THE AURUM COMPANY PENSION OPERATOR CHECKED Initials ALI Date 12/03/14

Document Info Notes

Form 45770JG (AUR) Job ID 47479 Size A4 Pages 16 Colour CMYK Version APRIL 2014 Operator Info

1 ALI 12/03/14 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Proof number 1 2 3 4

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GROUP PERSONAL PENSION

A guide to help you prepare for the retirement you want

Your AURUM company pension is provided by Scottish Widows. Group Personal Pension

PAGE 3 WHAT’S IN IT FOR ME? SOME CONSIDERATIONS

PAGE 4 WHAT’S BEST FOR ME? CONTRIBUTING TO A PENSION WHAT ABOUT RELYING ON THE STATE OR USING OTHER INVESTMENTS?

PAGE 5 WHAT ELSE COULD YOU BE RELYING ON IN YOUR OLD AGE?

PAGE 6 WHY CONTRIBUTE? SUPPORTING LITERATURE AND TOOLS TO HELP YOU MAKE PAGE 7 DECISIONS ABOUT YOUR COMPANY PENSION HOW WILL MY PENSION FUND BE INVESTED?

PAGE 8 WANT TO TAKE A MORE HANDS-ON APPROACH LITERATURE TOOLS TO INVESTING YOUR COMPANY PENSION?

• Key Features and Example Illustration Indulge-o-meter • Pension Investment Approach Guide PAGE 9 Find out if spending a bit less on treats could give you • Pension Funds Investor’s Guide CHANGING YOUR INVESTMENT CHOICE LATER ON spare cash for your company pension. • Your guide to with-profits • Policy Provisions Pension Planner PAGE 10 • Important notes for applications Use this to show how much you might get when you retire. The documents above provide important information WHY YOUR COMPANY HAS CHOSEN SCOTTISH WIDOWS about your company pension and should be read. Investment Decision Tool Use this to automatically match yourself to the most PAGE 11 suitable investment option for you. HOW TO CONTRIBUTE WHAT NEXT?

To access the literature and tools visit www.scottishwidows.co.uk/joining We hope this guide answers all your questions, but if not, After reading this literature, we recommend that you either save or print a copy and keep this safe for future reference. please speak to the financial adviser for this company pension or your own financial adviser. If you don’t have internet access or would prefer a paper copy of this information, please call 08457 556 557. Group Personal Pension

PAGE 3 WHAT’S IN IT FOR ME? SOME CONSIDERATIONS

PAGE 4 WHAT’S BEST FOR ME? CONTRIBUTING TO A PENSION WHAT ABOUT RELYING ON THE STATE OR USING OTHER INVESTMENTS?

PAGE 5 WHAT ELSE COULD YOU BE RELYING ON IN YOUR OLD AGE?

PAGE 6 WHY CONTRIBUTE? SUPPORTING LITERATURE AND TOOLS TO HELP YOU MAKE PAGE 7 DECISIONS ABOUT YOUR COMPANY PENSION HOW WILL MY PENSION FUND BE INVESTED?

PAGE 8 WANT TO TAKE A MORE HANDS-ON APPROACH TOOLS TO INVESTING YOUR COMPANY PENSION?

Indulge-o-meter PAGE 9 Find out if spending a bit less on treats could give you CHANGING YOUR INVESTMENT CHOICE LATER ON spare cash for your company pension.

Pension Planner PAGE 10 Use this to show how much you might get when you retire. WHY YOUR COMPANY HAS CHOSEN SCOTTISH WIDOWS Investment Decision Tool

Use this to automatically match yourself to the most PAGE 11 suitable investment option for you. HOW TO CONTRIBUTE WHAT NEXT?

1 Group Personal Pension

WHAT WE MEAN WHEN WE SAY:

COMPANY PENSION WE/US This Scottish Widows Group Personal Pension Plan. Scottish Widows.

PENSION FUND INCOME FOR LIFE The company pension fund held in your name. When you The money your pension fund will pay out once you retire, this fund will be used to pay a taxable income for retire, which is taxed in payment. You can choose to take life together with a tax-free cash sum if chosen. part of your pension fund as a lump sum when you retire that is normally tax-free. TAX-EFFICIENT INVESTMENT RETIREMENT DATE Our pension investment funds are generally free of UK income and capital gains tax. However, we can’t Your selected retirement date. reclaim tax deducted at source from the dividends of UK company shares. Tax rules can change. TOTAL ANNUAL FUND CHARGE WHAT’S IN IT FOR ME? TAXMAN The charge made for managing and investing your plan. HM Revenue and Customs. AUTOMATIC ENROLMENT TAX RELIEF Under Automatic Enrolment legislation both you and HERE ARE SOME REASONS WHY YOU SHOULD CONSIDER STARTING TO CONTRIBUTE TO YOUR COMPANY PENSION your employer are required to pay at least a minimum The payments you make to this plan can be eligible for contribution. If you have been automatically enrolled UK tax relief. We will claim basic rate tax relief on your into the scheme and if you choose to opt-out, your behalf, and invest it in your plan. If you are a higher employer will re-enrol you at least every three years. • When you start paying in, your employer or additional rate taxpayer, you may be able to claim You can find more information on Automatic Enrolment will normally start paying in too additional tax relief via your self-assessment tax return. at www.gov.uk/workplace-pensions • For UK taxpayers, currently every 80p you pay in There is no tax relief on any employer contributions or is topped up to £1 by the taxman, and you may be transfer payments. The value of the tax benefits of a able to reclaim further tax relief if you’re a higher or personal pension depend on your personal circumstances. additional rate tax payer Both your circumstances and tax rules may change in • Your pension fund is a highly tax-efficient investment the future. • The sooner you start paying in, the longer your pension fund has the opportunity to grow

2 Group Personal Pension

WHAT WE MEAN WHEN WE SAY:

WE/US Scottish Widows.

INCOME FOR LIFE The money your pension fund will pay out once you retire, which is taxed in payment. You can choose to take part of your pension fund as a lump sum when you retire that is normally tax-free.

RETIREMENT DATE Your selected retirement date.

TOTAL ANNUAL FUND CHARGE WHAT’S IN IT FOR ME? The charge made for managing and investing your plan.

AUTOMATIC ENROLMENT

Under Automatic Enrolment legislation both you and HERE ARE SOME REASONS WHY YOU SHOULD CONSIDER STARTING TO CONTRIBUTE TO YOUR COMPANY PENSION your employer are required to pay at least a minimum contribution. If you have been automatically enrolled into the scheme and if you choose to opt-out, your employer will re-enrol you at least every three years. • When you start paying in, your employer • If you leave your job, you can take your pension You can find more information on Automatic Enrolment will normally start paying in too fund with you, even including the payments your at www.gov.uk/workplace-pensions • For UK taxpayers, currently every 80p you pay in employer has made is topped up to £1 by the taxman, and you may be • When you retire, you can normally take a tax-free able to reclaim further tax relief if you’re a higher or cash lump sum, plus a taxable income for life additional rate tax payer • To help make your investment decision easier, • Your pension fund is a highly tax-efficient investment we have designed some simple investment tools • The sooner you start paying in, the longer your pension fund has the opportunity to grow

3 Group Personal Pension

WHAT’S BEST FOR ME?

A STEP-BY-STEP LOOK AT MAKING YOUR PENSION DECISIONS

CONTRIBUTING TO A PENSION Here are the amounts for the tax year 2014-15. WHAT ELSE COULD YOU BE RELYING ON IN YOUR OLD AGE? Some people enjoy planning their finances and being in control. Others avoid thinking about it for as long as possible, With both your employer and the taxman helping you Basic State Pension Single person Married couple to save, it literally pays you to contribute and some do nothing at all. Weekly amount £113.10 £180.90 Scottish Widows is working in conjunction with your There are a wide range of investments out there and some or all of them may play a part in your thinking, alongside this employer and their pension advisers, to provide this Monthly total £490.10 £783.90 company pension. Take a look below at some other options available to UK residents, and see how well they compare. company pension. Yearly total £5,881.20 £9,406.80 See how your company pension compares to some other investment options If you choose to become a member of your employer’s company pension, it could be of life-long benefit for you. Will I get a full State Pension? Investment options Avoid having to work ‘til you drop You’ll need to find out. According to the Department for Your Buy-to-let Inheriting ISAs Work and Pensions, 15% of those reaching State Pension Whatever your personal ambitions for your retirement, company property money Age are entitled to less than the full amount of Basic you’ll need money to enjoy life to the full. That’s where pension State Pension. this company pension could help. Your employer can pay in # 3 7 7 7 How much you get will depend on how much you have By contributing to this company pension you may be in paid in National Insurance Contributions during your You get tax relief on your payments 3 7 7 7 a position to retire earlier or have a better lifestyle when working life. People reaching their State Pensionable Age you eventually stop work. Other individuals can pay money in on your behalf 3 7 7 7 (SPA) will need to have paid them for a full 30 years. (and you benefit from tax relief)

WHAT ABOUT RELYING ON THE STATE How do I get a State Pension forecast? You can’t spend the investment before you retire 3 7 7 7 OR USING OTHER INVESTMENTS? You can find out exactly how much money to expect You can take some of the proceeds or benefits tax-free 3 7 3 3 by contacting The Pension Service. You can ask for a A pension is one of the best ways to save for your forecast by applying for one online at All of the income or proceeds are tax-free 7** 7 3* 3** retirement, but it’s not your only option. www.gov.uk/state-pension-statement or by post You don’t have to give up your time to manage things 3 7 3 3 What will I get from the State? Will I get the State Second Pension? Like most people, you’ll probably get something from the How much State Second Pension (this is sometimes paid # Your employer may change their level of contributions. Any employer contributions would stop if you leave the company. Basic State Pension. in addition to the Basic State Pension) you receive will * If under the inheritance tax nil rate limit, this can be tax free. The age at which you first receive the State Pension will be based on a combination of factors, including: depend on your date of birth, but is expected to increase ** Please note it’s not possible to reclaim the 10% tax credit on UK dividends. • Your average earnings gradually to 68 by mid 2030s. So many of us may have Tax treatment depends on your personal circumstances and may be subject to change in the future. For more information to work longer than we thought. • How long you’ve been employed on any of these investment options or their tax implications, please speak to a financial adviser. • Your National Insurance contribution history.

If you’re resident overseas or a non UK national, the state benefit you’re entitled to (if any) may differ from those described above. Please speak to your financial adviser for further details. From 2016, a flat rate State Pension system is due to be introduced.

4 Group Personal Pension

WHAT’S BEST FOR ME?

A STEP-BY-STEP LOOK AT MAKING YOUR PENSION DECISIONS

Here are the amounts for the tax year 2014-15. WHAT ELSE COULD YOU BE RELYING ON IN YOUR OLD AGE? Some people enjoy planning their finances and being in control. Others avoid thinking about it for as long as possible, Basic State Pension Single person Married couple and some do nothing at all. Weekly amount £113.10 £180.90 There are a wide range of investments out there and some or all of them may play a part in your thinking, alongside this Monthly total £490.10 £783.90 company pension. Take a look below at some other options available to UK residents, and see how well they compare.

Yearly total £5,881.20 £9,406.80 See how your company pension compares to some other investment options

Will I get a full State Pension? Investment options You’ll need to find out. According to the Department for Your Buy-to-let Inheriting ISAs Work and Pensions, 15% of those reaching State Pension company property money Age are entitled to less than the full amount of Basic pension State Pension. Your employer can pay in # 3 7 7 7 How much you get will depend on how much you have paid in National Insurance Contributions during your You get tax relief on your payments 3 7 7 7 working life. People reaching their State Pensionable Age Other individuals can pay money in on your behalf 3 7 7 7 (SPA) will need to have paid them for a full 30 years. (and you benefit from tax relief)

How do I get a State Pension forecast? You can’t spend the investment before you retire 3 7 7 7 You can find out exactly how much money to expect You can take some of the proceeds or benefits tax-free 3 7 3 3 by contacting The Pension Service. You can ask for a forecast by applying for one online at All of the income or proceeds are tax-free 7** 7 3* 3** www.gov.uk/state-pension-statement or by post You don’t have to give up your time to manage things 3 7 3 3 Will I get the State Second Pension? How much State Second Pension (this is sometimes paid # Your employer may change their level of contributions. Any employer contributions would stop if you leave the company. in addition to the Basic State Pension) you receive will * If under the inheritance tax nil rate limit, this can be tax free. be based on a combination of factors, including: ** Please note it’s not possible to reclaim the 10% tax credit on UK dividends. • Your average earnings • How long you’ve been employed Tax treatment depends on your personal circumstances and may be subject to change in the future. For more information on any of these investment options or their tax implications, please speak to a financial adviser. • Your National Insurance contribution history.

5 Group Personal Pension

WHY CONTRIBUTE? It’s never too late HOW WILL MY PENSION FUND BE Don’t assume it’s too late for you to contribute. INVESTED? A company pension is a highly tax-efficient way to The chances are you could still have a lot to gain. If you are being automatically enrolled into your help get the retirement income you need In most cases, even a small pension is better than company pension scheme your employer will have Unless your retirement is already on the horizon, you none at all – especially when your employer and the selected a default investment option for your first may struggle to picture exactly what you’ll be doing taxman are helping to pay for it. in 20–40 years’ time. But, whatever you want your contribution. Your employer will provide you with details retirement to be, a company pension should help give How much extra could you find in your budget? of this. In these circumstances, you will be able to you a financial cushion to enjoy it that bit more. If you kept a close eye on your shopping this month, choose from one of the following options only after the how much extra do you think you could find to pay first contribution has been made. • When you contribute, there’s the feel-good factor into your pension? of knowing your company pension is there in the • you can choose to stay in the default investment background, quietly doing its job option or you can choose from one of the following options: • Because it’s earmarked for your retirement, you can’t Try using the Indulge-o-meter in the dip into your company pension or fritter it away. So, • Simply choose one of our Pension Investment supporting tools to find out how much you’re Approaches based on your feelings about risk, and although it’s tied up until you retire, you should be spending on life’s little luxuries. able to rely on it being there when the time comes let us manage this through to your retirement, or • You don’t have to retire or stop work before taking • Be very ‘hands-on’ – selecting from our wide range of investment funds. your company pension. You normally can start taking Topping up your company pension with extra payments your pension at any age from 55. But remember, the If you want to give your company pension a boost, you About our three risk-based Pension Investment earlier you take your pension, the less time your can increase your payments or add lump sums to it at Approaches pension fund has the opportunity to grow. any time. For example, using money from: Not everyone wants to be actively involved with The sooner you start contributing, the longer your picking investments and keeping a close eye on what’s • Bonuses contributions have the potential to grow happening in the market. If this sounds like you, one • Windfalls or winnings Your retirement may seem a long way off, but don’t fall of our three specially designed Pension Investment into the trap of putting off contributing because you’ve • An inheritance or gift Approaches may be just what you need. Simply tell us got plenty of time. Take it from people retiring today, it • Other savings from your bank or building society. which one suits you best. will come round much faster than you think. Plus, you’ll normally get UK tax relief on these payments They all work in a similar way. The difference between too. You can read more about tax in the Key Features. them is how much investment risk they take in trying to The longer you delay the more you’d need to pay in help your pension fund grow. All three approaches aim to to try and get the same size of pension income reduce the risk the closer you get to retirement, and aim The longer you live, the more money you’re likely to to protect the final value of your pension fund. need. Most people retiring at 65 now will live to their early-80’s (based on current figures from the Office for Our Investment Decision Tool is a quick questionnaire National Statistics): to show you which of our three Pension Investment Approaches may suit you best. It can be found in the • Even by the time you’ve read this guide, the supporting tools or at www.scottishwidows.co.uk/idt average life expectancy will have increased by about 5–10 minutes. With new medical advances helping to cure life-threatening diseases, your life expectancy could continue to rise.

6 Group Personal Pension

It’s never too late HOW WILL MY PENSION FUND BE Adventurous Pension Approach Don’t assume it’s too late for you to contribute. INVESTED? A plan using this Pension Investment Approach is The chances are you could still have a lot to gain. expected to have the most frequent and noticeable ups If you are being automatically enrolled into your In most cases, even a small pension is better than and downs in value. It has the potential to provide the company pension scheme your employer will have none at all – especially when your employer and the highest growth over the longer term, but it could also selected a default investment option for your first taxman are helping to pay for it. make the biggest losses. contribution. Your employer will provide you with details How much extra could you find in your budget? of this. In these circumstances, you will be able to Balanced Pension Approach This Pension Investment Approach should have moderate If you kept a close eye on your shopping this month, choose from one of the following options only after the ups and downs compared with the other two approaches. how much extra do you think you could find to pay first contribution has been made. into your pension? • you can choose to stay in the default investment Cautious Pension Approach option or you can choose from one of the A plan invested in this Pension Investment Approach following options: should experience smaller and less-frequent ups and Try using the Indulge-o-meter in the • Simply choose one of our Pension Investment downs in value than the other two approaches. But its supporting tools to find out how much you’re Approaches based on your feelings about risk, and growth potential is lower as a result. spending on life’s little luxuries. let us manage this through to your retirement, or What’s special about these approaches? • Be very ‘hands-on’ – selecting from our wide range of investment funds. They take into account the fact that investments need to do Topping up your company pension with extra payments different jobs for your company pension at different times: If you want to give your company pension a boost, you About our three risk-based Pension Investment • For the main part they aim to grow your pension can increase your payments or add lump sums to it at Approaches fund as much as possible – whilst matching the level any time. For example, using money from: Not everyone wants to be actively involved with of investment risk you’ve chosen picking investments and keeping a close eye on what’s • Bonuses happening in the market. If this sounds like you, one • The closer you get to retirement, they gradually • Windfalls or winnings of our three specially designed Pension Investment switch from an aim of ‘going for growth’ to helping • An inheritance or gift Approaches may be just what you need. Simply tell us protect what you’ve built up. • Other savings from your bank or building society. which one suits you best. How do we decide which investments to use? Plus, you’ll normally get UK tax relief on these payments They all work in a similar way. The difference between That’s easy. Everything is decided in advance, based too. You can read more about tax in the Key Features. them is how much investment risk they take in trying to on rigorous investment testing. Instead of switching help your pension fund grow. All three approaches aim to investments in reaction to what’s happening day to day reduce the risk the closer you get to retirement, and aim in the stockmarket, we invest according to the approach to protect the final value of your pension fund. you’ve selected and how close you are to retiring. Our Investment Decision Tool is a quick questionnaire When originally designing our Pension Investment to show you which of our three Pension Investment Approaches, we put a huge range of investments under Approaches may suit you best. It can be found in the the microscope. This enabled us to: supporting tools or at www.scottishwidows.co.uk/idt • Rule out unsuitable ones – too risky or not enough potential growing power • Select types we felt were right for Scottish Widows company pensions • Identify what we believe are the best investment combinations for people with different ideas about risk and different terms to retirement.

7 Group Personal Pension

How do we monitor your investments? WANT TO TAKE A MORE HANDS-ON CHANGING YOUR INVESTMENT CHOICE We constantly monitor your company pension, to ensure APPROACH TO INVESTING YOUR LATER ON it is invested according to your chosen approach: COMPANY PENSION? Whatever investment choice you make at the start, • Up to 15 years before you retire – we check every Your other option you’re free to change your mind and switch to three months to see if any investment ups and downs something else later on have caused the investment mix to go adrift. If it has, If you decide to invest in our investment funds instead Switching is currently free and you can: we adjust it. The new mix will be based on how much of using our Pension Investment Approaches, you will be closer you are to retirement at that time responsible for choosing funds that suit your attitude to • Ask to do it at any time risk. You can invest in up to 10 of them at one time (but • From 15 years before you retire – we gradually start • Move from investment funds into one of our Pension there may be restrictions on the amount you can invest in replacing some of the higher risk investment funds Investment Approaches, or from an approach into some funds). Currently switches between them are free. with lower risk ones one or more investment funds Although this has the effect of reducing the potential for The investment funds have been placed into our different • Spread your company pension in up to 10 investment growth, it helps to protect the value of your plan during risk approach ratings to help make your investment choice funds at once. easier. You can find out more about them in our Pension the run-up to your selected retirement date But you can’t invest: Funds Investor’s Guide in the supporting literature. • At your retirement date – your pension fund will be • In more than one Pension Investment Approach at a Please remember, if you go down this route: split approximately: time, or –– 25% in our Cash Fund • You should regularly review your choice to decide • In both investment funds and a Pension Investment –– 75% in our Pension Protector Fund whether it’s still right for you. If you decide it isn’t, Approach at the same time. you can ask us to switch to another fund (or funds) ready to provide your tax-free cash and taxable income Please Note: We reserve the right to delay the date of as we won’t automatically do this for you for life. exchange for a switch. The period of the delay will be not • Some of the funds may have a higher yearly charge more than six months if the units to be cancelled include Want more information? compared to those used for the Pension Investment units which relate to a fund which holds directly or Please see our Pension Investment Approach Guide. Approaches. Please contact us for details of the indirectly assets in the form of real or heritable property. For more information on our fund aims and risks, please charges for each fund It will not be more than one month in all other cases. refer to our Pension Funds Investor’s Guide. You’ll find • We may change the selection of funds we make these in the supporting literature. available at any time. Is being ‘hands-on’ right for you? Have you done something like this before? If you’re not confident about making the right moves at the right time, you may want a financial adviser to help you. Most of the investment funds have been placed into our different risk approach ratings to help you choose – but you’ll be responsible for deciding when and where to invest and if/when to switch.

Our Self Investment Option Additional investment choices are available through the Self Investment Option. This allows members to set up a personal pension plan through our Retirement Account product alongside their group pension plan and to invest directly in a wide range of investments. This option is designed for experienced investors and you should speak to a financial adviser if you are unsure whether it is suitable for you. Please contact your adviser or employer for more details.

8 Group Personal Pension

WANT TO TAKE A MORE HANDS-ON CHANGING YOUR INVESTMENT CHOICE Time to decide APPROACH TO INVESTING YOUR LATER ON What investments will you choose for your COMPANY PENSION? company pension? Whatever investment choice you make at the start, • Are you going to be a ‘hands-on’ investor and self- Your other option you’re free to change your mind and switch to something else later on select investment funds from our wide range of If you decide to invest in our investment funds instead funds, or of using our Pension Investment Approaches, you will be Switching is currently free and you can: • Choose one of our Pension Investment Approaches, responsible for choosing funds that suit your attitude to • Ask to do it at any time and let us do the work? risk. You can invest in up to 10 of them at one time (but • Move from investment funds into one of our Pension there may be restrictions on the amount you can invest in Will my pension fund go up and down in value? Investment Approaches, or from an approach into some funds). Currently switches between them are free. one or more investment funds Yes, ups and downs are part and parcel of investing. The investment funds have been placed into our different • Spread your company pension in up to 10 investment But over the longer term the aim of our investment funds risk approach ratings to help make your investment choice funds at once. and the three Pension Investment Approaches is to easier. You can find out more about them in our Pension But you can’t invest: achieve long-term growth. Funds Investor’s Guide in the supporting literature. • In more than one Pension Investment Approach at a Whatever you decide, remember that the value of the Please remember, if you go down this route: time, or investment is not guaranteed and may go up and down depending on investment performance (and currency • You should regularly review your choice to decide • In both investment funds and a Pension Investment exchange rates where a fund invests overseas). The value whether it’s still right for you. If you decide it isn’t, Approach at the same time. you can ask us to switch to another fund (or funds) can fall below the amount of contributions paid in. Please Note: We reserve the right to delay the date of as we won’t automatically do this for you exchange for a switch. The period of the delay will be not • Some of the funds may have a higher yearly charge more than six months if the units to be cancelled include compared to those used for the Pension Investment units which relate to a fund which holds directly or Approaches. Please contact us for details of the indirectly assets in the form of real or heritable property. charges for each fund It will not be more than one month in all other cases. • We may change the selection of funds we make available at any time. Is being ‘hands-on’ right for you? Have you done something like this before? If you’re not confident about making the right moves at the right time, you may want a financial adviser to help you. Most of the investment funds have been placed into our different risk approach ratings to help you choose – but you’ll be responsible for deciding when and where to invest and if/when to switch.

9 Group Personal Pension

HOW TO CONTRIBUTE

WHAT NEXT? Deciding to contribute will help increase your chances of a financially secure retirement. Please read the Key Features and Example Illustration. These give you important details about how your company pension works.

Need financial advice? Scottish Widows has not provided you with advice. If you’re not sure if this product is suitable for you, or if you’re not confident about deciding how to invest, a financial adviser may be able to help you. You can: WHY YOUR COMPANY HAS CHOSEN SCOTTISH WIDOWS • Use your own adviser, if you have one • Speak to your employer’s company pension adviser if they have one • Find a UK adviser in your local area, at www.unbiased.co.uk The website is run by the body responsible for promoting professional A name you can trust financial advice in the UK, so you can be sure After researching the market, your employer has chosen • Giving an excellent and thoughtful service is very everyone listed is fully qualified and regulated us to provide your company pension. Here are some important to us • Visit the Money Advice Service website reasons why they felt we came out top: • We’ve been around for nearly 200 years, and that’s www.moneyadviceservice.org.uk This contains • We’re part of the Lloyds Banking Group, one of the top important. We’ve been helping people save for a free, clear, unbiased advice to help you manage 100 companies listed on the London Stock Exchange long time and we want to see if we can help you do your money. the same. • We’re experts in group pensions, we currently look Overseas applicants after over 40,000 schemes All these success factors help to make Scottish Widows one of the UK’s leading financial institutions and a The tax benefits referred to elsewhere in this booklet company you can rely on. are based on Scottish Widows’ understanding of HM Revenue and Customs practices and UK law at the date of publication. If your country of residence is not the UK, the laws and rules of the country in which you reside could affect the policy, including the benefits you can receive. You should speak with legal and/or tax professionals in your country of residence for full details.

10 Group Personal Pension

HOW TO CONTRIBUTE

WHAT NEXT? How to contribute Your employer or their adviser will give you details of how Deciding to contribute will help increase your chances of to start contributing to your company pension scheme. a financially secure retirement. However, if you’re an overseas applicant, please speak to Please read the Key Features and Example Illustration. your employer. These give you important details about how your company pension works. After you start contributing Need financial advice? After you start contributing, we will send you a welcome pack which includes: Scottish Widows has not provided you with advice. Your policy documents, including the terms and If you’re not sure if this product is suitable for you, or • conditions (known as policy provisions) that apply if you’re not confident about deciding how to invest, a to your company pension. financial adviser may be able to help you. You can: • A personal illustration • Use your own adviser, if you have one WHY YOUR COMPANY HAS CHOSEN SCOTTISH WIDOWS Regular updates • Speak to your employer’s company pension adviser if they have one Every year we’ll also send you a statement showing how much has been paid into your pension fund and what it’s • Find a UK adviser in your local area, at currently worth. www.unbiased.co.uk The website is run by the body responsible for promoting professional Online access financial advice in the UK, so you can be sure By contributing to your employer’s company pension, • Giving an excellent and thoughtful service is very everyone listed is fully qualified and regulated important to us you have online access to your policy. This includes: • Visit the Money Advice Service website • We’ve been around for nearly 200 years, and that’s www.moneyadviceservice.org.uk This contains • Current and historic fund values important. We’ve been helping people save for a free, clear, unbiased advice to help you manage • Access to unit purchase history long time and we want to see if we can help you do your money. • Change address/contact details the same. Overseas applicants • Request copies of previous annual benefit statements. All these success factors help to make Scottish Widows one of the UK’s leading financial institutions and a The tax benefits referred to elsewhere in this booklet Our range of online services provides you with a quick company you can rely on. are based on Scottish Widows’ understanding of and simple way to keep track of your pension plan. HM Revenue and Customs practices and UK law You can access these facilities online at at the date of publication. www.scottishwidows.co.uk/corporate If your country of residence is not the UK, the laws and There’s a ‘log-in or register’ button at the top of the rules of the country in which you reside could affect the web page. policy, including the benefits you can receive. You should speak with legal and/or tax professionals in your country of residence for full details.

Scottish Widows plc. Registered in Scotland No. 199549. Registered Office in the United Kingdom at 69 Morrison Street, Edinburgh EH3 8YF. Telephone: 0131 655 6000.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 191517.

45770JG (AUR) 04/14 Document Info Notes

Form 54301 Job ID 45555 Size A4 Pages 4 Colour CMYK Version APRIL 2014 Operator Info

1 ALI 03/02/14 2 ALI 06/02/14 3 4 5 6 7 8 9 10 SALARY 11 12 13 14 EXCHANGE 15

CREATIVE SERVICES CHECKLIST • Mandatory checks must be completed on all proofs. • Additional checks must also be completed on the first proof and subsequently when relevant or necessary. Proof number 1 2 3 4 5 6 7 Comments

Mandatory checks YOUR COMPANY PENSION OFFERS SALARY EXCHANGE. SALARY EXCHANGE IS AN AGREEMENT New Brand - use approved template (check size) • BETWEEN YOU AND YOUR EMPLOYER WHERE YOU EXCHANGE PART OF YOUR GROSS (BEFORE TAX Footer/Form number/version date is correct • OR NATIONAL INSURANCE CONTRIBUTIONS) SALARY OR BONUS IN RETURN FOR A Spell check • NON-CASH BENEFIT SUCH AS A PENSION CONTRIBUTION. If Spec changes — notify the Account Manager Check version date matches DMS COMPARE ALTERATIONS TO MARKED UP PDF • Layout/text You choose an amount to exchange and it is taken from Salary exchange is a contractual agreement between you Remove bad line breaks/check paragraph returns not in text your gross salary so you don’t pay National Insurance and your employer. Check all hyphenation/n-dashes Contributions on the amount you choose to exchange. Your employer will decide how long the agreement will Quote marks/apostrophes appear correctly The exchanged amount goes into your pension as an last. Normally, you can’t change or stop the exchange Remove double spaces (except deliberate) • employer contribution. during the agreement period but your employer may Telephone numbers/dates/postcodes are not split With a typical company pension scheme, the employee include the option to change the agreement if you No full stop after URLs pays contributions into their pension plan. However, experience a ‘lifestyle change’. Your employer can Folio/page numbers are in correct order/position with salary exchange, you don’t make contributions provide more information on this. Page headings/folios match contents direct into your pension plan. Fonts used (see INFO panel)” These payments will be shown as employer payments on Images/graphics Instead, your gross salary is reduced by the amount you any correspondence you receive such as illustrations or Tables/boxes/charts/graphs are on brand (Guidelines page 58) want to exchange and this money is then paid into your annual statements because you are using salary exchange. Infographics Guidelines page 59) pension as an employer contribution. Basically, this The level of income you receive from your pension plan Graphs/charts match figures and axis correctly means that by exchanging rather than paying directly will depend upon a number of factors including the value Miscellaneous you don’t pay NICs on the amount contributed towards of the plan when you decide to take your pension, which Most recent logos and images are used your pension. As a result of salary exchange, your NICs isn’t guaranteed and can go down as well as up. The value Check FSA replaced with FCA and “Services” to “Conduct” will be lower. This may impact your State Pension. of your plan could fall below the amount(s) paid in. Colour split (CMYK or spot) • Depending on what your employer offers, you can choose Forms can be completed to either exchange an amount which will allow your take TAX RELIEF Envelopes/letters – check position home pay to remain at the same level (as if you were Operator info making normal employee pension payments) and have If you choose to make additional personal contributions BRAND CHECKED (INITIALS) to the plan, outside of the salary exchange arrangement, your NIC saving paid into your pension, or you can keep OPERATOR CHECKED Initials ALI ALI your pension payments at the same level and increase these contributions may be eligible for UK tax relief. your take home pay. We will claim basic rate tax relief on your behalf and Date 03/02/14 06/02/14 invest it in your plan. If you are a higher or additional rate taxpayer you may be able to claim additional tax relief on The result of salary exchange is: these contributions via your self-assessment tax return. • Exactly the same amount will be paid The value of the tax benefits of a pension plan depend on into your pension plan and your net income your personal circumstances. Both your circumstances increases slightly as you pay less NICs and tax rules may change in the future. OR

• You pay a little extra into your pension plan Remember and your net income stays the same. Your employer will normally be paying their own contributions to your pension plan. Salary Exchange

HERE’S HOW IT WORKS FOR BASIC RATE TAXPAYERS HERE’S HOW IT WORKS FOR HIGHER RATE TAXPAYERS Let’s assume: Let’s look at another example. This time we’ll assume: Let’s assume:

• You’re a basic rate tax payer earning £24,000 a year • You’re a basic rate tax payer earning £24,000 a year • You’re a higher rate tax payer earning £60,000 a year • You currently pay a gross pension contribution of • You currently pay a gross pension contribution of • You currently pay a gross pension contribution of £1,200 a year (or £100 a month) £1,200 a year (or £100 a month) £6,000 a year (or £500 a month) • You now agree to a salary exchange of £1,412 a year • You now agree to a salary exchange of £1,200 a year • You now agree to a salary exchange of £6,207 a year to keep your take home pay the same but pay more to keep your pension contributions at the same level to keep your take home pay the same but pay more to your pension. and increase your take home pay. to your pension.

Tax year 2014/15 Before After Tax year 2014/15 Before After Tax year 2014/15 Before After exchange exchange exchange exchange exchange exchange

Gross earnings £24,000 £22,588 Gross earnings £24,000 £22,800 Gross earnings £60,000 £53,793

Tax you pay £2,800 £2,518 Tax you pay £2,800 £2,560 Tax you pay £13,627 £11,144

National Insurance £1,926 £1,756 National Insurance £1,926 £1,782 National Insurance £4,432 £4,308 you pay you pay you pay

Net earnings after £19,274 £18,314 Net earnings after £19,274 £18,458 Gross earnings after £41,941 £38,341 tax and NI tax and NI tax and NI

Minus current £960 net n/a as amount Minus current £960 net n/a as amount Minus current £4,800 net n/a as amount pension (£1,200 gross) has been pension (£1,200 gross) has been pension contribution (£6,000 has been contribution exchanged contribution exchanged gross) exchanged

Take home pay £18,314 £18,314 Take home pay £18,314 £18,458 Take home pay £37,141 £38,341 (before reclaim of In the above example you have increased your pension In the above example you have kept the gross payments higher rate tax relief) contributions to £1,412 gross a year but kept your take to your pension at £1,200 but increased your take home Higher rate tax relief £1,200 n/a as amount home pay at the same level. pay to £18,458 a year. on gross pension has been Both the above examples assume that: contribution exchanged

• You have a personal allowance of £10,000 a year (so you only pay tax on any amount earned above that) and Final income £38,341 £38,341 • You only pay NICs on any amount earned over £7,956, this is the ‘primary earnings threshold’ for tax year 2014/15. In the above example you have increased your pension Please note: The NIC rate for employees is 12%. contributions to £6,207 a year but kept your take home pay at the same level.

Both the above examples assume that:

• You have a personal allowance of £10,000 a year (so you only pay tax on any amount earned above that) and • You pay 20% tax on your earnings up to £31,865 and then 40% on any earnings above this amount; • You pay NICs of 12% on any amount earned between £7,956 and £41,865 and NICs of 2% on any amount earned over £41,865. • You do not have any other taxable income. Higher or additional rate taxpayers can claim additional tax relief on any personal contributions they make via their self-assessment tax return. The personal income allowance will be reduced for those with incomes over £100,000, tapering down to zero. Please ask your financial adviser for more details. You should remember that these are only examples and they aren’t guaranteed. The value of the tax benefits of a pension plan depends on your individual circumstances. Your circumstances and tax rules may change in the future. Please note: these examples look only at the employee contributions. Your employer will normally be paying to your pension plan. Salary Exchange

HERE’S HOW IT WORKS FOR BASIC RATE TAXPAYERS HERE’S HOW IT WORKS FOR HIGHER RATE TAXPAYERS Let’s look at another example. This time we’ll assume: Let’s assume: Let’s look at another example. This time we’ll assume:

• You’re a basic rate tax payer earning £24,000 a year • You’re a higher rate tax payer earning £60,000 a year • You’re a higher rate tax payer earning £60,000 a year • You currently pay a gross pension contribution of • You currently pay a gross pension contribution of • You currently pay a gross pension contribution of £1,200 a year (or £100 a month) £6,000 a year (or £500 a month) £6,000 a year (or £500 a month) • You now agree to a salary exchange of £1,200 a year • You now agree to a salary exchange of £6,207 a year • You now agree to a salary exchange of £6,000 a year to keep your pension contributions at the same level to keep your take home pay the same but pay more to keep your pension contributions at the same level and increase your take home pay. to your pension. and increase your take home pay.

Tax year 2014/15 Before After Tax year 2014/15 Before After Tax year 2014/15 Before After exchange exchange exchange exchange exchange exchange

Gross earnings £24,000 £22,800 Gross earnings £60,000 £53,793 Gross earnings £60,000 £54,000

Tax you pay £2,800 £2,560 Tax you pay £13,627 £11,144 Tax you pay £13,627 £11,227

National Insurance £1,926 £1,782 National Insurance £4,432 £4,308 National Insurance £4,432 £4,312 you pay you pay you pay

Net earnings after £19,274 £18,458 Gross earnings after £41,941 £38,341 Gross earnings after £41,941 £38,461 tax and NI tax and NI tax and NI

Minus current £960 net n/a as amount Minus current £4,800 net n/a as amount Minus current £4,800 net n/a as amount pension (£1,200 gross) has been pension contribution (£6,000 has been pension contribution (£6,000 has been contribution exchanged gross) exchanged gross) exchanged

Take home pay £18,314 £18,458 Take home pay £37,141 £38,341 Take home pay £37,141 £38,461 (before reclaim of (before reclaim of In the above example you have kept the gross payments higher rate tax relief) higher rate tax relief) to your pension at £1,200 but increased your take home Higher rate tax relief £1,200 n/a as amount Higher rate tax relief £1,200 n/a as amount pay to £18,458 a year. on gross pension has been on gross pension has been Both the above examples assume that: contribution exchanged contribution exchanged

• You have a personal allowance of £10,000 a year (so you only pay tax on any amount earned above that) and Final income £38,341 £38,341 Final income £38,341 £38,461 • You only pay NICs on any amount earned over £7,956, this is the ‘primary earnings threshold’ for tax year 2014/15. In the above example you have increased your pension In the above example you have kept the gross payments Please note: The NIC rate for employees is 12%. contributions to £6,207 a year but kept your take home to your pension at £6,000 and increased your take home pay at the same level. pay to £38,461.

Both the above examples assume that:

• Other benefits which are linked to your salary, for example, benefits on death and over-time rates. • Statutory benefits linked to your lower salary mayalso be impacted. These include: –– State pension. –– Statutory maternity, paternity and sick pay. –– Working or child tax credit. • As mortgage lenders usually base the amount which can be borrowed on the salary after the exchange, this will reduce the amount that you can borrow. However, your employer may decide to maintain a ‘notional salary’ (your original salary with no exchange). This is useful for things like mortgage references, over-time, life assurance multiples and salary reviews. You may wish to speak to your employer or financial adviser for more information on salary exchange and whether it is suitable for you.

Scottish Widows plc. Registered in Scotland No. 199549. Registered Office in the United Kingdom at 69 Morrison Street, Edinburgh EH3 8YF. Telephone: 0131 655 6000.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 191517.

54301 04/14