FAQ-Savings & Investments

What is the Investment Bond?

• It is a single premium life assurance contract used for long term investment purposes.

• It can be held in the name of one person alone or it can include up to six people. The sole person, or at least one if in more than onename, must be under age 90 when the investment is made. The person (or persons) who owns the investment must be aged 18 or over.

• There is no fixed investment period, although the bond should be considered a medium to long term investment; at least five years,ideally longer.

• It ends on the death of the sole person in whose name the bond is held, or on the death of the last person if held in more than onename. If you would like to arrange for specific family or friends to benefit, ask your financial adviser for details of putting your bond into a trust.


Where is my money invested?

• Your money is invested in one, or a combination, of our range of funds. Your chosen fund (or funds) is shown on your accompanying Personal Illustration. Each fund has its own investment objective and risk rating. Details of all our funds are in the accompanying‘Funds Directory’.

• We divide funds into ‘units’; all units being equal in value. Your share of a fund is the number of units you hold in it. We work out the value of your bond based upon the number of units you hold in a fund and the price applicable to those units. As the price goes up and down, so will the value of your bond.

• The percentage of your money used to buy units (known as the ‘Allocation Rate’) depends on your age and the amount of your investment, as shown below.
If the bond is to be held in the name of more than one person, the age of the youngest person is used.

Investment amount	Age 74 Age 75 and under to 89
£5,000-£24,999	100.00% 97.50%
£25,000-£49,999	100.50% 98.00%
£50,000-£99,999	101.00% 98.50%
£100,000 and over	101.25% 98.75%

What might I get back?

• The value of your investment is not guaranteed and will fluctuate. (Note: Certain safeguards do apply to the Protected UK Growth Fund.)

• The amount you receive on cashing in your bond will depend upon:
- the performance of the assets that make up your chosen fund (or funds)(Please note, if you invest in any fund that includes overseas investments, the performance can also be affected by exchange rate variations.)
- the length of time you hold it.
- how much you have already taken out of it- the charges.
- any early surrender charge that may apply.

• An early surrender charge applies if you need to cash in all or part of your bond at any time in the first five years. The amount, and an example of the effect of this, is shown in your Personal Illustration.

• It is possible that you could get back less than you originally invested due to the nature of the underlying investments, which can fall as well as rise in value. In addition, this can be particularly applicable if you cash in the bond during the early years, due to the effect of:
- the early surrender charge, and
- any age related initial charge, as described in the ‘What about charges?’ section, that may have been deducted from your investment. If the percentage shown as the ‘Allocation Rate’ on your Personal Illustration is less than 100% a charge has been made.

• Your Personal Illustration gives examples of what might happen if the fund (or funds) you have selected achieves the investment growth rates shown throughout the period of your investment. It assumes charges remain at their current level and any regular withdrawals selected remain unchanged.

Additional information for the Protected UK Growth Fund only
A description of the key points follows. It is very important that you read the ‘Protected UK Growth Fund Guide' before investing in this fund as it contains other essential information.

• The fund is a mix of UK shares and cash. It has locked in protection so you will get back 80% of the highest value that your fund reaches even if the UK stock market falls. This protection depends on a third party honouring contracts they have made with Legal & General so it's not an absolute guaranteed minimum return and is not provided by Legal & General. Please see the ‘Fund Guide' for details.

• The amount you get back could be less than the protected 80% if you cash in during the early years due to the early surrender charge described earlier. Also, if we apply an age related initial charge to your investment (that is, if the ‘Allocation Rate' shown on the first page of your Personal Illustration is less than 100%), your built in protection is reduced. For example: - If the allocation rate is 98%, the amount of your investment that is protected reduces to 98% of 80%, which equals 78.4%.

• The proportion of your money invested in shares varies throughout the period of your investment, so returns will not reflect the performance of the overall UK stock market. • The fund will always maintain a substantial holding in cash, so it does not offer as much growth potential as an investment entirely in shares.

• The cost of the protection, as shown on your Personal Illustration, has the effect of reducing your investment's growth potential.

• A significant fall in the value of the UK stock market, either as a result of a sudden market crash or over a sustained period of time, would mean that your investment would become largely invested in cash. If a stock market recovery followed, it is likely your investment growth would be severely restricted. Therefore, we will constantly monitor your fund value and if particular circumstances occur as detailed in the ‘Fund Guide', we will write to you to explain the implications and your options.

• If an exceptional fall occurred, for example around 30% over a very short period, you would become wholly invested in cash. If this happened it would not be in your best interests to remain in the fund. Therefore, we would switch your investment into our Cash Fund and write to you to obtain your instructions.


How flexible is the Investment Bond?

• You can keep the investment for as long as you like. You can cash in all or part of it at any time, or take regular withdrawals from it to provide you with an income.

• The bond is set up as a series of identical contracts (‘policies') to give you greater choice as to how you take money from your bond and potentially to increase its tax efficiency.

• You can switch your money between our funds at any time. We currently do not make any charge for the first 12 switches in any 12 month period but we reserve the right to make a charge to cover our costs, currently £25, for any additional switch.

• You may add to your bond at any time subject to:
- us still offering the Investment Bond for new investments generally, and
- the contract terms applicable at the time.


How do I take my money out?

• You can take one-off amounts or regular withdrawals to provide you with an income at any time. This will reduce the remaining value of your investment and affect future performance. If you are invested in the Protected UK Growth Fund, withdrawing money will also reduce the amount of your built in protection. You should remember that the bond is designed to be a medium to long term investment. Any encashments in the first five years, other than regular withdrawals within the limits described below, will have an early surrender charge deducted.

• Your bond consists of a series of individual policies. You can take one-off amounts at any time by one of the following methods:
- cashing in any number of the policies while leaving the others intact
- taking an amount from all of the policies
- fully cashing in the whole bond.

This gives you considerable flexibility to withdraw money and to do it in the way that is most appropriate to your personal tax circumstances at the time. The payment of any large cash withdrawals or switch to a different fund can potentially be delayed when you are invested in the Property Fund or any fund that includes commercial property. This is because if we need to sell any property to provide your money and/or balance the interests of the remaining investors in the fund, it may be difficult to do so immediately. The value of property is generally a matter of a valuer's opinion rather than fact. Details of the underlying investment holdings of all our funds are shown in the accompanying ‘Funds Directory'.

• You can choose to receive regular payments (‘regular withdrawals') by one of the following options:
- fixed amounts of money
- a percentage of your original investment
- a percentage of the value of your units

The money is paid into your bank account every month, or if you prefer every 3, 6 or 12 months.
The maximum amount you can take as a regular withdrawal each year is either 7.5% of your original investment or 7.5% of the value ofyour units.
Important things you need to know about regular withdrawals are:

- the value of your bond will be affected, in particular if the amount of income you take is greater than the growth on the bond, theoverall value of the bond will fall.
- the amounts you receive will fluctuate, unless you choose to take fixed amounts of money
- if you are invested in the Protected UK Growth Fund, the amount of your built in protection will reduce.
The regular withdrawals options are described more fully in our ‘Product Details’ brochure.

Natural income
– an additional option available for Distribution Funds, Property Fund and Managed Bond Fund.

The assets underlying our Distribution Funds, Property Fund and Managed Bond Fund normally generate income that accumulates to benefit the overall value of each fund (such as dividends from shares, interest from fixed interest securities and rent from commercial property). The natural income option allows you to receive ‘distributions’, which are payments made from the funds twice a year based upon theamount of income accumulated.

These distributions can be paid to you in full each June and December, or alternatively, can be spread out over the six months following each distribution, to provide you with a monthly income.

Whilst taking natural income there is potential for the value of your units to grow. This will occur if the market value of the underlying assets combined with any accumulated income that has not been distributed results in an overall increase in your chosen fund’s value.


What happens to the bond if I die?

• If the bond is in one name, the bond will end on the death of that person.

• The amount payable will be 101% of the full value of your units. If you are invested in the Protected UK Growth Fund, 101% of theprotected value will be payable if greater. The early surrender charge, described in your Personal Illustration, which applies to one-off encashments in the first five years, is guaranteed not to be applied on death.

• If the bond is in the name of more than one person, the bond remains invested until the last person dies. This enables the survivor(s) tocontinue to benefit from the investment.


What about charges?

• The charges applicable, including the amount and effect of them, are shown in your Personal Illustration.

• Charges are made to cover:
a) the various costs and expenses involved when setting up and managing your bond, such as:
- investment management,
- administration,
- payment to your financial adviser and
b) if you are invested in the Protected UK Growth Fund, the cost of providing the protection.

• An initial charge is only applied when the person (or all the people if the investment is held in more than one name) holding the bondwas aged 75 or over when the investment was originally made. If the percentage shown as the ‘Allocation Rate’ on the first page of yourPersonal Illustration is 100% or more, no initial charge has been made.

• There is a recurring charge, which is referred to in your Personal Illustration as the annual management charge.

• Investment funds may also bear additional expenses which are not included in the annual management charge. The amount of these expenses is variable but an appropriate allowance for them is made when calculating the assumed benefits shown on yourPersonal Illustration.

• The annual management charge is taken into account when calculating the unit price of each fund, so the value of your bond will always benet of this charge.