Key Features of the products within the James Hay Wrap Service

Transcription

1 of the products within the James Hay Wrap Service This document is designed to help you decide whether this service is suitable for you. You should read it carefully so that you understand how the service and its underlying products work and keep it safe for future reference.

2 Contents Introduction 1 1. of the Wrap Investment Portfolio 2 2. of the Wrap ISA 4 3. of the Wrap SIPP 6 4. Important information about the Wrap service 10 How to contact us 12

3 The James Hay Wrap The Financial Conduct Authority is the independent financial services regulator. It requires us, James Hay Partnership, to give you this important information to help you to decide whether our Wrap is right for you. You should read this document carefully so that you understand the features of the service and its underlying products, before making your investment decisions. Please keep this document safe for future reference. The James Hay Wrap is a portfolio management service that allows you and your Financial Adviser to manage your investments held in different tax environments. Your Financial Adviser will have access to information about This document is intended to be a summary and should be read in conjunction with the Wrap Terms and Conditions and the Specific Product Terms and Conditions. your investments through James Hay Online. If you wish to review the benefits you may expect to When you establish your Wrap service, an Investment Portfolio is created for you to hold a range of investments permitted by the product rules. You can then apply to open any, or all, of the following Wrap Products: an ISA to accept subscriptions and/or transfers from receive from any of the products within your Wrap described within this document please refer to your illustration for each product, provided by your Financial Adviser. However, please note that your benefits could be more or less than the figures shown on the illustration. other stocks and shares and cash ISAs a SIPP to accept contributions and/or transfers from existing pension schemes an Offshore Bond. Your Financial Adviser will be able to advise you on all the options available and which are the most appropriate to meet your needs. Within this document there are Documents for each of the elements of your Wrap to include the Investment Portfolio, the ISA and the SIPP. More information Please note that you must have a regulated Financial Adviser appointed at all times to use the Wrap service and hold the products within it. on the Offshore Bond is available on request from your Financial Adviser. James Hay Wrap Managers Limited is the provider of the Wrap Service and is the HM Revenue & Customs (HMRC) approved ISA Manager. James Hay Insurance Company Limited is the provider of the SIPP and has appointed James Hay Pension Trustees Limited as trustee of the Scheme and James Hay Administration Company Limited to administer the Scheme. 1

4 1. of the Wrap Investment Portfolio Aims In order to produce growth or income, the Investment Portfolio allows you to invest in a selection of investments including stocks and shares, bonds and gilts, as well as collective investment schemes, which includes a range of funds from our Investment Centre at specially negotiated discounted rates. It allows you to make regular withdrawals, if required, as you continue to invest. Your investment There s no set term, and you can invest for as long as you wish. You can invest regular or single lump sum deposits. You can stop or change your regular payments at any time. Your payments will buy shares and/or units in the Permitted Investments of your choice. Permitted Investments are assets that you can buy, as described in the Wrap Investment Portfolio Permitted Investments List (available from or from your Financial Adviser). We recommend regularly reviewing your investments and the amount you pay, with your Financial Adviser. Risk factors Past performance should not be used as a guide to the returns you can expect in the future. What you get back is going to depend on the performance of the investments you ve chosen, and will vary from day to day. The value of your Investment Portfolio and any income from it can fall as well as rise, and is not guaranteed at any time. It could also fall below the amount you originally invested, particularly in the early years. Stocks that promise high returns could be at an increased risk of default. Our charges may change in the future, and this could reduce the value of your investment. If you withdraw money from your Investment Portfolio, it will affect any income and capital growth you receive, and you may not get back the amount you originally invested. Any foreign investments will be affected by changes in rates of currency exchange. Any change in general interest rates could affect the value of your investment. For more information on the risks associated with Wraps, please read our guide; SIPPs & Wraps: assessing the risks available from our website at Questions and answers What exactly is the Investment Portfolio? When you set up the Wrap Service, an Investment Portfolio is automatically opened for you. The Investment Portfolio can hold a wide range of investments. An associated bank account will also be opened in your name with Santander UK Plc, to enable payments to be made into and out of your Investment Portfolio. This Investment Portfolio Bank Account (Bank Account) is not designed for general banking transactions, so you will not receive a cheque book or a cash card and you will not be able to pay in or withdraw money at a Santander branch. Who can have one? Anyone who is aged 18 or over and is resident in the UK for tax purposes and not an undischarged bankrupt nor a US Person can establish a Wrap, but it cannot be set up jointly with, or on behalf of, anyone else. How much money do I need to open a Wrap? There is no minimum amount required to set up a Wrap. However, if you choose to open a Wrap with an Offshore Bond the minimum investment for the Offshore Bond is currently 100,000. You can open an Investment Portfolio by cheque, electronic bank transfer or direct debit. How much can I save? You can save as much as you like. Will I receive interest? Yes. Interest is calculated daily, using your balance at that time. We ll pay the interest into your Investment Portfolio Bank Account every month, in arrears on or around the first Business Day of each month. Interest will be paid after tax has been deducted, unless you are a non-taxpayer and you have registered to have your interest paid gross. Can I make further deposits? You can add to the Investment Portfolio at any time - there is no limit. How do I make further deposits? By cheque, electronic bank transfer or direct debit - at any time. There is no charge for making deposits. This money can then be used to buy your chosen investments. Please contact your Financial Adviser if you want to make any further deposits. Where can I invest my money? The Investment Portfolio allows you to invest in an extensive range of investments, including: Unit Trusts Investment Trusts OEICs (Open Ended Investment Companies) Stocks and Shares Gilts Life Assurance Bonds. 2 Please ask your Financial Adviser for the Wrap Investment Portfolio Permitted Investments List for further details.

5 Can I switch funds within my Investment Portfolio? Yes, you can decide how your money is invested and switch funds within your account at any time. Each investment provider has their own limits for switching and how much must remain within a particular investment and they, or your Financial Adviser should be able to give you more information. What could I get back? You ll get the value of your investment held in the Investment Portfolio at the time the investments are sold. There is no guaranteed amount. The amount you get is going to depend on the following factors: how much you invest the fund performance any charges any income or withdrawals you ve taken the terms and conditions of the investment. How do charges and expenses affect my Investment Portfolio? We deduct a Transaction Charge that covers the cost of all transactions (up to a maximum of 20 sharedealing transactions per year). This Transaction Charge will be calculated on the basis of your overall Wrap valuation (excluding any cash held) on a monthly basis. The calculation will take place on the monthly anniversary of the date that your Wrap was established. There will also be an amount to cover the Adviser Charges that you have agreed with your Financial Adviser. These charges will be taken from your Investment Portfolio Bank Account monthly in arrears. Will I pay tax? The Investment Portfolio is not a tax exempt product. The tax you pay will depend on the type of investments that you hold and your personal circumstances. At the end of each tax year, we will provide you with all the relevant information that you will need to include in your self-assessment tax return. For further information, please speak to your Investment Portfolio Financial Adviser or Tax Adviser. You can make withdrawals from your Investment Portfolio on a regular basis, or as a single lump sum. Regular withdrawals will be transferred by electronic transfer to a bank account in your name. Lump sum payments will be made either by cheque or by electronic transfer to a bank account in your name. Can I close my Investment Portfolio at any time? Yes. You must give us one month s notice by writing to the Wrap Team (see the How to contact us section at the back of this booklet). Please note that as all Wraps must include an Investment Portfolio, if you close your Investment Portfolio we will also close your Wrap and any other products held within it. We will not charge you to close your Wrap although we will charge the pro rata amount of the current month s Transaction Charge. If you do want to close your Wrap and some of your investments are held in a tax wrapper like an ISA or a pension, there are HMRC rules on when and if you can take the money out of the tax wrapper, how you transfer funds and where they go. Please speak to your Financial Adviser before making any decisions. What happens if I die? If you die, your Investment Portfolio will form part of your estate. Once we receive proof of title, we will follow the instructions of your personal representatives. We will pay them any remaining cash balance together with interest earned up to the date we close the Investment Portfolio, or if requested, we will transfer the Investment Portfolio s investments to them. Can I change my mind? Yes. When we have accepted your application for an Investment Portfolio, you will have 14 days in which to change your mind and withdraw all money from the Bank Account. Your Investment Portfolio will then be cancelled. Cancelling the Investment Portfolio will result in your Wrap service being terminated and the associated Bank Account being closed. You will get a refund of any contributions paid into the Bank Account, less any amounts used to purchase individual investments. All decisions regarding your investments should be made with your Financial Adviser. How will I know what my Investment Portfolio is worth? After we accept your application we will send you a welcome letter, followed by a statement showing your initial investment. Any additional payments into your Investment Portfolio will be acknowledged, and statements will be sent to your Financial Adviser. Every six months, we will also send you a statement showing the value of your Investment Portfolio and the transactions carried out over the past six months. You can ask us for statements every three months, but if you d like information between your statements, you can ask your Financial Adviser who will obtain the information from us. There may be a charge for this. How do I withdraw my money? You can withdraw any amount at any time, without incurring charges. However, there could be a charge from third party product providers. For example, some life assurance bonds may have an exit charge. Your Financial Adviser will be able to give you information on this. 3

6 2. Key features of the Wrap ISA What is an ISA? Investment in an ISA provides a tax efficient way of saving. There are two types of ISA available under the ISA regulations: Cash ISA Stocks and shares ISA In each tax year you may subscribe to one cash ISA and one stocks and shares ISA. For the 2015/16 tax year, the ISA allowance is 15,240. You can split the amount you pay into an ISA between a cash ISA and a stocks and shares ISA as you choose, up to the 15,240 limit. If you do not use the ISA subscription limit in any tax year you cannot carry it forward or add it to the subscription limit of the next tax year. Who are ISAs suitable for? An ISA is suitable for anyone who can afford to set aside money, to build up savings over the medium to long term. A cash ISA will guarantee to return your initial investment. A stocks and shares ISA may be able to offer a potential for higher returns, but there is no guarantee of what you might get back. You could get back less than you paid in. You should therefore think carefully about the risks before deciding which type of ISA is right for you. What is the Wrap ISA? The Wrap ISA is a stocks and shares ISA as defined under ISA regulations. Aims The Wrap ISA provides a tax efficient way of investing in a wide range of investments, including stocks and shares, bonds and gilts, as well as collective investment schemes and secure cash deposits. It provides you with the facility to make regular withdrawals, if required, as you continue to invest. It enables you to benefit from potential capital growth and/or income over the medium to long term as well as a return on cash investments in the form of interest, that is paid gross. Your Commitment Before buying the Wrap ISA, you need to consider whether you have sufficient investment experience and are prepared to be responsible for making decisions about how your money is invested during the time that your Wrap ISA is open. Your Financial Adviser will be able to assist you with this process. You will need to make at least one payment into your Wrap ISA. You will need to pay the charges which are set out in the Wrap Charges Schedule. You should regularly review your investments and the amount you pay in with your Financial Adviser. You should consider this type of investment as a medium to long term commitment. To open a Wrap ISA you must already hold a Wrap Investment Portfolio. If you later close your Wrap Investment Portfolio, the Wrap ISA will also have to be closed. For further information, please refer to the Wrap Terms and Conditions. Risk factors General Future changes to tax rules could affect the taxation of your investments and the interest you receive on your cash deposits. Decisions you make in relation to payments into your Wrap ISA, the investments and cash deposits you select and whether you make withdrawals from your Wrap ISA could affect the value of your investments. Applying for the Wrap ISA If you apply for the Wrap ISA and later change your mind and want to cancel it, you may get back less than you paid in. For further information, please refer to the Wrap ISA Terms and Conditions. If you are transferring an existing ISA, there could be exit penalties imposed by the transferring ISA Manager. If you transfer existing investments into (or out of) your Wrap ISA, they may need to be transferred as cash and you may not get the benefit of any investment increases whilst the transfer is being processed. Whilst your money is invested The value of an investment can go down as well as up, and you may not get back the amount you originally invested. This is more likely if you select complex, high risk investments. This would affect the value of your Wrap ISA. The rate of interest offered on the Product Bank Account is variable and could change in the future. The rates of interest offered on fixed term deposits with one of the providers on our Non SIPP Cash Panel, whilst fixed for the term you select once invested, may not be the same once your deposit has matured. If you invest in a fixed term deposit on our Non SIPP Cash Panel, there may be charges or loss of interest if you transfer out before the end of the term. If the value of your Wrap ISA is low, the effect of charges could significantly reduce its value over time if the returns on the investments in the Wrap ISA do not cover the level of charges. Different types of investment have different risks. For further information on the risks that are specific to a particular investment, please speak to your Financial Adviser. The illustration you receive will give you an indication of what you might get back from your Wrap ISA. The figures quoted are based on a number of assumptions and are not guaranteed. The actual performance of your investments held in your Wrap ISA could be better or worse than the amounts shown in the illustration. You should regularly review the performance of your investments to ensure they are in line with your expectations. If you withdraw money from your Wrap ISA, it will affect any income and capital growth you receive, and you may not get back the amount you originally invested. Any foreign investments will be affected by changes in rates of currency exchange. Any change in general interest rates could affect the value of your investment. 4

7 Depending on where you invest, your investment may not have protection under the Financial Services Compensation Scheme (FSCS). Whilst the Product Bank Account and the fixed term deposits available on our Non SIPP Cash Panel are covered by the FSCS, in the event of the failure of the investment bank, there are limits to this cover. For further information, please see page 10 of this Document. Withdrawals from your Wrap ISA The value of your Wrap ISA is not guaranteed. It will depend on a number of factors such as future investment performance and charges deducted. It may take time to sell certain investments. If a delay does occur, this may affect your financial planning, as the money to pay your required withdrawals may not be available when you need it. Questions and Answers Is the Wrap ISA the correct product for me? If you are looking to build capital growth, save money whilst earning interest free of UK income tax or take income from your existing investments, or a combination of all, and want access to a wide variety of investments and, depending on the investments you select, are willing to take a degree of risk with your capital, then the Wrap ISA may be right for you. Who can take out the Wrap ISA? You can take out the Wrap ISA if you are over 18, resident in the UK, not a US Person and are not an undischarged bankrupt. Who can make payments into the Wrap ISA? We will normally only accept payments into your Wrap ISA if they are from you. How do I make payments into the Wrap ISA? You can make payments into your Wrap ISA by cheque, electronic bank transfer or direct debit. How much can I pay into the Wrap ISA? There is no minimum amount you must pay into your Wrap ISA. The maximum amount you can pay into the Wrap ISA in the 2015/16 tax year is 15,240. If you wish to invest in a fixed term deposit with one of the providers on our Non SIPP Cash Panel, a minimum investment level will apply. Please see our website at for further details. You can make regular or occasional payments at any time and you can vary the amount and frequency of your payments as long as you do not exceed the HMRC maximum limits for tax free savings into an ISA account in any tax year. Can I transfer existing ISAs into the Wrap ISA? Yes, you can transfer existing ISAs that you own into your Wrap ISA. Transfer payments in the form of cash or assets other than cash (known as in-specie transfers) can be accepted. What can I invest in? You can choose from investments including: Unit trusts Investment trusts OEICs (open ended investment companies) Stocks and shares Gilts Fixed term deposits. Investments will usually be bought on your behalf, by James Hay Wrap Managers Limited and will be registered in the name of James Hay Wrap Nominee Company Limited. However, if you opt for stocks and shares, you ll need to appoint an execution only stockbroker, Selftrade or Abbey Stockbrokers Limited (ASL), and these assets will be held in the name of the Stockbrokers Nominees or any other nominee that they decide to use. You can find information about Selftrade and ASL by visiting the investments section at For a full list of what you can invest in, please refer to the Wrap ISA Permitted Investments List. If you want more information on investments provided by third parties, it s best to speak to your Financial Adviser or contact the individual fund manager or provider concerned. We are not authorised to provide any advice on which investment is suitable for you. Can I switch funds within my ISA? You can switch funds within your Wrap ISA at any time. Each investment provider has their own limits for switching and how much must remain within a particular investment and they or your Financial Adviser should be able to give you more information. How do I withdraw my money? You can withdraw any amount - or close your Wrap ISA - at any time, at no charge. Withdrawals can be made on a regular basis, or as a single lump sum - and you can choose which underlying investments are realised to make the payment. If you withdraw an amount from your Wrap ISA, you can only reinvest that amount back into an ISA if you have available unused subscription allowance for that tax year. There is no minimum amount that must remain in your Wrap ISA. You can make withdrawals or close your Wrap ISA by writing to us at the address shown in the How to contact us section at the back of this booklet. If you would like to make withdrawals on a regular basis, you will need to notify us at least 14 Business Days before the end of the month, before the date the first payment has to be made. Regular withdrawals will be transferred by electronic transfer to a bank account in your name. These payments will be made on or around the first Business Day of each month. Lump sum payments will be made either by cheque or by electronic transfer to a bank account in your name. Please contact your Financial Adviser or the Wrap Team if you want to make any further withdrawals. 5

8 What happens if I die? The tax-free benefits of your Wrap ISA will end from the date of your death. Once we have received acceptable notification of your death, the investments and cash held in your Wrap ISA will be moved to your Wrap Investment Portfolio. We will act on the instructions of your personal representatives once they have provided us with proof of title, such as a grant of probate or letters of administration. They may instruct us to either sell any remaining investments and, together with any interest earned, pay the cash balance on their instructions, or transfer any investments and cash held in your Wrap ISA together with any interest earned up to the date we close on their instructions. Your Wrap ISA will then be closed. The proceeds from your Wrap ISA will form part of your estate for inheritance tax purposes. If on your death you have a surviving spouse or civil partner, in addition to their usual ISA allowance, they will be able to invest as much into their own ISA as you had in your ISA at the date of your death. To do this they will have to either already have, or take out, an ISA with us. How will I know what my Wrap ISA is worth? After we accept your application we will send you an acknowledgement letter. Any additional payments into your Wrap ISA will be acknowledged, and statements and/or contract notes will be sent to your Financial Adviser showing your additional investments. Every six months we will send you a statement showing the current value of your Wrap ISA, as well as the transactions carried out for you during the previous six months, unless you have asked for this every three months. If you need information between statements, please contact your Financial Adviser who will obtain the information from us, but there may be a charge for this. Will I pay tax on my ISA? The Wrap ISA is a tax exempt product which means you will not pay tax on any gains you make within your Wrap ISA product. The tax treatment of ISAs may change in the future. We are unable to provide you with individual tax advice and if you need this you should speak to your Financial Adviser. What are the charges? We deduct a Transaction Charge that covers the cost of all transactions (up to a maximum of 20 sharedealing transactions per year). This Transaction Charge will be calculated on the basis of your overall Wrap valuation (excluding any cash held) on a monthly basis. The calculation will take place on the monthly anniversary of the date that your Wrap was established. The element relating to your Wrap ISA is deducted from the Investment Portfolio Bank Account. Please note: You should ensure that you have sufficient funds in your Investment Portfolio Bank Account to pay these charges. In addition to these Transaction Charges you will need to check whether your fund manager applies charges for their services. Can I transfer to another ISA Manager at any time? You can transfer your Wrap ISA to another ISA Manager at any time. However, if you have invested in a fixed term deposit, there may be charges or loss of interest if you transfer out before the end of the term. You may transfer all of your current tax year ISA, or part or all of a previous tax year s ISA at any time, provided the transfer is in accordance with the regulations applying to ISAs and your new ISA Manager agrees to the transfer. A transfer may be made in cash or by re-registering assets depending on your ISA Manager s agreement. Can I change my mind? Yes - once we have accepted your application for a Wrap ISA you will be sent a cancellation form. You will have 14 days, starting from the date you receive the cancellation form, during which you have the right to change your mind. In order to exercise your right to cancel, you must send signed confirmation to the Wrap Team at the address shown in the How to contact us section at the back of this booklet if you d like to make withdrawals. If you cancel your Wrap ISA and the value of investments has fallen in the meantime, we will reduce the amount we pay back to reflect that fall. If you do not return the cancellation form, then your Wrap ISA will continue in accordance with the Wrap Terms and Conditions. All decisions regarding your Wrap ISA should be taken with your Financial Adviser. 6

9 3. Key features of the Wrap SIPP The Wrap SIPP is a type of registered pension scheme known as a Self Invested Personal Pension (SIPP), which allows you to make your own investment decisions or to formulate your investment strategy in conjunction with your Financial Adviser. Like all registered pension schemes the Wrap SIPP provides you with a means of saving for your retirement. It is a long term investment and is designed to provide you with an income in retirement. The Wrap SIPP is not a stakeholder pension scheme, however stakeholder pension schemes are generally available and may meet your needs as well as this scheme. The underlying legal framework for all Wrap SIPPs is The James Hay Personal Pension Plan. The Plan has been set up under trust and accepted as a registered pension scheme by HMRC. James Hay Insurance Company Limited is the provider of the Wrap SIPP and has appointed James Hay Pension Trustees Limited as Trustee of the Scheme and James Hay Administration Company Limited to administer the Scheme. Reference to James Hay Partnership in this document includes these companies where relevant in the particular context, unless a specific company name is mentioned. Under the terms of its governing documentation, each Wrap SIPP represents a separate trust fund separate from other clients SIPPs under the James Hay Personal Pension Plan. This document provides you with the main points about the Wrap SIPP and should be read in conjunction with the Wrap Technical Product Guide, which provides more detailed information. Aims The Wrap SIPP is designed to provide you with: a tax-efficient means to save for your retirement the ability to make your own investment decisions in conjunction with your investment manager or your Financial Adviser the opportunity to invest in a broad range of investments including commercial property the opportunity to take your benefits in stages and phase in your retirement if you wish flexibility over provision for your beneficiaries in the event of your death. Your investment You can establish the Wrap SIPP for the purpose of receiving contributions or transfers from other pension arrangements. There is no commitment on your part to continue making contributions and no penalty for ceasing or reducing contributions to a Wrap SIPP. It is an HMRC requirement that you will not be able to take your benefits until age 55 unless you retire early due to ill health or have a protected early retirement age as defined by the legislation. Risk factors General Future changes to tax rules could affect tax relief on contributions, the taxation of your investments and the taxation of your benefits when you come to take them. Decisions you make in relation to payments into your Wrap SIPP, the investments you select and the way in which you take benefits from your Wrap SIPP could affect the level of the benefits you receive at retirement. Applying for the Wrap SIPP If you apply for the Wrap SIPP and later change your mind and want to cancel it, you may get back less than you paid in. For further information, please refer to the Wrap SIPP Terms and Conditions. If you transfer existing pension funds into (or out of) your Wrap SIPP, they may need to be transferred as cash and you may not get the benefit of any investment increases whilst the transfer is being processed. If you transfer existing pension funds into your Wrap SIPP from another registered pension scheme you may give up valuable pension rights or guarantees that the Wrap SIPP cannot match. The existing pension provider may also apply a penalty, resulting in a reduction in the value of the transfer. Whilst your money is invested The value of an investment can go down as well as up, and you may not get back the amount you originally invested. This is more likely if you select complex, high risk investments. This would affect the value of your Wrap SIPP and the benefits you would be able to take. If the value of your Wrap SIPP is low, the effect of charges could significantly reduce its value over time if the returns on the investments in the Wrap SIPP do not cover the level of charges. Different types of investment have different risks. For further information on the risks that are specific to a particular investment, please speak to your Financial Adviser. The illustration you receive will give you an indication of what you might get back from your Wrap SIPP. The figures quoted are based on a number of assumptions and are not guaranteed. Your actual benefits, when you come to take them, could be more or less than the amounts shown in the illustration. You should regularly review your contributions and the performance of your investments to ensure your Wrap SIPP is in line with your expectations. Depending on where you invest, your investment may not have protection under the Financial Services Compensation Scheme (FSCS). Please see page 10 of this Document for further information. Withdrawals from your Wrap SIPP The value of your Wrap SIPP and the benefits it provides are not guaranteed. They will depend on a number of factors such as future investment performance, charges deducted, annuity rates and interest rates at the time you take benefits. If you take your pension income earlier than originally intended, the amount you receive could be less than expected due to the value of the Wrap SIPP at that time. It may take time to sell certain investments. If a delay does occur, this may affect your retirement planning, as the money to pay your required benefits may not be available when you need it. For example, commercial property held within the Wrap SIPP could take several months to sell, or you may not be able to find a buyer. 7

10 High levels of price inflation could reduce what you could buy in the future with your pension benefits. For more information on the risks associated with SIPPs, please read our guide, SIPPs & Wraps: assessing the risks, available from our website at SIPP Questions and answers When can I take benefits? You can normally start drawing retirement benefits from age 55, even if you are still working. The amount you receive will depend on the value of your Wrap SIPP. When you come to take retirement benefits, if the total of all your pension funds exceeds a certain limit (the lifetime allowance) you may have to pay a tax charge on the excess (the lifetime allowance charge). Please see the Wrap Technical Product Guide for further information. What is a SIPP? The Wrap SIPP is a type of registered pension scheme known as a Self Invested Personal Pension providing a flexible, tax-efficient retirement plan. The Wrap SIPP allows you to make your own investment decisions about how your Wrap SIPP funds are invested, or with the help of your Financial Adviser, or Investment Manager. If you appoint an Investment Manager or a Financial Adviser they must be suitably authorised by the Financial Conduct Authority. You, or someone on your behalf, including your employer if you have one, can pay contributions regularly into a Wrap SIPP each month or year and/or pay single contributions. You may also be able to transfer funds from other types of pension arrangements into a Wrap SIPP. From the age of 55, the Wrap SIPP allows you to draw a regular income whilst your pension fund remains invested. What are the tax advantages? Under current legislation if you are a UK resident your contributions qualify for tax relief at the highest marginal rate of tax that you pay. HMRC does not limit the amount you can contribute to a Wrap SIPP, only the amount that is tax privileged. The funds invested are free from UK income and capital gains taxes (except that tax may not be reclaimed on dividends), unless your investment is regarded as taxable property by HMRC. Death benefits are normally paid free of inheritance tax. Tax benefits may change in the future which could affect the amount of benefit you receive. What are the investment options? When you join the Wrap SIPP, an associated bank account is set up to receive all contributions and transfer values. This bank account is held in the name of James Hay Pension Trustees Ltd as the SIPP trustee. Funds may then be invested in a wide range of investments such as stock market shares, Government Securities (Gilts), Collective Investment Schemes including a range of funds from our Investment Centre, commercial property, or land. More details of the types of investments permitted are included in the Wrap SIPP Permitted Investments List. What benefits can I have from the Wrap SIPP? You can take your retirement benefits in a number of different ways. Flexi-access drawdown You can take a tax free lump sum (known as a Pension Commencement Lump Sum or PCLS) of up to 25% of your pension fund. You can then draw a regular income from the remaining pension fund. The income you draw will be subject to tax at your marginal rate. You can vary the level and frequency of the income at any time. Uncrystallised Funds Pension Lump Sum (UFPLS) You can take lump sums (called Uncrystallised Funds Pension Lump Sums or UFPLS) out of your pension fund which has not yet been crystallised (i.e. it is not yet in drawdown) on an ad-hoc basis. If you do this, 25% of the UFPLS payment will be tax free and the remaining 75% will be subject to tax at your marginal rate. Lifetime Annuity You can take a tax free lump sum (known as a Pension Commencement Lump Sum or PCLS) of up to 25% of your pension fund. You can then use your remaining pension fund to purchase a lifetime annuity from an insurance company. This is where the insurance company agrees to pay you a regular income until you die. The income is taxed at your marginal rate. For further details of the options and rules for taking benefits from your Wrap SIPP, please refer to the Wrap SIPP Technical Product Guide. Guidance Guarantee Deciding what benefits to take from your pension is an important decision. We recommend that you seek appropriate guidance or advice to understand your options at retirement. You are entitled to receive free and impartial guidance under the Government s Guidance Guarantee. The guidance does not replace financial advice given by regulated Financial Advisers. The objective of the Guidance Service called Pension Wise, which is provided as part of the Guidance Guarantee, is to empower you to make informed and confident decisions on how you use your pension savings in retirement. For further details of how to access this service please see page 10 of this Document. Current tax benefits are not guaranteed. Any changes made by the government may impact the level of your benefits when you come to take them. 8

11 What happens if I have a Wrap SIPP and I die? Your Wrap SIPP is held within a Trust, which means it does not usually form part of your estate and therefore is not subject to inheritance tax. You can provide us with details of who you would like to receive any benefits payable from your Wrap SIPP on your death. This does not bind us, but will help us decide to whom we will pay out benefits. These benefits can be paid either as a lump sum or as a beneficiary s pension. The tax treatment of these benefits will vary depending on whether you died before or after age 75. For more information full details of the benefits payable on death are given in the Wrap Technical Product Guide. How do I obtain tax relief on my contributions? If you are a UK resident your regular and single contributions are paid net of basic rate tax, and we will collect the basic rate tax relief from HMRC. If you are a higher rate tax payer, you can claim the extra tax relief from HMRC through your annual tax return. If your employer makes contributions, they will pay them gross. There is no tax relief on transfers from other pension funds into your SIPP. Remember that the rules on tax relief depend on individual circumstances and may change in the future without prior warning. Can I transfer out? Yes, but funds providing income withdrawals may only be transferred to registered pension scheme arrangements which have been set up for the purpose of receiving transfers from income withdrawal arrangements. Cancellation rights Can I change my mind? You will have cancellation rights in respect of your SIPP. We will send you a cancellation notice as soon as we have opened your SIPP. You will have 30 days during which you have the right to change your mind and send the cancellation notice back to James Hay Partnership. Your SIPP will then be cancelled. If you cancel a contribution payment we will give you your money back less any fall in the investment value and if you re cancelling a transfer payment we will try and return the money back to the original pension scheme less any fall in investment value. Please note: It may not always be possible to return a transfer payment to the original pension scheme if you cancel the Wrap SIPP, or a particular transfer payment, within the cancellation period, after the transfer has been received by us. In this circumstance you will need to arrange for another pension scheme to accept the transfer. Can I change my mind when electing to take benefits? If you elect to take income withdrawals from your Wrap SIPP we will send you a cancellation notice. You will have 30 days during which you have the right to change your mind and send the cancellation notice, along with any Pension Commencement Lump Sum and income you may have received, back to James Hay Partnership. Your election to take income withdrawals will then be cancelled. If we are instructed to re-invest the returned Pension Commencement Lump Sum and/or income in the same investments from where the money originally came, you may receive less units/shares because of transaction costs or upward movements in prices. The same applies where investments have already been sold before the cancellation form is received by us and the proceeds are held in the SIPP Bank Account in order to pay future income. If we are instructed to re-invest this cash in the same investments from where the money originally came, you may receive less units/shares. If you choose to cancel your election to take income withdrawals this will not affect any instructions you send us to take income withdrawals in the future. Your right to cancel will remain unaffected if any event beyond your control makes it impracticable for you to communicate the wish to cancel. Further information What charges can I expect? We deduct a Transaction Charge that covers the cost of all transactions (up to a maximum of 20 sharedealing transactions per year). This Transaction Charge will be calculated on the basis of your overall Wrap valuation (excluding any cash held) on a monthly basis. The calculation will take place on the monthly anniversary of the date that your Wrap was established. The element relating to your SIPP is deducted from the SIPP Bank Account. How will I know what my Wrap SIPP is worth? After we accept your application we ll send an acknowledgement letter to your Financial Adviser, followed by a statement showing your initial transfer payments and contributions to the Wrap SIPP. Any additional payments into your Wrap SIPP will be acknowledged and statements will be sent to your Financial Adviser. Every six months we ll also send you, and your Financial Adviser, a statement showing the value of your Wrap SIPP and the transactions, including any corporate actions, carried out over this period, unless you have requested a statement every three months. Are there any possible tax charges? Contributions in excess of the annual allowance will be subject to a tax charge at your marginal rate by HMRC on the excess amount. Investments within the Wrap SIPP enjoy freedom from UK tax on income and capital gains, except that tax may not be reclaimed on dividends. However, if an investment is regarded as taxable property it will be subject to tax charges prescribed by legislation. Any income withdrawals and eventual annuity income will be taxed under the PAYE system. In the absence of enhanced protection, funds paid out which are in excess of your lifetime allowance will be subject to a tax charge. The tax charge will be 25% on the excess if it is paid as an income in addition to income tax, or if you take a lump sum from funds in excess of your lifetime allowance there will be a tax charge of 55% on the excess. If at any time you receive benefits which are not in accordance with current pension rules these will be regarded by HMRC as unauthorised payments and will be subject to any tax charges that are prescribed by legislation. 9

12 4. Important information about the Wrap service Guidance Service The Guidance Service called Pension Wise is provided by The Pensions Advisory Service and the Citizens Advice Bureau. You can receive this guidance online, by telephone or face-to-face. To use the Guidance Service please visit the website at What if I have a complaint? If you are not satisfied with any aspect of the service that you have received from us, please contact the Complaints Manager using any of the methods detailed in the How to contact us section overleaf. We have a formal complaints procedure and a copy is available on request. Complaints that we cannot settle may be referred to the Financial Ombudsman at: The Financial Ombudsman Service South Quay Plaza 183 Marsh Wall London E14 9SR Telephone: Calls to this number are normally free for people ringing from a fixed line phone - but charges may apply if you call from a mobile phone. Telephone: Calls to this number are charged at the same rate as 01 or 02 numbers on mobile phone tariffs. complaint.info@ financial-ombudsman.org.uk Website: Making a complaint will not affect your right to take legal proceedings. How do you hold my money and investments? For details on how we will hold any money and/or investments within the different Wrap products, please read the document available on our website called How your Money and Investments are held within James Hay Partnership Products. Can I claim compensation? We are covered by the Financial Services Compensation Scheme ( FSCS ). If we cannot meet our obligations, you may be entitled to compensation under the FSCS. We will send you details of the cover provided by the FSCS on request. However, if you have the Offshore Bond Product you will not be protected by the FSCS if RL360º is unable to meet its obligations to you. You will instead be protected by the Isle of Man Life Assurance (Compensation for policyholder) Regulations Further details are available on request. The individual product providers for your underlying investments may themselves offer protection under the FSCS in respect of their products held within your Wrap. Please ask your Financial Adviser or the particular product provider for further information. The bank accounts are held with Santander UK Plc. Santander is covered separately by the FSCS. The FSCS can pay compensation to depositors if a bank is unable to meet its financial obligations up to a combined maximum of 85,000 for all accounts held with Santander. For further information about the FSCS (including the amounts covered and eligibility to claim) please telephone us on or refer to the FSCS website at Where can I find information on the bank s interest rates? The relevant rates of interest to be applied to the bank account(s) are available on request by telephoning us on Any changes to interest rates will be notified on our website. We currently pay interest on bank accounts at a rate of 15/16ths of 1% below Bank of England base rate, subject to a minimum interest rate payable of %. Where the rate of interest applied to the bank account is less than the rate of interest paid by the bank account provider, we may retain any surplus towards the cost of providing banking services. For further information please refer to the Wrap Charges Schedule. Where can I see your Terms and Conditions? The latest version of our Wrap Terms & Conditions is available online at Alternatively, please ask your Financial Adviser for a copy. How is this affected by the law? Our relationship with you is governed by the law of England and Wales. IMPORTANT INFORMATION Any information relating to tax in this guide is based on our interpretation of current law and HMRC practice. Please remember that current tax benefits may change in the future. 10

13 How to contact us Call the Wrap team on: Lines are open 9am to 5pm Monday to Friday. To help us improve our service we may record or monitor calls. Visit our website: Write to us at: James Hay Partnership Dunn s House St Paul s Road Salisbury SP2 7BF 11

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16 Dunn s House St Paul s Road Salisbury SP2 7BF James Hay Partnership is able to provide literature in alternative formats. The formats available are: Large Print (as recommended by RNIB), Braille, Audio Tape and PC Disk. If you would like to receive this document in an alternative format please contact us on For the hard of hearing and / or speech impaired, please use the Typetalk service via James Hay Partnership is the trading name of James Hay Insurance Company Limited (JHIC) (registered in Jersey number 77318); IPS Pensions Limited (IPS) (registered in England number ); James Hay Administration Company Limited (JHAC) (registered in England number ); James Hay Pension Trustees Limited (JHPT) (registered in England number ); James Hay Wrap Managers Limited (JHWM) (registered in England number ); James Hay Wrap Nominee Company Limited (JHWNC) (registered in England number ); PAL Trustees Limited (PAL) (registered in England number ); Santhouse Pensioneer Trustee Company Limited (SPTCL) (registered in England number ); Sarum Trustees Limited (SarumTL) (registered in England number ); Sealgrove Trustees Limited (STL) (registered in England number ); The IPS Partnership Plc (IPS Plc) (registered in England number ); Union Pension Trustees Limited (UPT) (registered in England number ) and Union Pensions Trustees (London) Limited (UPTL) (registered in England number ). JHIC has its registered office at 3rd Floor, 37 Esplanade, St Helier, Jersey, JE2 3QA. IPS, JHAC, JHPT, JHWM, JHWNC, SPTCL, SarumTL and IPS Plc have their registered office at Trinity House, Buckingway Business Park, Anderson Road, Swavesey, Cambs CB24 4UQ. PAL, STL, UPT and UPTL have their registered office at Dunn s House, St Paul s Road, Salisbury, SP2 7BF. JHIC is regulated by the Jersey Financial Services Commission and JHAC, JHWM, IPS and IPS Plc are authorised and regulated by the Financial Conduct Authority. The provision of Small Self Administered Schemes (SSAS) and trustee and/or administration services for SSAS are not regulated by the FCA. Therefore, IPS and IPS Plc are not regulated by the FCA in relation to these schemes or services.(01/14) JHAY 0623A APR15 GDF