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1 > > > BARNETT WADDINGHAM SELF INVESTED PERSONAL PENSION This is an important document that provides a summary of the. You should read it carefully before deciding whether to invest in the. This document should be read in conjunction with any Illustration, Terms and Conditions, Application Form, Glossary, Schedule of Fees and Allowable Investment Schedule, all of which you should have received.

2 CONTENTS What you should know before you apply... 3 PAGE aims... 3 Your commitment... 4 Risk factors... 4 Questions and Answers... 5 General information about the... 5 Contributions and tax relief... 6 Banking arrangements... 7 Investments... 7 Retirement benefits... 8 Death benefits... 9 Cancellation... 9 Other Information...10 Contact details...11 Page 2 of 12

3 WHAT YOU SHOULD KNOW BEFORE YOU APPLY What is the purpose of this document? This document provides an important summary to help you decide whether you want to invest in the Barnett Waddingham Self Invested Personal Pension. A series of questions and answers is included to help you with your decision. Throughout this document, words or phrases which are shown in bold italics are explained in the separate Glossary which you should refer to when reading this document. You should read this document carefully so that you understand what you are applying for, and then keep it in a safe place for future reference. What is a SIPP? A SIPP (a self invested personal pension scheme) is a type of pension plan that allows you to direct how your pension monies are invested. If you have a financial adviser, your adviser is responsible for the selection and management of the underlying investments. Otherwise, this is your responsibility. A SIPP also gives you flexibility on how and when you take your retirement benefits. What is the? The is a SIPP provided by BW SIPP LLP. It is a registered pension scheme and is governed by a trust deed and rules. A copy of the trust deed and rules is available from us on request. BW SIPP LLP is the operator of the and is authorised and regulated by the Financial Conduct Authority (FCA), the independent financial services regulator. Where we refer to us or we in this document, we mean BW SIPP LLP as the operator. BARNETT WADDINGHAM SELF INVESTED PERSONAL PENSION AIMS The is intended to: Offer you a tax-efficient and flexible way of saving for retirement. Allow you access to a wide range of investments. Pay benefits to you at any age from age 55, or on earlier ill-health. Use any remaining funds on your death to pay benefits to your beneficiaries. Treat you fairly in all our dealings with you. Page 3 of 12

4 YOUR COMMITMENT You must: Satisfy yourself that we will allow the investments that you want to make in your Barnett Waddingham SIPP. Act as co-trustee of your Barnett Waddingham SIPP jointly with BW SIPP Trustees Limited, which is the asset trustee of the. Appoint a financial adviser to advise you how to invest your Barnett Waddingham SIPP funds, or direct how your Barnett Waddingham SIPP funds are to be invested yourself. Accept and comply with the Terms and Conditions of the (as may be amended from time to time). Respond promptly to our requests for information, such as when paying contributions, making investments or accessing/ reviewing benefits. Notify us of any changes to your personal circumstances which may affect your Barnett Waddingham SIPP. Be personally responsible for any charges relating to your Barnett Waddingham SIPP that we cannot deduct from your Barnett Waddingham SIPP. RISK FACTORS The value of your Barnett Waddingham SIPP may go down as well as up and is not guaranteed. Past performance is no indication of future performance. At any point, including on retirement and within the cancellation period, the value of your Barnett Waddingham SIPP may be lower than the amount invested. Some investments may be difficult to sell, for example commercial property and unquoted shares, and it may take time to realise the value of these investments. The returns on your Barnett Waddingham SIPP from underlying investments may be lower than shown on any illustration you have received from the investment provider. Your Barnett Waddingham SIPP can accept a wide range of investments, each with their own inherent risks. You should seek specialist advice from a suitably qualified and regulated individual. We are unable to provide any legal, financial, investment or tax advice in connection with your Barnett Waddingham SIPP. The benefits payable are not guaranteed and may be lower than expected if investment returns are poor, if you access benefits earlier than you had expected, or if you stop paying regular contributions. If you transfer funds from another pension scheme to your Barnett Waddingham SIPP, the eventual benefits that you take may not be comparable. Our charges may change in future. We will notify you in advance if we increase our charges. If there is insufficient cash and investments in your Barnett Waddingham SIPP to meet any charges relating to your Barnett Waddingham SIPP, you will be liable to meet the shortfall personally. Future changes to pensions and tax legislation may affect the benefits that you can take from your Barnett Waddingham SIPP. The above risks are not exhaustive and are based on our understanding of current legislation which may be subject to change. Page 4 of 12

5 QUESTIONS AND ANSWERS General information about the Am I eligible for a Barnett Waddingham SIPP? All UK residents and UK taxpayers are eligible regardless of age or employment status, but the Barnett Waddingham Self Invested Personal Pension is not normally suitable if your pension fund is less than 50,000. Also, personal tax relief on contributions paid to your Barnett Waddingham SIPP is not available if you are 75 or over. How flexible is the? The is a comprehensive and flexible SIPP. Apart from bearing in mind that the is generally not suitable for a fund of less than 50,000, there are no minimum contribution levels, no requirements for a minimum level of investment and, if you are eligible, no cap on how much income you can draw from your Barnett Waddingham SIPP when you reach pension age. In 2013, Defaqto awarded the a 5-star rating denoting that it offers a comprehensive range of features, options and benefits. Defaqto is an independent financial research company specialising in rating, comparing and analysing financial products. Is the a stakeholder pension? No. Stakeholder pensions must meet minimum government standards covering matters such as contributions and charges. A stakeholder pension may meet your needs as well as the and may have lower charges. How much does it cost? There is a set up charge, an annual administration fee and ancillary costs relating to your investment choices and other transactions. These are set out in the Schedule of Fees which you should read carefully. If you have a financial adviser, your adviser s fees may be met directly from your Barnett Waddingham SIPP. You may also incur additional fees in respect of your investments or from other professional advisers. Our charges are usually deducted from the cash in your Barnett Waddingham SIPP. If there is insufficient cash, you must either pay in extra cash or instruct us which assets to sell to meet the charges. If we are unable to disinvest assets, or if there are insufficient assets in your Barnett Waddingham SIPP to meet any outstanding charges, costs or expenses, we will take all steps that we consider reasonable to recover the shortfall from you personally. How do I apply? You will need to complete a paper application form and supplementary paperwork which you can obtain from or from your financial adviser. Can I transfer other pension plan funds to my Barnett Waddingham SIPP? You can transfer other pension plan funds to your Barnett Waddingham SIPP with our consent. If you have appointed a financial adviser, you should consult with him/her before deciding to transfer. Transfers must be from a registered pension scheme or a recognised overseas pension scheme and can be made in cash or in specie. Page 5 of 12

6 How will you look after my Barnett Waddingham SIPP? Your personal Barnett Waddingham SIPP is an individual SIPP issued under the Barnett Waddingham Self Invested Personal Pension. You will be a trustee of your Barnett Waddingham SIPP with the asset trustee. This approach allows you to have more control over your Barnett Waddingham SIPP and its underlying investments. We are authorised and regulated by the FCA and are responsible for administering and running the Barnett Waddingham Self Invested Personal Pension on a day-to-day basis. Contributions and tax relief How much can I pay in each year and what are the tax implications? Tax relief is available on personal contributions if you are a relevant UK individual, typically being someone who is resident in the UK for tax purposes at some point during the tax year or who otherwise has relevant UK earnings subject to UK income tax. Relevant UK earnings are normally total taxable earnings from UK employment and/or self-employment and do not include non-earned income such as dividend income or other investment income. Tax relief can be claimed on personal contributions up to 100% of your relevant UK earnings for the tax year or the basic amount ( 3,600 for 2013/14) if higher. HM Revenue & Customs (HMRC) sets a limit to restrict the tax relief that is available to individuals on an annual basis which is called the annual allowance (AA). Personal contributions include contributions made by you personally, as well as those made by a spouse, partner or employer. Employer contributions are paid gross (with any tax relief available claimed by the employer) so there is no need for us to claim the tax relief on your behalf. Contributions are usually collected by direct debit or direct bank transfer, but you can also contribute assets. These must be agreed with us in advance and a strict process must be followed. Additional fees will be incurred. It may be less expensive to sell and buy back stocks rather than contributing them as assets. There is a limit on the value of retirement benefits that you can accumulate and draw from registered pension schemes before additional tax charges designed to cancel out tax relief apply. This is called the lifetime allowance (LTA). It is your responsibility to monitor whether your contributions will exceed the AA or the LTA. You must tell us within 30 days if you are no longer entitled to tax relief on your contributions. How do I get the tax relief? We will claim any basic rate relief you are entitled to directly from HMRC. Currently this means that for each 80 that you personally contribute, we will claim 20 on your behalf and credit this to your Barnett Waddingham SIPP. It typically takes 6 to 11 weeks for the claim to be paid (although HMRC sometimes audit tax relief claims which might result in the tax relief being credited later than expected). If you pay tax at higher than basic rate, you are responsible for claiming any additional tax relief through your self assessment tax return. What happens if I exceed the AA? If you exceed the AA, you may be able to carry forward any unused AA from the previous three tax years. If you are able to do this, the full amount paid must be within your relevant UK earnings for the tax year in which the payment is made. If having made use of carry forward you still exceed the AA, you will have to pay a tax charge on the excess. The tax charge will be based on the marginal rate of tax relief due on the contribution and is paid by submitting a self assessment tax return to HMRC. You are responsible for this, as you may have multiple pension arrangements. Page 6 of 12

7 Banking arrangements We have pooled accounts in our name with our chosen bank which are used collectively for all Barnett Waddingham Self Invested Personal Pension members. One of these accounts is a pooled cash account in which we hold cash as client money in accordance with FCA requirements. Interest on any cash that you hold in the pooled cash account is paid tax-free, currently at a rate of 0.20% below Bank of England base rate. Our chosen bank pays commission to us, currently at a rate of 0.25% of the total cash deposits held in the pooled accounts. Our chosen bank also pays interest to us, currently at a rate of 0.20% below Bank of England base rate, on cash held in the pooled accounts, except for the pooled cash account. You may also have a current account with our chosen bank or another bank of your choice, which is held in the joint names of yourself and the asset trustee. Interest is paid tax-free on the cash held in a current account with our chosen bank in the same way as it is paid on cash in the pooled cash account, currently at a rate of 0.20% below Bank of England base rate. Our chosen bank currently pays commission to us at the rate of 0.25% of the total cash deposits held in its current accounts. The banks on our banking panel pay us commission for certain deposit types. Full details are given on our website. You will need to ensure that there is sufficient cash in the pooled cash account or in your current account if you have one to meet the day to day liabilities of your Barnett Waddingham SIPP, for example for administration fees, mortgage payments and drawdown pension payments. We reserve the right to change our chosen bank or our banking arrangements at any time. If we do, we will provide the relevant details on our website and will give you written notice if we change our chosen bank. Investments Where is my money invested? Money will remain invested in cash in the pooled cash account, or in your current account if you have one, until you inform us how you wish to invest it. This includes any tax relief received after you have invested your net contributions. We will check that the investments you select are legally allowed and, for non standard investments, that they pass our due diligence requirements. Common investments selected are stocks and shares, investment funds, commercial property and land. Purchase of residential property (except for exempted property) and personal borrowing from your Barnett Waddingham SIPP are not allowed. Please be aware that we are not able to buy and sell shares on your behalf. You will need to use a stockbroker or access an on-line share dealing platform in order to buy and sell shares through your Barnett Waddingham SIPP. It is important that you read the Allowable Investment Schedule to satisfy yourself that we will be able to hold the investments you choose. If you have not already received a copy of this, please contact us before proceeding. How are the investments taxed? Investments grow free of UK capital gains tax and income is paid free of UK income tax. The key exceptions to this are tax on UK dividends which cannot be reclaimed and profits from being a member of a property investment LLP. Page 7 of 12

8 How will I know how my Barnett Waddingham SIPP is performing? We will send you a statement each year showing the value of your Barnett Waddingham SIPP fund. You can request additional valuations during the year but there may be an extra charge for this. You are usually able to obtain valuations of the underlying investments directly from the relevant investment providers. We accept no responsibility for the performance of your selected investments or for any liabilities which may be associated with them. Neither we nor the asset trustee will be liable to you for any claims, costs, expenses or losses arising to your Barnett Waddingham SIPP and its underlying investments as a result of any loss on the investments in your Barnett Waddingham SIPP. Retirement benefits When can I take my money out? You can only normally take benefits (a process known as vesting) once you have reached age 55, but you may be able to do so earlier on grounds of ill-health, or if you have a protected pension age which is earlier than age 55. Other than the cancellation periods detailed later in the Can I change my mind? section, there is no further opportunity to cancel your Barnett Waddingham SIPP and have monies returned to you they must be paid out as authorised benefits on retirement or transferred to another UK registered pension scheme (or overseas equivalent). What income can I receive? You can choose to receive income subject to PAYE income tax by purchasing an annuity from an insurance company or by keeping your Barnett Waddingham SIPP invested and drawing from the fund directly, a process known as drawdown pension. There is an annual limit on how much income you can draw unless you meet the conditions for flexible drawdown. In particular, you must have secure pension income of at least 20,000 for the 2013/14 tax year. You should note that if you have taken drawdown pension from any part of your Barnett Waddingham SIPP, you will usually lose the option to receive a serious ill-health lump sum from that part of your Barnett Waddingham SIPP. What lump sum payments can I receive? At vesting you can take a lump sum (normally up to 25% of your fund value) which is currently paid tax-free. If the value of your Barnett Waddingham SIPP at vesting exceeds your available LTA, then different benefit options apply. You can draw the excess as a lump sum less 55% tax. Alternatively, you can pay 25% tax and keep the net funds in your Barnett Waddingham SIPP to provide additional, taxable pension. What benefits might I receive? The benefits that you might receive depend on the value of the investments in your Barnett Waddingham SIPP when you retire. The rate of income available from an annuity or under drawdown pension will depend on a number of factors on top of funds available including some or all of: your age, health and lifestyle, form of pension, spouse s provision and underlying investment yields. We will issue you with a yearly statement which will give you an updated projection of your benefits on a given set of assumptions. These are issued for guidance purposes only and there is no guarantee that your Barnett Waddingham SIPP will be able to provide the illustrated figures. Page 8 of 12

9 Death benefits What happens to my Barnett Waddingham SIPP when I die? When you open your Barnett Waddingham SIPP, we ask you to complete an expression of wishes form nominating the beneficiaries you would like your benefits to be paid to on your death. We will take this into account when deciding to whom your benefits should be paid, but this is not binding on us. Payment of benefits will be made at our discretion and in line with the trust deed and rules. We will write to your beneficiaries giving details of the options available to them. Benefits can be paid as follows: A tax-free lump sum can be paid to your beneficiaries if you die before age 75 and have not taken any benefits from your Barnett Waddingham SIPP. The tax-free amount is only available if paid within two years from the date that we receive notification of your death (and may not be available if you choose assets that cannot be easily sold) and where there is sufficient available LTA. Alternatively, your Barnett Waddingham SIPP funds could be used to pay pension subject to income tax to your dependant(s), either as drawdown pension directly from your Barnett Waddingham SIPP, or by purchasing an annuity. If you have already taken benefits from your Barnett Waddingham SIPP or have yet to do so but have reached age 75, lump sums can still be paid to your beneficiaries but are subject to 55% tax. Alternatively, your Barnett Waddingham SIPP funds could be used to pay pension subject to income tax to your dependant(s), either as drawdown pension or by purchasing an annuity. If you have no dependants, your funds can be paid as a tax-free lump sum to a charity nominated by you. Cancellation Can I change my mind? Once we accept your application, we will send you a cancellation notice and form. You will then have 30 days from the date you receive the cancellation notice to cancel your Barnett Waddingham SIPP and you must confirm this by completing and returning the cancellation form to us. If you cancel your Barnett Waddingham SIPP and have made a cash contribution within the first 30 days that has not been invested, the value of your contribution will be returned to you with any interest that has been paid to you by our chosen bank in respect of your contribution. Interest that has not been paid to you but has accrued on your contribution will not be included. You will not receive a further cancellation period in relation to additional contributions made to your Barnett Waddingham SIPP after the first 30 days following its establishment. We will not act on any investment instructions for non standard investments received from you or your financial adviser until the first 30 day cancellation period has expired, unless you choose to waive the right to cancel and have confirmed this to us in writing. However, we will act on investment instructions received from you or your financial adviser for all other investments within the first 30 days. If you cancel your Barnett Waddingham SIPP and have made an investment within the first 30 days, you will receive back the value of the underlying investment which may be more or less than the initial amount that you invested. You also have 30 days to cancel any transfers made to your Barnett Waddingham SIPP from other pension schemes. If you cancel a transfer, the value of the underlying investments will be returned to the transferring scheme which may be lower than the transfer value received into your Barnett Waddingham SIPP. If the transferring scheme refuses to accept the returned transfer payment, you may select an alternative pension scheme to which the transfer payment can be paid. If you want to make a transfer to your Barnett Waddingham SIPP from a final salary occupational scheme either within the first 30 days or subsequently, we will not request the transfer until the 30 day cancellation period has expired. If you want to make a transfer of any in specie assets to your Barnett Waddingham SIPP either within the first 30 days or subsequently, we will not arrange the transfer until the 30 day cancellation period has expired. If you take drawdown pension either within the first 30 days or subsequently and then change your mind, cancellation rights will apply. You must return any lump sum and income received to us within 30 days from the date you receive the cancellation notice. Page 9 of 12

10 OTHER INFORMATION Law Your Barnett Waddingham SIPP will be governed by English law, and all communications in relation to it will be in English. Can you provide me with advice? We cannot provide you with any legal, financial, investment, tax or any other advice concerning your Barnett Waddingham SIPP or any underlying investments or decisions associated with it. We therefore strongly recommend that you appoint a financial adviser in connection with your Barnett Waddingham SIPP. If you do not have an existing adviser and wish to consider appointing one, you can find advisers in your area at: What do I do if I have a complaint? If you have a complaint regarding your Barnett Waddingham SIPP, please make this by or in writing to us in the first instance. We will provide you with a copy of our complaints handling procedure. Our details are contained in the How to contact us section. If your complaint concerns the administration of your Barnett Waddingham SIPP and you are not satisfied with our response or the way we have handled your complaint, you may refer this to the Pensions Ombudsman. In addition, The Pensions Advisory Service can assist you with how to complain and may be able to resolve matters without the need for the Pensions Ombudsman s involvement. All other complaints may be referred to the Financial Ombudsman Service. Please refer to the Glossary for all the relevant contact details. Making a complaint will not affect your right to take legal proceedings. Financial Services Compensation Scheme (FSCS) BW SIPP LLP is covered by the FSCS. You may be entitled to compensation from the FSCS if we cannot meet our obligations. This depends on the type of business, the relevant FSCS rules and the circumstances of the claim. Your cash in the pooled cash account, and, if you have one, your current account, may also be covered by the FSCS in the event of the failure of our chosen bank or another bank of your choice. The maximum compensation is currently 85,000 for each individual in respect of cash held with our chosen bank and any other banks covered by our chosen bank s FCA authorisation whether the cash is held within your Barnett Waddingham SIPP or personally. You should check the compensation that may be provided by the FSCS in respect of any other bank of your choice. You should note that the eligibility of each claim will be assessed on a case by case basis. In addition, the providers of the underlying investments within your Barnett Waddingham SIPP may also offer a similar benefit but you should check this either directly with each provider concerned or through your adviser. Please refer to the Glossary for the contact details of the FSCS. Page 10 of 12

11 Who regulates the? We are authorised and regulated by the FCA and our registration number is Our permitted business includes the operation and administration of the. You can check the FCA s register by visiting the FCA s website or by contacting the FCA directly. Please refer to the Glossary for the contact details of the FCA. Ownership BW SIPP LLP and BW SIPP Trustees Ltd are wholly owned by Barnett Waddingham LLP. CONTACT DETAILS Our contact details are: sipp@barnett-waddingham.co.uk BW SIPP LLP PO Box 1209 Cheltenham Gloucestershire GL50 9WE Page 11 of 12

12 If you would like to discuss anything relating to the Barnett Waddingham Self Invested Personal Pension please contact us as follows: sipp@barnett-waddingham.co.uk Glasgow October 2013 BW1155 Barnett Waddingham 2013 Barnett Waddingham LLP is a body corporate with members to whom we refer as partners. A list of members can be inspected at the registered office. Barnett Waddingham LLP (OC307678), BW SIPP LLP (OC322417), Barnett Waddingham Investments LLP (OC323081), and Barnett Waddingham Actuaries and Consultants Limited ( ) are registered in England and Wales with their registered office at Cheapside House, 138 Cheapside, London EC2V 6BW. Barnett Waddingham LLP is authorised and regulated by the Financial Conduct Authority and is licensed by the Institute and Faculty of Actuaries for a range of investment business activities. Barnett Waddingham Investments LLP and BW SIPP LLP are authorised and regulated by the Financial Conduct Authority. Barnett Waddingham Actuaries and Consultants Limited is licensed by the Institute and Faculty of Actuaries in respect of a range of investment business activities. Leeds Liverpool Bromsgrove Cheltenham Amersham London Page 12 of 12