| What is it? | Charging & commission options | Potential clients |
5 for Life - certainty and control for your clients
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| Guaranteed income | Money-back guarantees | Access | Potential for growth |
Guaranteed income
5 for Life guarantees the client at least 5% of their original investment – every year for life. It might go higher than 5% (see potential for growth) but it will never go down – unless the client decides to cash-in some or all of their plan (see Access).
| Guaranteed income | Money-back guarantees | Access | Potential for growth |
Money-back guarantees
There are two money-back guarantees:
- On cash-in – after the tenth anniversary of the plan, if the client decides to cash-in their plan we'll pay the higher of:
The original investment less any regular income received so far
Or
The cash-in value of the plan
- On death – we'll pay the higher of:
The original investment less any regular income received so far
Or
100.1% of the cash-in value
| Guaranteed income | Money-back guarantees | Access | Potential for growth |
Access
It's the client's money, not ours. So if they need to they can cash-in some or all of their plan. They do this by cashing-in whole segments of the plan – there are 10,000 segments in total.
It's important to remember that if the client does cash-in some or all of their plan, the guaranteed income and money-back guarantees will reduce by the same proportion.
| Guaranteed income | Money-back guarantees | Access | Potential for growth |
Potential for growth
Two exciting features of 5 for Life are the future income escalator and income escalator. You can learn more about them in your 5 for Life technical guide.
Both give the client the opportunity to benefit from any growth in their plan. If the cash-in value on the relevant anniversary is higher than at any previous review date, we'll calculate the new guaranteed income amount on the higher value. And once it goes up, it won't go down.
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| Standard menu options | Guarantee option fee | Ad-hoc charges |
Standard menu options
The table below sets out the three different standard options:
| Feature/charge | Options | ||
|---|---|---|---|
| A | B | C | |
| Initial commission | Nil | 7% or 5% + 0.25% IFBRC or 3% + 0.5% IFBRC |
4.5% or 2.5% + 0.25% IFBRC or 0.5% + 0.5% IFBRC |
| Allocation rate | 100% You can give up initial commission for extra allocation on a one-for-one basis. |
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| Annual management charge | There are specific charges for our Create range, Multi-manager portfolios and Core portfolios. Please see our 5 for Life – Our full range of investments leaflet for more information. | ||
| Guarantee option fee | There are specific charges for the guarantee option. This depends on the investment choice. You can find the current levels by selecting 'Guarantee option fee' above | ||
| Establishment charge | Nil | 1.25% for five years | 0.75% for five years |
| Cash-in charge | Nil | Outstanding establishment charges | Outstanding establishment charges |
AEGON Scottish Equitable International reserves the right to vary charges at its discretion.
| Standard menu options | Guarantee option fee | Ad-hoc charges |
Guarantee option fee
Core and Multi-manager portfolios:
These portfolios are constructed using a mix of the UK Fixed Interest Fund (shown as the first percentage below), managed by AEGON Asset Management and the UK Index Tracker Fund (shown as the second percentage), managed by BlackRock Merrill Lynch.
| Portfolio choice | Cost of guarantee option |
|---|---|
| 40/60 portfolio | 1.5% |
| 50/50 portfolio | 1.0% |
| 60/40 portfolio | 0.75% |
| 70/30 portfolio | 0.5% |
Create range:
The guarantee option fee here is based on the percentage that's invested in the Category B and Category C funds. Where the percentage that's actually invested doesn't directly match a percentage in the table below, the charge will be calculated by interpolating between the numbers in the table.
| Category B + Category C percentage holdings | Cost of guarantee option |
|---|---|
| > or = 60% | 1.5% |
| 50% | 1.0% |
| 40% | 0.75% |
| < or = 30% | 0.5% |
AEGON Scottish Equitable International reserves the right to vary charges at its discretion.
| Standard menu options | Guarantee option fee | Ad-hoc charges |
Ad-hoc charges
Here we detail the ad-hoc charges of 5 for Life:
| Charge | Details |
|---|---|
| Switching charge | 12 free switches in a plan year. Any additional switches will be charged at 1% of the switch value or £25, whichever this is higher. |
| Valuation charge | Each year, we'll issue a valuation of the plan. A further three valuations each year can be requested, free of charge. Additional statements can be requested at a cost of £40. |
AEGON Scottish Equitable International reserves the right to vary charges at its discretion.
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| Taking yearly withdrawals from an onshore bond | Savings in bank or building society account | Part of a wider portfolio | Property owners considering downsizing |
Taking yearly withdrawals from an onshore bond
Scenario:
- The client has an investment bond, with-profits bond or distribution bond.
- They intend to use if for an income or are already using it for an income.
- They've taken it out in the last five years and may be reviewing it.
- They like the option of 5% tax deferred withdrawals for 20 years.
Why 5 for Life?
- The income is guaranteed – unlike a bond, if the capital runs out, the client will still get their yearly income – for life.
- There's an opportunity for the income to increase above 5% of the original investment through the income escalator features.
- If the client likes the thought of 5% tax-deferred withdrawals, with 5 for Life a male age 65+ and a female age 69+ gets tax-free return of capital of more than 5% of their original investment for life – unlike a bond, it doesn't stop after 20 years.
- Like a bond, the capital is still invested so the client still has control over it.
| Taking yearly withdrawals from an onshore bond | Savings in bank or building society account | Part of a wider portfolio | Property owners considering downsizing |
Savings in bank or building society account
Scenario:
- The client has a large amount of money in a bank or building society account.
- They may be using it to pay for their essential expenditure.
- The amount the client takes out every year is more than the interest they're receiving so they'll be eating into their savings. And once their savings are gone, their income will stop.
Why 5 for Life?
- The guaranteed income can cover essential expenditure and will always be there even if the original investment runs out.
- The capital in the bank account is more secure, but with 5 for Life their money is invested so could benefit from growth.
- The client still has access to their money if needed.
| Taking yearly withdrawals from an onshore bond | Savings in bank or building society account | Part of a wider portfolio | Property owners considering downsizing |
Part of a wider portfolio
Scenario:
- The client has been a keen investor and has built-up considerable wealth.
- They're already familiar with investment type products already.
- They're looking to generate income as part of a wider portfolio that still aims to achieve capital growth.
Why 5 for Life?
- A 5 for Life plan can provide them with the income they want as part of their portfolio – and is guaranteed.
- Their money is still invested so could benefit from growth.
- The client still has access to money if needed.
| Taking yearly withdrawals from an onshore bond | Savings in bank or building society account | Part of a wider portfolio | Property owners considering downsizing |
Property owners considering downsizing
Scenario:
- The client needs to generate income for their retirement.
- Their biggest asset is their house.
- They're considering downsizing to generate money.
- The client has only one opportunity to do this so must ensure the income they generate will last.
Why 5 for Life?
- They can generate guaranteed income which is payable for life – so if their capital runs out, their income won't.
- The money is still invested so could benefit from growth.
- The client still has access to their money if needed.
Tools
We like to make life as simple as possible for you. So here's some online tools to help you demonstrate the key benefits of 5 for Life to your clients:
Portfolio builder - build a carefully balanced portfolio for your client using our Create range.
Life expectancy - we know we're living longer. Find out how likely a 60-year-old is to run out of money before they die.
Retirement IQ - this unique quiz will help clients appreciate the need to carefully plan their retirement income.
Capital content calculator - quickly calculate how much of your client's regular income will be subject to tax...if any!
Celebrate 5 for Life with our special offer
Charging option A – get an extra 1% allocation on all investments
Charging option B – get an extra 0.5% initial commission
Charging option C – get an extra 0.5% initial commission
...another 3 reasons to cheer 5 for Life!
