Key Features of the Tax-Free Flexible Plan

Transcription

1 Key Features of the The Key Features suppied beow appy to the adut investment eement of the Famiy Fexibe Pan. No advice has been provided by Scottish Friendy in reation to this pan. If you are in any doubt as to whether this pan is suitabe for you, you shoud contact a financia adviser for advice. If you do not have a financia adviser, you can get detais of oca financia advisers by visiting Advisers may charge for providing such advice and shoud confirm any cost beforehand.

2 Heping you decide What is the purpose of this document? The Financia Conduct Authority is the independent financia services reguator. It requires us, Scottish Friendy, to give you this important information to hep you to decide whether our is right for you. You shoud read this document carefuy so that you understand what you are buying, and then keep it safe for future reference. What questions shoud I ask before I invest? In this document we have given you the answers to some important questions. You find these on pages 2 to 7. What shoud I do now? Pease read this Key Features document. Pease keep this document with your poicy document which we wi send you. Key Features of the Tax-free Fexibe Pan Its aims To enabe you to take advantage of your friendy society tax-free savings aowance. To aow your monthy premium to grow free of income and capita gains tax (other than tax on UK dividend income) with no fina tax charge when you cash in your pan after 10 years. To provide a sma ump sum for your dependants shoud you die during the ife of the pan. Whie the ump sum wi be free of income tax and capita gains tax, your estate may have to pay inheritance tax on it. Your commitment You agree to pay your chosen eve of premium for 15 years. You have the fexibiity to eave the pan eary. Risks Your investment wi be inked to the performance of the stocks and shares in which this pan invests. The vaue of such investments can rise and fa and is not guaranteed. As such you may get back ess than you invested. Your circumstances may change forcing you to cash in the pan before the end of 10 years which may resut in a tax charge. The tax treatment of your pan depends on your individua circumstances and the eves and basis of taxation may change in the future. This may reduce the amount you get back or increase the amount of tax you pay. Page 1

3 Questions & answers Who shoud consider this pan? You shoud consider this pan if: you re aged between 16 and 64, and iving in the UK you can pay reguar premiums over a 15 year period but want the fexibiity to exit earier; you want an investment that is inked to the performance of stocks and shares. What is the? The is a 15 year unit inked investment pan which wi invest your premiums in the Scottish Friendy UK Tracker Fund. You have the fexibiity to exit the pan before the 15 year term if you need to. There are no extra fees from Scottish Friendy to do so, but you may have to pay tax on any profits if you cash in before the 10 years. Pease see page 6 on potentia tax impications for cashing in. Anyone who is a UK resident between the ages of 16 and 64 can pay into a Tax-Free Fexibe Pan. Whist you can ony take out one in your own name, you can pay into as many as you ike provided each one is taken out in the name of different famiy members or friends. You may take out a Chid Fexibe Pan in the name of a chid under the age of 16 that you care for. How does it work? You seect at outset how much you want to invest reguary throughout the term of your pan. Your reguar premiums wi then be invested in the UK Tracker Fund. Each fu premium buys units in the UK Tracker Fund which wi then rise and fa as a resut of the performance of the investment in the underying fund on a daiy basis and pan charges. You wi be abe to track the performance of your fund on the Scottish Friendy website In addition, each year we wi send you a statement showing your pan s current vaue. At the end of your pan s ife, the units in your pan wi be sod and their vaue wi be paid to you free from any fina tax charge. Your pan comes into force when your poicy document is issued and your first premium is coected. Page 2

4 How much can I invest? You can invest from 15 up to 25 a month. As ong as you haven t used up your tax-exempt savings aowance either with us or another friendy society, then you re abe to invest in the. The tax-exempt savings aowance imit, of 25 per month, is set by the Government and is the tota premium that anyone can pay into a tax-free friendy society pan. It is aso a quaifying ife poicy and you cannot pay in more than a tota of 3,600 each year to any quaifying ife poicy with Scottish Friendy or any other ife company or friendy society. What is the UK Tracker Fund? The UK Tracker Fund is a daiy priced unit inked fund. It is inked to the performance of an underying fund which tracks and foows the performance of a UK stock market index. The seection of this underying fund wi be based on Scottish Friendy s assessment of the abiity of the fund manager to track the seected index, the costs and the actua index which the fund tracks. Scottish Friendy reserves the right to change this underying fund ink whenever they beieve it to be in the interests of its poicyhoders. The fund is currenty inked to the Lega & Genera UK Index Trust, a UK authorised unit trust. Shoud this underying fund ink change then detais of the new fund wi be posted on the Scottish Friendy website at additionay we wi contact you by emai or in writing to inform you of the change. What are the charges? This investment has an annua management fee of 1.5%. This annua management fee incudes the cost of fund management for the underying fund. The annua management fee is deducted on a daiy basis and a fund prices are shown after the effect of this charge. In addition there is a reguar charge for the cost of ife cover. This wi vary with your age and the difference between the current vaue of your pan and the ife cover provided. Charges may vary in the future. Payment of commission Scottish Friendy wi pay Lifestye Marketing (Mother & Baby) Limited a commission for introducing. The amount of commission wi be 35% of the first year s premiums. For exampe, on a 25 per month investment, the tota commission payabe wi be 105. This is subject to tota commission of 30,000 per month. Commission is paid out of poicy charges. The payments do not affect the money paid into a given Tax-free Fexibe Pan. Page 3

5 Can I cash in my pan? The is a 15 investment but you have the fexibiity to cash in earier. You shoud note that if you cash in your pan before 10 years you may be subject to a tax charge based on any profits you may have made. Pease read page 7 on potentia tax impications for cashing in. Can I stop paying the premiums? If you stop paying premiums your pan wi be made paid up if you do not decide to cash in your pan. When money stops being invested in your pan, no additiona units wi be purchased and the ife cover wi cease. The vaue of your pan wi therefore depend on the number of units aready purchased, before the pan was made paid up and their growth up to the cash-in date. The annua management charge on your fund wi continue to be deducted from your pan. Within 12 months of your pan being made paid up (and provided you have not cashed in your pan) you can reinstate your pan provided you pay a outstanding premiums and subject to satisfactory evidence of heath. After 12 months your pan cannot be reinstated. What if I die during the ife of the pan? If you die during the ife of your pan your estate wi receive a cash payout; the greater of your ife cover or the current vaue of your pan, which is cacuated by mutipying the units you own by the price of the reevant fund on the date of death. The amount of ife cover you receive depends on the amount that you pay in and your age. The ife cover wi be equa to 75% of the premiums to be paid into your pan. So a 25 monthy premium invested over 15 years woud generate ife cover of 3,375. For a 30 year od investor paying 25 a month, the cost of ife cover is estimated to be 0.05 per month over the ife of the pan. For a 50 year od investor this is estimated to be 0.30 per month over the ife of the pan. If you die before the end of the ife of your pan, we may need to contact your doctor for medica information. You shoud note that depending on the vaue of your estate, inheritance tax may be payabe on death. Page 4

6 What you might get back after 15 years An exampe: Investor aged 30 next birthday Duration of pan 15 years Monthy premium 25 Tota invested 4,500 Projected maturity vaues If investments grow at 4% per year, you woud get back 5,430 If investments grow at 7% per year, you woud get back 6,900 If investments grow at 9% per year, you woud get back 8,120 These figures are ony exampes and are not guaranteed. They are not minimum or maximum amounts. What you get back depends on how your investment grows and on the tax treatment of the investment. You coud get back more or ess than the figures projected above and the tota amount invested. The annua rates of growth for the iustration have been based on our reasonabe estimate of potentia returns and are the maximum projection rates permissibe by the Financia Conduct Authority, with the exception of the ower rate which is ess than the maximum permitted rate. A the figures incude the deduction of the actua charges assumed on the pan. These charges may vary in future. Do not forget that infation woud reduce what you coud buy in the future with the amounts shown. Page 5

7 How coud the charges affect my investment? The iustration beow is based on a 25 monthy investment for an investor aged 30 next birthday at outset investing for 15 years. The ast two coumns assume that investments grow by 7% each year. WARNING: If you cash your pan in eary, you coud get back ess than you have paid in. At the end of year Tota paid in to date Tota actua deductions to date Effect of deductions to date What you might get back , , , , , , , ,900 What are the deductions for? The charges incude the cost of ife cover and annua 1.5% management fee. The ast ine of the tabe shows that over the fu 15 year ife of the pan, the effect of tota deductions coud amount to 919. Putting it another way, eaving out the cost of ife cover, this woud have the same effect as bringing the investment growth down from 7% to 5.5%. Can I change my mind? After your appication has been accepted, you wi receive notice of your right to cance. By aw you have 30 days in which to change your mind. A premiums paid before the operation of the canceation notice wi be returned. To cance you simpy need to foow the instructions contained within your wecome pack. If you do not cance, your pan wi continue as described in this document. Page 6

8 What happens if Scottish Friendy becomes insovent? If you buy a Scottish Friendy and we cannot pay the fu amount due, you may be entited to compensation under the Financia Services Compensation Scheme. The maximum eve of compensation for caims against firms decared in defaut is 90% of the caim with no upper imit. You can get further information from the Financia Services Compensation Scheme at: Financia Services Compensation Scheme, 10th Foor, Beaufort House, 15 St Botoph Street, London EC3A 7QU. Te What about tax? A premiums invested on a tax-free basis are invested free of income tax and corporation tax. The fund in which you invest receives UK dividend income, net of corporation tax. Payouts are normay free of persona charges for income and capita gains tax. However, a tax debt can arise when the pan has been made paid up within 10 years and is subsequenty cashed in. In such circumstances, tax payers may have to pay tax at their highest margina rate on the difference between premiums paid in and the cash in vaue. You shoud note that if the guaranteed minimum cash sum on death forms part of your estate, inheritance tax may have to be paid on it. A references to taxation are to UK taxation and are issued on the basis of Scottish Friendy Assurance Society s understanding of current tax aw and practice. The tax treatment of your pan depends on your individua circumstances and the eves and basis of taxation may change in the future. Page 7

9 How to contact us Here are our contact detais if you need to ask us anything: Scottish Friendy Assurance Society Limited, Scottish Friendy House, 16 Bythswood Square, Gasgow G2 4HJ. Te: *. *Cas cost no more than cas to numbers starting with 01 or 02 and if you are caing from a mobie phone, cas wi count towards any incusive minutes you have rather than being charged seperatey. Other information Your cient category We are required to categorise our cients and this determines the eve of detai and information that you receive. We wi treat you as a Retai Cient in respect of the services we wi provide, which means that you wi benefit from the highest eve of consumer protection. How to compain If you wish to compain about any aspect of the service you have received, pease contact us. Detais can be found in the How to contact us section. If you are not satisfied with our response to your compaint, you can contact the Financia Ombudsman Service at: Financia Ombudsman Service, South Quay Paza, 183 Marsh Wa, London E14 9SR. Te: (free from a UK andine) or (free for mobie users who pay a monthy charge for cas to numbers starting 01 or 02). Making a compaint won t affect your ega rights. Language and aw The contractua terms and conditions and a communications in reation to this pan wi be suppied in Engish. In ega disputes, the aw of Scotand wi appy. This booket is a brief guide to the key features of the product. Fu detais are contained in the poicy document which is evidence of the egay binding contract between you and Scottish Friendy Assurance Society Limited. Scottish Friendy Scottish Friendy Assurance Society Limited was founded in 1862 (formery The City of Gasgow Friendy Society) and is an incorporated friendy society under the Friendy Societies Act 1992, registered in the United Kingdom at the address on the back of this booket. The tota funds under management are over 900 miion (as at 31/12/12). Page 8

10 Rues of Scottish Friendy You can ask Scottish Friendy for a copy of its rues. The Direct Debit Guarantee This Guarantee is offered by a banks and buiding societies that accept instructions to pay Direct Debits. If there are any changes to the amount, date or frequency of your Direct Debit Scottish Friendy wi notify you 5 working days in advance of your account being debited or as otherwise agreed. If you request Scottish Friendy to coect a payment, confirmation of the amount and date wi be given to you at the time of the request. If an error is made in the payment of your Direct Debit, by Scottish Friendy or your bank or buiding society, you are entited to a fu and immediate refund of the amount paid from your bank or buiding society. If you receive a refund you are not entited to, you must pay it back when Scottish Friendy asks you to. You can cance a Direct Debit at any time by simpy contacting your bank or buiding society. Written confirmation may be required. Pease aso notify us. Page 9

11 Scottish Friendy Assurance Society Limited, Scottish Friendy House, 16 Bythswood Square, Gasgow G2 4HJ. Authorised by the Prudentia Reguation Authority and reguated by the Financia Conduct Authority and the Prudentia Reguation Authority. Detais can be found on the Financia Services Register Registration No Member of ABI and AFM. FPV1EDWKF0413