FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE PRODUCT GUIDE

FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE PRODUCT GUIDE

FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE CONTENTS What is a SIPP? 3 An introduction to the benefits 4 The benefits explained 6 Product summary 10 Other information 11 How to Apply 11 The FundsNetwork Self Invested Personal Pension is provided by Standard Life. FundsNetwork will act as the distributor of the FundsNetwork Self Invested Personal Pension provided by Standard Life (the SIPP ) and you should send application forms, and any correspondence relating to your SIPP, to FundsNetwork. The Chancellor announced on the 17th March 2004 that simplification of pensions would be introduced. This brochure does not cover details of simplification but the situation as it stands at the time of going to print (October 2005) and up until 6 April 2006. Please talk to your adviser about your pensions choices in the light of the forthcoming changes or if you have a specific question. A PENSION PLAN THAT IS TAILORED TO YOUR NEEDS Your financial adviser is important in helping you decide what type of retirement product is right for you and will provide you with professional advice to match your requirements.

WHAT IS A SIPP? The sole purpose of any pension scheme is to provide retirement and related benefits for its members. In this regard a Self-Invested Personal Pension or (SIPP) is no different to any other pension scheme. A SIPP is different to other personal pensions in that it enables its members to have greater control over a wider choice of investments as well as having improved choice when it comes to taking benefits. A SIPP has the same tax benefits as any other personal pension. The key benefits are described in general terms below. However, please note that limitations may apply and you should speak to your financial adviser for further information. Tax relief on contributions The government encourages you to save towards your pension by giving you tax relief on the money you put in. Capital gains tax Any rise in the value of the scheme's assets between what you put in and what they're worth at the end is called capital gains and is tax-free. Withdrawing funds as a tax-free lump sum When you come to take benefits you may be able to draw out up to a quarter of the value of your pension fund as a tax-free lump sum. IMPORTANT INFORMATION Your pension in retirement will be taxed as earned income. Tax rules and legislation may change. The value of tax relief may change and will depend on your financial circumstances. The information we have given is based on our understanding of law and HM Revenue & Customs practice when we published this document. WHY CHOOSE A SELF INVESTED PERSONAL PENSION? A Self Invested Personal Pension (SIPP) is a personal pension plan where you can: choose when and where to invest your money decide when and how you d like to take your benefits, both before and after retirement make changes to your investments as your circumstances change as you approach retirement FundsNetwork, in association with Standard Life as the product provider, bring you a SIPP that offers exceptional investment choice together with the reassurance that you are benefiting from the combined strengths of two market leaders. The SIPP is more than just a simple personal pension plan, it s a flexible retirement choice that puts you in control. It can grow and adapt with you over many years, as your requirements change as you move towards retirement. The provider of the SIPP, Standard Life, has an award winning pensions administration service that is recognised throughout the industry. Additionally, Standard Life have selected business partners, respected in their own fields, to support you with the options that you may wish to select e.g. purchasing and managing a Commercial Property as part of your portfolio. 3

FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE AN INTRODUCTION TO THE BENEFITS By taking out the SIPP you have the peace of mind of knowing that you have chosen a pension plan that follows your direction and gives you exceptional choice, control and flexibility. FundsNetwork and Standard Life are leaders in their respective fields. This will give you further confidence that your pension is in good hands. TAX There is tax relief on each and every contribution that is made into your SIPP including contributions from 3rd parties There is no tax payable on the capital growth of your pension fund When you come to take benefits you may be able to draw out up to a quarter of the value of your pension fund as a tax-free lump sum Your pension in retirement will be taxed as earned income INVESTMENT The range of funds available to you through the SIPP offers you a comprehensive selection from many respected companies, all in one place, offering you simplicity, choice, and value for money You can choose to invest through your financial adviser or through a chosen stockbroker or through a panel of discretionary investment managers You have the option of investing in commercial property, using the SIPP Business Line. You will be supported by a dedicated property team You have complete freedom to choose all the options that the SIPP offers You have control over the process of making investments and how they are managed INCOME You have greater control over how and when you take your pension income than with other types of pension. Remember though that in most cases the earliest you can start taking a pension income is at age 50 CHARGES Transparent charges ensure value and fairness OTHER BENEFITS You can achieve a greater flexibility over how your dependant(s) will benefit, in the event of your death 4

THE BENEFITS OF THE FUNDSNETWORK AND STANDARD LIFE RELATIONSHIP If you are like most people, you will want to know that your financial future is in good hands. We place a great deal of importance on getting your money to work hard for you, that s why we believe you can have the confidence of knowing that your Pension is distributed by FundsNetwork and provided by Standard Life, both leaders in their respective fields. FundsNetwork and Standard Life are both committed to delivering a service that makes it easy for you to deal with us. So, we ve made our processes simple and given you one point of contact at FundsNetwork, for all enquiries. Throughout the lifetime of your plan, the SIPP Business Line will provide you with expert support whatever direction you decide to take, although we cannot give you pensions or investment advice based on your personal circumstances. A dedicated team will: Place deals or switch money in your chosen investment funds Deal in certain other investments, such as stocks and shares Carry out property transactions Liaise with your financial adviser or your investment manager Provide you with regular information about your plan, including statements, valuations and projections of future value For further information, please read the SIPP Key Features Document (FSIPP17) or contact FundsNetwork. Contact details are included at the end of this guide. Dealings with selected business partners Standard Life have selected a number of business partners who are established as specialists within their professions, and who Standard Life believe, hold similar principles and values to them when it comes to dealing with customers. These business partners provide a range of services to support you with your SIPP. These services include, for example, property solicitors, property administration and advice services, discretionary investment management and execution-only stockbroker services. If you require further information on any of the business partners or their services, please contact your financial adviser or the SIPP Business Line. 5

FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE THE BENEFITS EXPLAINED WHAT CAN I USE MY SIPP FOR? The plan can be used to: Save for retirement Take an income, tax-free lump sum, an annuity, or any of these options during retirement However, you must purchase an annuity by your 75th birthday. THE PLAN STRUCTURE FundsNetwork offers a SIPP product provided by Standard Life. FundsNetwork will act as the distributor of the SIPP, and you should send application forms, and any correspondence once your SIPP has been set up, to FundsNetwork. If you take out a SIPP through us you will become a member of the Standard Life Self Invested Personal Pension Scheme No.2 ( the scheme ). The Standard Life Assurance Company is the provider and administrator of the scheme and Standard Life Trustee Company Limited acts as trustee. AM I ELIGIBLE TO JOIN? You are eligible if you are UK resident and under age 75. HOW MUCH CAN I INVEST? The minimum regular payment is 300 a month, 3,000 a year The minimum single or transfer payment is 10,000 If you wish to withdraw income immediately, you must pay at least 100,000 into the SIPP. WHAT CAN I INVEST IN? You have access to a wide range of investment options, including: Over 1,000 mutual and life funds from some of the most respected investment managers, covering a wide range of sectors Commercial Property Stocks and shares on the UK Stock Exchange A Deposit Account For the full range of permitted investment options please ask your adviser. Your adviser can provide you with fund guides that describe the funds available from FundsNetwork and Standard Life. Remember that the value of stockmarket investments can go down as well as up. Investments in property can be difficult to sell, and the value of property is generally a matter of a valuer's opinion rather than fact. 6

CAN I TRANSFER IN OTHER PLANS? If you are considering transferring in some types of other plans, the SIPP can accept transfers from: Personal Pension Schemes Occupational Pension Schemes Section 32 buy-out policies Free-standing additional voluntary contributions schemes Retirement annuity contracts Stakeholder pension schemes If you have been contracted-out of the State Second Pension (or its predecessors such as the State Earnings Related Pension Scheme), any part of your transfer value that relates to Protected Rights, Guaranteed Minimum Pension or Section 9(2B) Rights cannot be paid into the SIPP. It is important to keep in mind that transferring money to a SIPP from Occupational Pension Schemes is a finely balanced decision and you may receive a lower pension at retirement and the loss of associated dependants benefits as a result. You are strongly recommended to seek individual advice on the merits of transferring existing arrangements. FundsNetwork does not provide such advice. SIPP BANK ACCOUNT The SIPP includes access to a bank account, which is owned and used by Standard Life Trustee Company Limited (the scheme trustee), that allows Standard Life to receive and make payments on your behalf. Your payments will start to earn interest as soon as they clear and any income, such as dividends and tax credits, can also be paid into this account. WHEN CAN I TAKE THE PROCEEDS? You can start to take the proceeds of your SIPP at any age between 50 and the day before your 75th birthday, whether or not you have actually retired. HM Revenue and Customs allows people in certain occupations to take benefits at an earlier age. Please speak to your adviser for more information. TAKING YOUR TAX-FREE LUMP SUM You can take a tax-free lump sum from the SIPP at its pension date. The pension date is the date from which a pension is first payable from the SIPP, either in the form of an income or an annuity. It is not possible to take only a tax-free lump sum. Once a pension date has been set, the remaining funds in the SIPP must be used to provide a regular income or buy an annuity. Remember that the value of tax savings will depend on individual circumstances and all tax rules may change in the future. 7

FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE THE BENEFITS EXPLAINED WITHDRAWING INCOME You can start to withdraw an income at any time from age 50. Any withdrawals you make must be within the limits laid down by the Government Actuary s Department (GAD). Within these limits, you can choose the level of income you require. Withdrawals are subject to your normal rate of income tax. Taking income withdrawals may erode the capital value of your fund, especially if you take a high level of income and investment returns are poor. This could result in a lower income when an annuity is eventually purchased. If you take the maximum level of withdrawals permitted by HM Revenue and Customs regulations, high income withdrawals may not be sustainable during the deferral period. Remember that the investment returns you receive from your SIPP may be less than those shown in your illustration, and that annuity rates may be at a worse level when you eventually come to purchase an annuity. WHAT HAPPENS ON DEATH? On death, your benefits will be paid out in the form of a lump sum, an income, a pension or a combination of these. The death benefits payable depend on the stage that any of your arrangements have reached when you die. BUYING AN ANNUITY You can buy an annuity from any authorised pension provider. You will have a number of choices relating to your annuity, for example: An annuity for one or more dependants Your annuity can stay the same each year or increase at a fixed rate each year of up to 8.5%, or in line with inflation You can guarantee your annuity payments for between 1 and 10 years. This means your annuity will not stop if you die during this period, and will continue to be paid to your beneficiaries for the rest of the guaranteed period You can choose how often you want your annuity to be paid, for example, monthly, three monthly, four monthly, six monthly or yearly Any part of your fund under the SIPP, which has not been used to buy an annuity by the day before your 75th birthday, must be used to buy one at the rates available at the time. 8

WHAT ABOUT FEES AND CHARGES? The fees and charges for investing in the SIPP are set out in SIPP Key Features Document (ref. FSIPP17) and the SIPP Charges Sheet (ref. FSIPP20). For details of the charges applicable to FundsNetwork mutual funds, please ask your financial adviser for a copy of the FundsNetwork fund tables and the standard FundsNetwork Key Features Document. For details of the charges applicable to the Standard Life pension funds, please ask your financial adviser for a copy of the Standard Life Insured Funds Guide document (FSIPP05) and Self Invested Personal Pension Plan Key Features (SLSIP17). If you would like more information, please speak to your financial adviser. REGULAR INFORMATION WE WILL SEND YOU Once your application to join the SIPP has been accepted and processed, you will receive a welcome pack, which will provide you with information regarding: the full range of services available to you the opening hours during which we can be contacted how to get further information (statements, valuations) information on how to contact the specialist 3rd party service providers who can assist with, for example, purchase and administration of a commercial property Yearly Statement You will be sent a Yearly Statement on the anniversary of the start date of the SIPP plan. However, if the plan moves into income drawdown, the Yearly Statement Date is changed to the date when you first moved into income drawdown. You will be sent a yearly valuation and you can request a Transaction Statement for the SIPP Bank Account at any time. 9

FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE PRODUCT SUMMARY A SUMMARY OF THE KEY FEATURES AND BENEFITS FEATURES The relationship between FundsNetwork and Standard Life BENEFITS The combined reputations offer you peace of mind Customer Service Industry recognised service Maximising your death benefits Please note Pension term assurance is not available with this product You can use your SIPP to maximise the amount available to your dependant(s) from your pension fund, in the event of your death Consolidation The ability to bring your pensions into a single joined-up plan Wide range of investment options Offering you access to a wide range of investment options from many of the leading investment companies Commercial Property As a business owner, it offers you tax benefits and the opportunity for a return on your investment Income Drawdown What you need, when you want it, subject to maximum and minimum limits 3rd party Payments An opportunity to provide an excellent retirement solution which attracts tax relief, by making payments for your partner, your children or your grandchildren Control All you need to control your SIPP at your fingertips 10

OTHER INFORMATION SHOULD I SEEK ADVICE? As there are several options available under this plan we believe that before taking out this plan, and during the lifetime of the plan, it is essential that you seek financial advice. This SIPP can only be bought where advice has been given by a qualified financial adviser. FundsNetwork only provides information about its product range and services, and does not give investment advice based on individual circumstances. HOW TO APPLY In order to apply for a FundsNetwork SIPP provided by Standard Life, you should discuss this with your financial adviser, who will assist you in completing an application form (FSIPP30) or any additional paperwork that may be required to support your application. 11

FUNDSNETWORK SIPP PROVIDED BY STANDARD LIFE HOW OTHERS SEE US Although we know what we offer is good, it s also important that others see us in the same light. So it is pleasing to know that FundsNetwork and Standard Life have achieved: FUNDSNETWORK Financial Adviser Awards Supermarket of the year 2004 Real Adviser Awards Best Fund Supermarket 2005 STANDARD LIFE Financial Adviser Life and Pensions Awards Voted SIPP provider of the year 2005 Defaqto IFA SIPP Survey Top choice of SIPP provider 2005 Bankhall Investment provider of the year 2005 Please note that past performance is not a guide to future returns. FSIPP10 The FundsNetwork service is offered and managed by Financial Administration Services Limited. FundsNetwork is a trademark of Fidelity International Limited. The FundsNetwork SIPP is provided and administered by The Standard Life Assurance Company. Financial Administration Services Limited (a Fidelity group company) is registered in England and Wales (no 1629709) Registered office Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent, TN11 9DZ. The Standard Life Assurance Company is a mutual company registered in Scotland (no SZ4) Head Office Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. Both companies are authorised and regulated by the Financial Services Authority. Calls may be recorded and monitored to help improve customer service. Issued by Financial Administration Services Limited. UWS508/17329/CH/CB24656