Share Contribution Key Facts. This is an important document which you should keep in a safe place. You may need to read it in future.

Transcription

1 Share Contribution Key Facts This is an important document which you should keep in a safe place. You may need to read it in future.

2 Contents 3 Using this document 4 Aims, commitments and risks 5 Questions and answers 10 Example illustrations 25 Other information 27 Terms explained Before you start reading We ve used plain language to keep the key facts simple. You ll find explanations of any technical terms we use in Terms explained at the end of this document. Whenever terms covered in Terms explained appear in the main text, we ve highlighted them in blue, like this. You should also read this document alongside the WorkSave Pension Plan Key Features document. Can you tell me more about Legal & General? The Legal & General Group, established in 1836, is one of the UK s leading financial services companies. As at 31 December 2017, the total value of assets across the group was billion, including derivative assets. We also had over 9.5 million customers in the UK for our life assurance, pensions, investments and general insurance plans. Finding out more This icon appears when more detailed information is available elsewhere. 2

3 Using this document You should read this document alongside the WorkSave Pension Plan Key Features document. Together these documents form the key features of the WorkSave Pension Plan. Your employer is offering you the opportunity to make share contributions to the WorkSave Pension Plan. This is classed as Self Investment, which is an option available to you within the WorkSave Pension Plan. Self Investment gives you greater choice and control over where you invest. What are key facts? This document provides you with the key facts about making a share contribution. It is designed to help you understand: Other documents To make sure you have all of the information you need about the WorkSave Pension Plan, you should also read the following documents: The WorkSave Pension Plan Key Features document The WorkSave Fees and Charges schedule with this Key Facts document. The Member s booklet contains more detailed information about the plan. We ll send you a copy once you join the plan, but you can request a copy now from our specialist helpline on Call charges will vary. We may record and monitor calls. Lines are open between the hours of 8.30am and 7pm Monday to Friday and 9am to 12 midday Saturday. What is involved in making a share contribution The benefits and risks of contributing shares into the WorkSave Pension Plan The charges made for making a share contribution The options available to you with self investment. 3

4 Aims, commitments and risks Its aims There are some very specific aims associated with using your company shares like this: To provide you with another way of saving for your future by contributing your company shares. To provide you with greater flexibility and control by giving you the choice to invest your money outside our insured fund range. However, you need a good understanding of the investments you choose as well as the costs and risks involved. We recommend that you seek financial advice when considering Self Investment. You can find an adviser in your local area by visiting unbiased.co.uk. Please note advisers usually charge for their services. You can find the main aims of the product in the WorkSave Pension Plan Key Features document. Your commitments If you decide to invest your company shares at maturity: Your commitment is to invest the minimum share contribution required. Your employer will let you know if any minimum contribution applies. You are responsible for selecting, reviewing and managing your own investments. You need to be happy that once you ve started your plan, any money or shares you invest will remain tied up until you choose to access your pension pot, which you can do at any time from age 55. Risks If you invest in a single asset such as shares of a single company there will be greater investment risk than if you spread your investment over a number of different assets. This means that you could lose some or all of your money. Investment of shares from a share maturity (or other personal share holdings) might mean you have to pay Capital Gains Tax (CGT). Any asset you choose to invest in will have specific risks which may be greater than the risks of investing in insured funds or a lifestyle profile. You should understand the risks associated with any asset before investing in it. These risks are applicable to making a share contribution and Self Investment and are additional to the risks in the main WorkSave Pension Plan Key Features document. 4

5 Questions and answers How does share contribution work? What are the benefits of investing my shares? You can use your company shares to save towards your retirement, benefiting from: Tax relief on your share contribution Any share price increases Any dividends paid on your shares The ability to make further cash and/or share contributions at any time. The value of your investment may go down as well as up. What will you do with my share contribution? Your share contribution is classed as Self Investment. How your contribution is handled will depend on whether your shares are held in an approved or an unapproved share plan. Your employer will be able to tell you what type your share plan is. Approved share schemes: An approved share scheme is a scheme that has been approved by HM Revenue & Customs (HMRC). Save as You Earn (SAYE) and Share Incentive Plan (SIP) are examples of approved schemes. When you choose the number of shares to transfer, these shares will be transferred into your WorkSave Pension Plan as a contribution. This is treated as a contribution net of basic rate tax relief. We will then add basic rate tax relief to the value of the shares transferred. The shares will be valued at the mid market price, which we will tell you. The tax relief will be held in your Member s SIPP bank account, until you tell us where you would like the money to be invested. You can either decide to use this money for Self Investment or invest it in the insured fund or lifestyle profile of your choice. The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances. 5

6 Unapproved share schemes: These are share schemes which are not approved by HMRC. When you choose the number of shares to contribute, these shares will be sold and the proceeds will be paid as a contribution to your WorkSave Pension Plan. Your contribution will be made before basic rate tax relief is added. We use the contribution to re-purchase the same number of shares within the WorkSave Pension Plan. We will tell you the mid market price and the shares will be sold and re-purchased at this price. If your shares are held in a foreign currency, a foreign exchange rate will be applied on the sale and re-purchase date. We will add basic rate tax relief to the contribution, and hold the tax relief in your Member s SIPP bank account. It will stay there until you tell us where you would like the money to be invested. You can either decide to self invest this money or invest it in the insured fund or lifestyle profile of your choice. What other options do I have within Self Investment? As well as your company shares you can invest in a wide choice of assets. This includes: Stocks and shares traded on a recognised UK stock exchange including shares quoted on the Alternative Investment Market (AIM) Authorised unit trusts Investment trusts and Open-Ended Investment Companies (OEICs) Deposit accounts. We list the types of asset available to you in your SIPP Permitted Investment Schedule. This will be sent to you after you join the plan, but you can request a copy now from our helpline on Call charges will vary. We may record and monitor calls. Full details about each asset and any risks, should be available from the provider of the asset. For unit trusts and OEICs the details and risks are set out in the relevant Key Investor Information Document for that fund, which you can obtain directly from the fund manager. 6

7 How much will it cost? Legal & General charges: You will need to pay charges to cover our administration costs and expenses. These cover the cost of setting up and managing your self invested plan: Installation Charge 200 plus VAT. We will deduct this charge from your Member s SIPP bank account when you self invest for the first time. When you join through a share contribution, we will deduct this charge after basic rate tax relief has been paid in. This charge may be waived if you or your employer are making regular contributions to the insured arrangement when you decide to self invest. Annual Management Charge (AMC). This will be shown as a percentage value plus VAT of self invested assets a year (minimum 100 plus VAT a year, maximum 375 plus VAT a year). We will deduct this from your Member s SIPP bank account when you initially self invest and annually after that. When you join through a share contribution, the charge will be deducted after basic rate tax relief has been paid in. External charges: There may be charges in addition to our product charges mentioned opposite. It is important that you understand the following charges that may affect your share contribution: Stamp Duty, payable to HMRC. This is payable at the rate of 0.5% on all purchases of UK shares and share transfers into the scheme. Important where you transfer shares in specie from an HMRC Approved Share Scheme (SAYE/ SIP) within 90 days of the exercise date, you do not have to pay stamp duty. You should be aware that the charges associated with Self Investment may be high in comparison to the amount you choose to invest. For full details of all the potential charges, please read the WorkSave Pension Plan Fees and Charges schedule. 7

8 Example: Year 1 charges: 5, = 5,000 share contribution (tax relief of 1,000 will be added to your Member s SIPP bank account) This example assumes the shares are being transferred from an HMRC approved SAYE/SIP scheme. Installation Charge (one off charge of 200 plus VAT) (this charge may be waived if you or your employer are making regular contributions to the insured arrangement when you decide to self invest). 240 Annual Management Charge (AMC) at 0.5% plus VAT a year (minimum of 100 plus VAT with a maximum of 375 plus VAT) 120 Standard Account Charge to cover the cost of managing your company shares ( 20 plus VAT) per quarter 96 Total 456 These figures are based on the Installation Charge as at April 2018, an example Annual Management Charge and a VAT rate of 20% (tax year 2018/2019). In certain circumstances we may need to make changes to these charges or introduce new ones. You can find full details in your Member s booklet. What about tax? There are some specific references to tax on page 5 of this document in the Approved share schemes: section. The tax position is also explained in the WorkSave Pension Plan Key Features document. In addition, you might have to pay Capital Gains Tax (CGT) on share contributions at the point of contribution. The CGT allowance for the 2018/2019 tax year is 11,700. Please be aware that this amount may change for future tax years. If you re unsure about whether this product is right for you, we recommend you speak to a financial adviser. They may charge you for any advice they give you. Any growth in your pension fund is free of UK Income Tax and Capital Gains Tax (CGT). However, we cannot reclaim the tax paid on dividends from UK companies. 8

9 What are my options? How do I change my investments? You can call us or your investment requests to us. We ll then instruct our stockbroker to sell and/or buy your chosen assets. If you would like to change your investment and invest in our range of insured funds, we ll transfer the cash proceeds from the sale of your chosen self-invested assets and buy units in your chosen insured funds. When we buy or sell assets we follow our Order Execution policy to help get the best possible result for you. Where are my self-invested assets held? For the majority of self-invested assets, the custodian of those assets will be the third party they are purchased through and not Legal & General. Our nominated stockbroker is Stocktrade. Stocktrade is a division of Alliance Trust Savings (ATS), a wholly owned subsidiary of Alliance Trust PLC. If you would like to make a change to your investments or request a copy of our Order Execution policy you ll need to contact us by at worksave@landg.com or call our specialist helpline on Call charges will vary. We may record and monitor calls. Every year we ll produce a statement of your self invested assets for you showing how much has been paid in and what your pension pot is worth. This will be sent to you annually in the post. Can I make additional contributions? Yes. You can send us a cheque at any time or if allowed by your employer you can make a contribution through their payroll system. You will need to contact us by at worksave@landg.com or call our helpline on to tell us where you would like to invest the money. You can also make more share contributions if you wish. Can I change my mind? If you have joined by making a share contribution, you can cancel your application to invest your shares within 30 days of receiving your cancellation notice. We ll sell your shares and return the value of those shares when we receive your cancellation. We will deduct any fees that apply. This means that you may not receive back the value of your original net investment. You can cancel your share contribution, without cancelling your membership of the plan. If the share value is higher when you cancel, this could affect the amount of CGT you may have to pay. If you do not take this opportunity to cancel your share contribution and you want to do so at a later stage, you won t be able to get any money back until you are able to access your pension pot. Any additional share contributions cannot be cancelled once these have been received and applied to your plan. You can find more information about cancellation in the WorkSave Pension Plan Key Features document. 9

10 Example illustrations Introduction You ll have a number of options when you access your pension pot (please see your WorkSave Pension Plan Key Features document). These illustrations have been created to give you an indication of what an annuity income might look like. What might I get back from my plan? Over the following pages, we ve given you some examples to show you what your pension pot and initial pension income may be worth, in today s terms, assuming inflation remains constant at 2.50% every year until you retire. Inflation reduces the worth of all savings and investments and will also reduce the buying power of your pension from that point. Using these examples, and the personal illustration you will be sent after you join, you can think about your own goals: Will the amount that you re saving be enough to give you the pension income that you want or need when you retire? If not, then you may want to consider increasing what you pay into your pot and/ or accessing your pension pot at a later date. As well as showing you what you might get from your pot in today s terms, we also explain how our charges could impact what your pension pot is worth. The illustrations show how inflation, our charges and investment performance affect your initial pension. Please remember that these are just examples and the exact amount you ll get will depend on a number of things including: The actual contributions paid into your pension plan How your investments perform The actual charges taken from your pension plan The cost of buying a pension income (called an annuity ) when you retire How and when you choose to access your pension pot. These figures take into account an assumption for the effect of inflation of 2.50% a year. This shows the value of money in real terms to give you an indication of how much a sum of money in the future would be worth today and is known as the buying power. Inflation will reduce the buying power of your pension pot. How do I use the illustrations? There are three examples. Each one is based on a different share contribution with added tax relief. The examples are for: 1. Share contribution 6,000 plus 1,500 tax relief (page 13 to page 16) 2. Share contribution 8,000 plus 2,000 tax relief (page 17 to page 20) 3. Share contribution 12,000 plus 3,000 tax relief (page 21 to page 24) You should think about how much is going to be paid into your pension plan and how long it will be before you access your pension pot. 10

11 These illustrations assume that any tax relief received on your contribution will be paid in to your Member s SIPP bank account at outset. They assume it will then be immediately invested in the same company shares. Tax relief is added to your net contribution to give the gross figure. These varying examples may help you make a more informed decision about whether to self invest. Important The projected figures in the examples illustrate what your pension benefits could be worth in the future. You may get back more or less than this. What do the illustrations show me? Each example is broken into two sections: 1. The first section is called What might my pension pot be worth when I start to access it? Here, you will see a series of tables that show you what could happen to your pension plan over various periods of time and what you might get back at the end. We show what you might receive in today s terms if you were to contribute to your pension plan today starting at four different ages: 25, 35, 45 and 55. There are many ways that you can take your pension benefits. Here we show examples for two options. The first option shows examples of what you might get if you were to use all your pension pot to buy an annuity. The second option shows examples of what you might get if you choose to take 25% of your pension pot as a tax-free cash sum and use the rest to buy an annuity. In each share contribution example, we have shown what pension income you might receive if you remain invested in your employer s shares. To show what you might get back, we ve used three different growth rates: a lower rate, a mid rate and a higher rate. Each of these rates has been reduced to allow for the effects of inflation, which can mean that we use negative assumed growth rates. You can see what these rates are in the table below. When a negative sign is shown in front of a growth rate, it means that the assumed return on the investment will not keep pace with inflation. In other words, the buying power of your pension pot will decrease. Type of Investment Lower rate Mid rate Higher rate Shares 0.5% 2.4% 5.4% 2. The second section of each example is called How will the charges affect what my pension pot is worth? Here we show how the value of your pension pot will be affected by the various charges. There are two columns showing what your pot could be worth: The first shows what the value of your pension pot could be if there were no charges The second shows what the value of your pension pot could be when our charges are taken. 11

12 For each example, we have assumed the following: That the rate of all charges taken from your plan will remain the same throughout the term of your pension plan. A rate of inflation of 2.50% a year that will remain constant at this level. The growth rates used have been reduced to take into account the effect of inflation. That you will take your pension benefits when you reach State Pension age. For the purposes of this illustration we have used age 67. Your own State Pension age may be different as it s based on your gender and date of birth. You can find out more by going to gov.uk/state-pension-age. However, please remember that you can choose to take this income any time from age 55 but the sooner you take your pension benefits, the less time there will be for your pension pot to build up both from any potential investment growth and further contributions. If you buy an annuity, the income you receive will be paid for longer which is taken into account in calculating your annuity. All of these factors will reduce the size of annuity you will receive. That you will remain invested in your employer s shares throughout the duration of your pension plan. That there have been no previous contributions to the plan. That share contributions are made from an approved share scheme within 90 days following exercise. That tax relief can be added to the share contribution so that the gross amount is treated as one investment in shares. We have also assumed that when you start to access your pension pot: You will buy a pension income (an annuity) that will be paid at the start of each month, for the rest of your life and for no less than five years. Your annuity payment will remain the same each year in actual terms, so when allowing for inflation it will fall in real terms. When you die, no income will be paid to any surviving spouse or registered civil partner. When you do come to access your pension pot you ll have a number of options. You ll be offered free and impartial guidance from an independent government backed service called Pension Wise to help you understand your options. You will be offered an appointment either face to face or over the phone. For more information, visit pensionwise.gov.uk or call

13 Example 1 Total contribution: 7,500 (includes 1,500 tax relief) In this example we have assumed that your total share contribution including tax relief will be 7,500. The charges that we ve applied are those that we described on page 8. What might my pension pot be worth when I start to access it? The table below shows how much your pension pot might be worth if you choose to retire at 67. If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate Total projected pension pot of: 25th birthday 636 6,980 29,800 35th birthday 1,630 6,760 20,200 45th birthday 2,930 6,720 14,000 55th birthday 4,600 6,840 9,970 Please remember that: These are examples and are not the minimum or maximum amounts that you could get back. It is possible that the value of the investment in your plan could go down. This means that you could get back less than you paid in. The lower, mid and higher growth rates that we ve used are shown in the table on page 11. All of the figures within the table take into account the effect of inflation and charges. Every year we ll send you a statement of your self invested assets showing how much has been paid in and what your pension pot is worth. 13

14 The figures in the tables have been adjusted using an assumption for inflation of 2.50% a year to help show what your pension pot and initial annuity may be worth, in today s terms, assuming inflation remains constant every year until you retire. Your total projected pension pot could provide you with: If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate Option 1 A full pension every year for your lifetime of: 25th birthday ,750 35th birthday ,210 45th birthday th birthday OR If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate Option 2 A tax-free cash sum of: 25th birthday 159 1,740 7,450 35th birthday 409 1,690 5,070 45th birthday 733 1,680 3,500 55th birthday 1,150 1,710 2,490 25th birthday ,310 PLUS a pension every year for your lifetime of: 35th birthday th birthday th birthday

15 How will the charges affect what my pension pot is worth? The table below shows what your pension pot might be worth at the end of the first, third, fifth and final year after contributing to your plan. The charges that we ve used are those that we described on page 8. At the end of year If you start your plan on your Total paid in to date WHAT YOUR PENSION POT COULD BE WORTH If no charges are taken After our charges are taken 1 25th, 35th, 45th or 55th birthday 7,500 7,680 7, th, 35th, 45th or 55th birthday 7,500 8,060 7, th, 35th, 45th or 55th birthday 7,500 8,460 7,030 25th birthday 7,500 20,600 6,980 When you open your pension pot at age 67 35th birthday 7,500 16,200 6,760 45th birthday 7,500 12,700 6,720 55th birthday 7,500 10,000 6,840 All of the figures within the last two columns of the table take into account the effect of inflation. The figures above use a growth rate that takes into account the mid growth rate. These growth rates are shown in the table on page 16. Additionally, the charges we ve taken into account in the last column of the table above effectively reduce the investment growth rate each year. These reduced rates are also shown in the table on page

16 If you started your plan on your Investment growth rate Reduced growth rate after our charges are taken 25th birthday 2.4% 0.2% 35th birthday 2.4% 0.3% 45th birthday 2.4% 0.5% 55th birthday 2.4% 0.8% WARNING The charges mean that the value of your pension pot could be less than has been paid in. If a negative growth rate is shown above, as a result of taking into account the effect of the total charges, it means that, in the particular illustration scenario(s), investment growth will not keep pace with the charges being taken out of your pension pot. This is after allowing for the effect of inflation. 16

17 Example 2 Total contribution: 10,000 (includes 2,000 tax relief) In this example we have assumed that your total share contribution including tax relief will be 10,000. The charges that we ve applied are those that we described on page 8. What might my pension pot be worth when I start to access it? The table below shows how much your pension pot might be worth if you choose to retire at 67. If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate 25th birthday 2,670 13,400 49,600 Total projected pension pot of: 35th birthday 3,770 12,100 32,300 45th birthday 5,180 10,900 21,600 55th birthday 6,950 10,100 14,600 Please remember that: These are examples and are not the minimum or maximum amounts that you could get back. It is possible that the value of the investment in your plan could go down. This means that you could get back less than you paid in. The lower, mid and higher growth rates that we ve used are shown in the table on page 11. All of the figures within the table take into account the effect of inflation and charges. Every year we ll send you a statement of your self invested assets showing how much has been paid in and what your pension pot is worth. 17

18 The figures in the tables have been adjusted using an assumption for inflation of 2.50% a year to help show what your pension pot and initial annuity may be worth, in today s terms, assuming inflation remains constant every year until you retire. Your total projected pension pot could provide you with: If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate Option 1 A full pension every year for your lifetime of: 25th birthday ,920 35th birthday ,940 45th birthday ,320 55th birthday OR If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate Option 2 A tax-free cash sum of: 25th birthday 667 3,360 12,400 35th birthday 944 3,020 8,080 45th birthday 1,290 2,740 5,400 55th birthday 1,730 2,540 3,660 25th birthday ,190 PLUS a pension every year for your lifetime of: 35th birthday ,450 45th birthday th birthday

19 How will the charges affect what my pension pot is worth? The table below shows what your pension pot might be worth at the end of the first, third, fifth and final year after contributing to your plan. The charges that we ve used are those that we described on page 8. At the end of year If you start your plan on your Total paid in to date WHAT YOUR PENSION POT COULD BE WORTH If no charges are taken After our charges are taken 1 25th, 35th, 45th or 55th birthday 10,000 10,200 9, th, 35th, 45th or 55th birthday 10,000 10,700 9, th, 35th, 45th or 55th birthday 10,000 11,200 9,850 25th birthday 10,000 27,500 13,400 When you open your pension pot at age 67 35th birthday 10,000 21,600 12,100 45th birthday 10,000 16,900 10,900 55th birthday 10,000 13,300 10,100 All of the figures within the last two columns of the table take into account the effect of inflation. The figures above use a growth rate that takes into account the mid growth rate. These growth rates are shown in the table on page 20. Additionally, the charges we ve taken into account in the last column of the table above effectively reduce the investment growth rate each year. These reduced rates are also shown in the table on page

20 If you started your plan on your Investment growth rate Reduced growth rate after our charges are taken 25th birthday 2.4% 0.7% 35th birthday 2.4% 0.6% 45th birthday 2.4% 0.4% 55th birthday 2.4% 0.2% WARNING The charges mean that the value of your pension pot could be less than has been paid in. If a negative growth rate is shown above, as a result of taking into account the effect of the total charges, it means that, in the particular illustration scenario(s), investment growth will not keep pace with the charges being taken out of your pension pot. This is after allowing for the effect of inflation. 20

21 Example 3 Total contribution: 15,000 (includes 3,000 tax relief) In this example we have assumed that your total share contribution including tax relief will be 15,000. The charges that we ve applied are those that we described on page 8. What might my pension pot be worth when I start to access it? The table below shows how much your pension pot might be worth if you choose to retire at 67. If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate 25th birthday 6,740 25,200 89,300 Total projected pension pot of: 35th birthday 8,050 21,900 55,900 45th birthday 9,670 19,100 36,100 55th birthday 11,600 16,800 23,800 Please remember that: These are examples and are not the minimum or maximum amounts that you could get back. It is possible that the value of the investment in your plan could go down. This means that you could get back less than you paid in. The lower, mid and higher growth rates that we ve used are shown in the table on page 11. All of the figures within the table take into account the effect of inflation and charges. Every year we ll send you a statement of your self invested assets showing how much has been paid in and what your pension pot is worth. 21

22 The figures in the tables have been adjusted using an assumption for inflation of 2.50% a year to help show what your pension pot and initial annuity may be worth, in today s terms, assuming inflation remains constant every year until you retire. Your total projected pension pot could provide you with: If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate Option 1 A full pension every year for your lifetime of: 25th birthday 241 1,170 5,270 35th birthday 297 1,040 3,360 45th birthday ,220 55th birthday ,490 OR If you start your plan on your IF YOUR PENSION POT GROWS EACH YEAR AT Lower rate Mid rate Higher rate Option 2 A tax-free cash sum of: 25th birthday 1,680 6,300 22,300 35th birthday 2,010 5,470 13,900 45th birthday 2,410 4,780 9,040 55th birthday 2,910 4,210 5,950 25th birthday ,950 PLUS a pension every year for your lifetime of: 35th birthday ,520 45th birthday ,660 55th birthday ,110 22

23 How will the charges affect what my pension pot is worth? The table below shows what your pension pot might be worth at the end of the first, third, fifth and final year after contributing to your plan. The charges that we ve used are those that we described on page 8. At the end of year If you start your plan on your Total paid in to date WHAT YOUR PENSION POT COULD BE WORTH If no charges are taken After our charges are taken 1 25th, 35th, 45th or 55th birthday 15,000 15,300 14, th, 35th, 45th or 55th birthday 15,000 16,100 15, th, 35th, 45th or 55th birthday 15,000 16,900 15,400 25th birthday 15,000 41,200 25,200 When you open your pension pot at age 67 35th birthday 15,000 32,400 21,900 45th birthday 15,000 25,400 19,100 55th birthday 15,000 20,000 16,800 All of the figures within the last two columns of the table take into account the effect of inflation. The figures above use a growth rate that takes into account the mid growth rate. These growth rates are shown in the table on page 24. Additionally, the charges we ve taken into account in the last column of the table above effectively reduce the investment growth rate each year. These reduced rates are also shown in the table on page

24 If you started your plan on your Investment growth rate Reduced growth rate after our charges are taken 25th birthday 2.4% 1.2% 35th birthday 2.4% 1.2% 45th birthday 2.4% 1.1% 55th birthday 2.4% 1.0% WARNING The charges mean that the value of your pension pot could be less than has been paid in. If a negative growth rate is shown above, as a result of taking into account the effect of the total charges, it means that, in the particular illustration scenario(s), investment growth will not keep pace with the charges being taken out of your pension pot. This is after allowing for the effect of inflation. 24

25 Other information Who are Alliance Trust Savings? Alliance Trust Savings (ATS) has been providing investment services to clients since It is authorised by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority under reference number You can find out more about ATS and the services it offers by visiting alliancetrustsavings.co.uk Who regulates you? Legal & General (Portfolio Management Services) Limited is authorised and regulated by the Financial Conduct Authority (FCA). We are entered on their register under number You can check this on the Financial Services Register by visiting the Financial Conduct Authority s website fca.org.uk/register or by contacting the Financial Conduct Authority on Which law or language do you work in? The information that we ve included in this document is based on our understanding of current law relating to pensions in the UK. The contract is governed by the laws of England and Wales. If you live in Scotland you can bring legal proceedings in either the Scottish or English courts. If you live in Northern Ireland you can bring legal proceedings in Northern Irish or English Courts. If you are resident outside of the UK or Northern Ireland any proceedings you bring will need to be in your employer s jurisdiction. The terms and conditions and all communications are only available in English. We will usually communicate with you by letter or telephone. How do I make a complaint? If you have a complaint, we can give you a leaflet that sets out how we handle complaints. Please call our member helpline on Call charges will vary. We may record and monitor calls. Lines are open between the hours of 8.30am and 7pm Monday to Friday and 9am to 12 midday Saturday. The address you should write to is shown on page 28. If you would like a copy of this or any other item of our literature in larger print, Braille or in audio format, please contact us at: Workplace DC Pensions Legal & General Brunel House 2 Fitzalan Road Cardiff CF24 0EB 25

26 Compensation The Financial Services Compensation Scheme (FSCS) is designed to pay customers compensation if they lose money because an authorised firm cannot meet its obligations and therefore fails. Your ability to claim and the amount will depend on the specific circumstances of your claim. With Self Investment, the level and basis of compensation you receive will depend on the underlying assets that you are invested in. The following are examples of how some of the different limits apply for some of the types of investment you might hold within your WorkSave Pension Plan. You should refer to any product literature from the provider of the asset you are investing in for more detail about the compensation arrangement for that asset. What happens if a company I am invested in cannot meet its financial obligations? Shares are not covered by the FSCS. If you choose to invest in any single company share within your WorkSave Pension Plan and that company fails, you would not receive any compensation. What happens if a unit trust manager cannot meet its financial obligations? Unit Trusts are covered by the FSCS. Therefore, if the unit trust manager was unable to meet its obligations and you have a loss as a result, you may be entitled to compensation. Under current limits, this would mean that you might be able to claim compensation for up to 50,000 for any loss incurred. Your Member s SIPP bank account Money held in a Bank of Scotland bank account within your WorkSave Pension Plan is covered by the FSCS. Therefore, if the bank were to fail, and you have a loss as a result, you may be entitled to compensation. Under current limits, this would mean that you might be able to claim compensation of up to 85,000 for any loss incurred. Please also refer to the WorkSave Pension Plan Key Features document for details of the compensation arrangements if we, as your WorkSave Pension Plan product provider were to fail. For further information about the FSCS (including amounts and eligibility to claim) please refer to their website FSCS.org.uk or call them on What about any money held with Stocktrade? Stocktrade is a division of Alliance Trust Savings (ATS), a wholly owned subsidiary of Alliance Trust PLC. Alliance Trust Savings is authorised by the Prudential Regulation Authority to take cash deposits. Alliance Trust Savings will only hold cash temporarily, for example, following settlement of trades prior to this being returned to your Member s SIPP bank account with Legal & General. If however the bank were to fail and you had suffered a loss as a result, you may be entitled to compensation. Under current limits, this would mean that you might be able to claim compensation of up to 85,000 for any loss incurred. 26

27 Terms explained 27 Annuity An annuity is a product that provides you with a pension income when you come to take your benefits. You can use the value of your pension pot to buy an annuity from us or another annuity provider. You will then receive an income for the rest of your life or for a fixed term. How much income you ll get depends on a number of things including how much your pension pot is worth and the annuity rate at the time you come to buy one. Don t forget that you can buy an annuity from whichever provider you choose and it pays to shop around for the right deal for you. Assets These are investments held in your pension plan and could include shares, unit/investment trusts, deposit accounts and any other allowable investments within the pension plan, including the Member s SIPP bank account. Custodian A custodian is a company which holds members investments for safekeeping on behalf of the pension scheme trustees. In specie This is a Latin term meaning in the actual form. Transferring an asset in specie means to transfer ownership of that asset from one person/company/entity to another person/company/entity in its current form, i.e. without the need to convert the asset to cash. Insured funds An insured fund is a type of investment offered and managed by a life assurance company and where the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) where applicable must authorise the fund managers. Lifestyle profile This is an investment strategy that automatically adjusts where your pension pot is invested as you approach your selected retirement age. A typical lifestyle profile is designed to offer the potential for growth in the long term but as you get closer to retirement, your money is gradually moved into funds that are more stable. The investment strategy can also be targeted to suit a particular retirement outcome. Member s SIPP bank account When you decide to self invest we ll set up a cash account within your pension plan called a Member s SIPP bank account. This account holds any money that you have not instructed us to invest, including: Cash contributions for self investment Tax relief from self investment contributions Any income arising from self investment (for example share dividends) Charges for self investment are also deducted from this account. Mid market price When shares are valued two prices are often quoted. The offer price is the price at which shares can be bought and the bid price is the price at which shares can be sold. The mid market price is the mid-way point between the bid and the offer prices. Pension pot Your pension pot is the value of the total amount of money that you have in your plan. From age 55 you can access your pension pot and use the money you ve built up over the years to provide an income, cash lump sums or a combination of both.

28 Contact us If you would like a copy of this or any other item of our literature in larger print, Braille or in audio format, please contact us at: employerdedicatedteam@landg.com Workplace DC Pensions Legal & General Brunel House 2 Fitzalan Road Cardiff CF24 0EB Call charges will vary. We may record and monitor calls. Lines are open between the hours of 8.30am and 7pm. Monday to Friday and 9am to 12 midday Saturday. Legal & General (Portfolio Management Services) Limited Registered in England and Wales No Registered office: One Coleman Street, London EC2R 5AA We are authorised and regulated by the Financial Conduct Authority. W /18 SUB192109