page 7 of 8

8 What you might get back assuming your account grows at the mid rate End of Year Total contributions to date Before charges After Old Mutual Wealth and Fund Manager charges are taken After all charges are taken, including your adviser charges 3 40, ,600 44,500 41, , ,500 44,700 41, , ,400 44,900 41,400 And at age 70 (year 34, ) 53,400 45,900 40,300 The reduction in value from 53,400 to 45,900 at age 70 means that the combined effect of Old Mutual Wealth charges and your fund manager's charges would be a reduction in the growth rate of 1.6% each year. The reduction in value from 53,400 to 40,300 at age 70 means that the combined effect of Old Mutual Wealth charges, your fund manager's charges and your financial adviser's charges would be a reduction in the growth rate of 2.9% each year. This effect of charges information only takes account of the charges we are aware of at the date of this illustration. It does not for example include any additional amount that you may agree to pay your financial adviser in future for fund switches or any other service. Similarly, if you pay your adviser any fees over and above the amount that you have asked us to pay them, the effect of that is not included. This illustration has been produced using information provided to Old Mutual Wealth for that purpose. It is for guidance only and should not be regarded as a legally binding part of any contract. Calls may be monitored and recorded for training purposes and to avoid misunderstandings and records are available for at least five years Old Mutual Wealth Ltd and Old Mutual Wealth Life and Pensions Ltd are registered in England & Wales under numbers and respectively. Registered Office at Old Mutual House, Portland Terrace, Southampton SO14 7EJ, United Kingdom. Old Mutual Wealth Ltd is authorised and regulated by the Financial Conduct Authority. Old Mutual Wealth Life and Pensions Ltd is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Their Financial Services register numbers are and respectively. VAT number is Page 8 of 8