You can invest in four funds through your Personal Investment Plan (PIP) – you can make additional payments to, or move your investment between, these four funds at any time. This is currently free of charge.
A Yearly Management Charge (YMC), which is a percentage of the fund value, is deducted from each fund and is reflected in the unit price each day. The YMC doesn’t include any additional expenses for operating the fund. These additional expenses are added to the YMC to form the total yearly fund charge. The table below shows the YMC and the current estimated total yearly fund charge for each fund:
|Scottish Widows funds||Yearly Management Charge||Current estimated total yearly fund charge|
|Cautious Growth Fund||1.35%||1.41%|
|Balanced Growth Fund||1.35%||1.53%|
|Progressive Growth Fund||1.35%||1.50%|
|Adventurous Growth Fund||1.35%||1.51%|
Based on fund information as at April 2018.
Our charges can change, and may increase if:
- there’s a change in a tax rule or law which affects us, or the plan
- exceptional circumstances result in an increase to our costs to administer the PIP, or cause our income from charges to be less than we anticipated.
We will give you three months’ notice if we change our charges.
Reduction in yearly management charges
If the total amount you’ve paid into your plan is over £125,000 we’ll currently reduce your YMC by 0.15%. We’ll do this by adding extra units to your plan on the 31st December each year. If you made a withdrawal that reduced your total investment amount to under £125,000 then the YMC reduction wouldn’t be applied for that year. Movements in the value of your plan aren’t taken into account when calculating the level of reduction in the yearly management charge.
You may also receive a reduction in your YMC of up to 0.5% if you’ve added any money to your plan, on or after 1st October 2012. This reduction will only be applied to the additional payment and not to the whole of your investment. We’ll apply this reduction by adding units to your plan at the end of each calendar year.
Will I get a loyalty bonus?
Depending on how long you invest in the plan you may be eligible to receive a loyalty bonus. Each loyalty bonus is calculated based on the average daily plan value over a given time, as shown in the table below. It’s paid by adding units to the plan, as long as your plan is still invested when the loyalty bonus is due.
You can find more information about charges, loyalty bonuses and reductions to YMC on pages 3–4 of the Key Features.
|Loyalty bonus due date||Bonus units added|
|5th plan anniversary||0.5% of the average plan value up to the 5th plan anniversary|
|10th plan anniversary||0.75% of the average plan value between the 5th and 10th plan anniversaries|
|15th plan anniversary||1% of the average plan value between the 10th and 15th plan anniversaries|
Investment approaches at a glance
There are a number of ways to evaluate risk. The Cautious Growth Fund, Balanced Growth Fund, Progressive Growth Fund and Adventurous Growth Fund have been categorised using the investment approaches shown below.
We don’t currently offer funds for the 'Secure' or 'Specialist' approaches within the PIP.
Funds have exposure to different types of investments as described in the fund aims. These investments can include bonds (also known as fixed interest securities), equities, property, commodities and alternative investments depending on the fund’s investment objectives.
We may change what the funds are invested in, and the selection of funds that we make available.
| These investments provide safety to the amount invested and can be expected to offer relatively low growth over the medium to long term. They cannot fall in actual value, but can fall in ‘real’ value due to the effects of inflation.
(Not offered within PIP).
|These investments are expected to have a relatively modest risk to the capital value and/ or income. They have the potential to provide income, and/or, over the medium to long-term, relatively modest capital growth. The capital value may fluctuate, although some products may offer an element of capital protection.||These investments carry a risk of loss to capital value but have the potential for capital growth and/ or income over the medium to long term. Typically they do not have any guarantees and will fluctuate in capital value.||These investments are expected to have a relatively significant risk of loss to capital value, but with the potential of relatively more capital growth over the medium to long term. They do not offer any guarantees and will fluctuate in capital value.||These investments carry a relatively much higher risk of capital loss but with the potential for relatively higher capital growth over the medium to long term. They may be subject to a considerable level of fluctuation in capital value. They do not offer any guarantees.|| These investments carry a very high risk of capital loss, but with the potential for a higher return over the long term. They are very volatile and are only suitable for clients who can afford to, and are prepared to, risk the entire capital value. They do not offer any guarantees.
(Not offered within PIP).
We categorise investment periods as follows:
Short-term: Up to 5 years
Medium-term: Between 5 and 10 years
Long-term: Over 10 years
Investment risk can change over time
Over time your investment could move away from your preferred level of risk, either becoming less risky (normally with less potential for growth) or more risky (normally with more potential for growth). This happens when some assets within a fund perform better than others. For example, if equities in a fund grew at a higher rate than other assets, such as gilts and fixed interests, more of the fund’s underlying investments would be in equities. This would increase the level of risk for the fund because equities are considered to be higher risk, as they are more likely to have fluctuations in value and so the chances of your fund reducing in value is higher.
So it’s important to regularly review your fund choices and check they’re still right for you. Your latest annual statement will provide you with details of the funds you’re currently invested in, and you can review your fund’s fact sheet for more information – including where your fund invests, its aims and the past performance.