Key featuresof the FlexiblePension Plan

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 1

03 Its aims03 Your commitment03 Risk factors04 Questions and answers04 What’s a flexible pension plan?04 Is this a stakeholder pension?04 How flexible is it?04 What might I get when I want to retire?04 Can I contract out of the

State Second Pension (S2P)?05 What choices will I have when I retire?06 How much can be paid into my plan each year?06 What about tax?07 Where are my contributions invested?07 Who will manage self-investments?08 What are the charges?08 Additions to your plan?08 Fund bonus08 Fund value rebate08 What other benefits can I choose?09 What happens to the plan if I die before

I retire?09 Can I transfer my plan?09 Can I change my mind?09 Who will administer my plan?09 How will I know how my plan is doing?

Read on to find out the main pointsabout your Flexible Pension Plan.You’ll also get a personal illustration,so you can put figures to the benefitsyou may receive in the future.Please take some time to go throughthese documents and put themsomewhere safe — you may wellwant to look at them again.

This key features refersto our product termsas at April 2007.

10 How to contact us11 Other information11 How to complain11 AEGON Scottish Equitable11 Special risks11 Time limits11 Terms and conditions11 Law11 Communication11 Compensation

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 2

� To build up a sum of money, in a tax-efficient way,large enough to give you a pension during yourretirement with the option, if you want, of a tax-freelump sum.

� To give you the option to self-invest (that is, to investpart of your contributions in other investmentsoutside our pension funds).

� To give you a way to contract out of the State SecondPension (S2P), if that’s right for you. You can find moredetails on this in the ‘Questions and answers’ section.

Its aims

� You and/or your employer agree to pay regularcontributions into your plan until your chosenretirement age and/or transfer your money from anexisting pension plan.

� You may pay one-off single contributions to your plan,as long as you meet our minimum contribution levels.

� You’ll allow the value of your plan to build up and thenuse it to provide a pension.

� You agree to tell us if you change jobs or change youremployment status, for example if you go from beingemployed to self-employed.

Your commitment

Risk factors� What you get back at retirement can’t be guaranteed

and will depend on:— how much you pay in — investment performance, which may go down as well

as up— plan charges— interest rates when you retire

� When you’re ready to retire, your pension maybe lower than the amount shown in your personalillustration. This could happen for a numberof reasons, for example if:— you stop paying into your plan, reduce your

contributions or take a contribution break — investment growth is less than the assumed

performance in your personal illustration— interest rates are lower than the rates used

in your personal illustration— you start taking your pension earlier than your

chosen retirement age— tax rules change— our charges increase above those detailed in your

personal illustration— you transfer your plan to another company— we reduce the level of the fund bonus or fund value

rebate to be paid� You can invest in a range of investment funds that

have different levels of risk.� If you invest in one of our with-profits funds and you

withdraw the money, we have to reduce the valueof your fund by what we call a smoothing reduction.This adjustment is to make sure that investors receivea fair share if they leave with-profits funds and toprotect the interests of the continuing investors.You can find more details in our brochure, A guideto investing in AEGON Scottish Equitable’swith-profits funds.

� We’ll invest your contributions straight away, in linewith your instructions, but you’ll still have 30 days to change your mind and cancel the plan.

� If you cancel, and in the time you’ve been investedthe value of:— any single contribution you’ve paid falls, you

may not receive back the full amount you paid in— any transfer payment you’ve made falls, the full

amount paid in may not be returned to thetransferring scheme

02 03

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 3

Questions and answersWhat’s a flexible pension plan?It’s a savings plan which helps you save for retirementin a tax-efficient way and can also pay out a lump sumor provide a pension for your family if you die beforeyou retire.

It also combines the traditional elements of a personalpension with considerable investment flexibility. You canchoose to invest your pension contributions or pensiontransfers in our pension funds (known as the insuredelement) or use the option to invest part of yourcontributions in other investments outside our pensionfunds (known as the self-investment option).

Is this a stakeholder pension?The Government has set minimum standards thatcompanies which provide stakeholder pensionsmust meet. These are to do with contribution levels,charges, and terms and conditions.

This plan isn’t classed as a stakeholder pensionbecause some of our charges, minimum contributionlevels and terms and conditions don’t match theGovernment’s minimum standards. For example,our Flexible Pension Plan offers you a greater choiceof investment options but it doesn’t provide a defaultinvestment fund, which is a minimum requirementfor a stakeholder pension plan. A stakeholder plan maymeet your needs at least as well as this plan and iswidely available.

How flexible is it?� If you invest in our pension funds (the insured

element), you and your employer can pay intothe plan regularly every month or year. You canmake one-off contributions and change regularcontributions at any time, as long as you still meetour minimum contribution level. For details of ourminimum contribution level please see our clientguide, For people who like doing their own thing.

� If you choose the self-investment option, you and your employer can only make single contributionsto the self-invested element.

� You can stop or take a break from payingcontributions at any time and leave your fund inthe plan to benefit from future investment growth.You might want to do this, for example, if you takea career break. However, any contribution breakis likely to reduce your future pension. Please lookat the section ‘What are the charges?’ for moreinformation about this.

� You can also transfer your pension to anotherregistered pension scheme. The amount transferredis called a transfer value.

What might I get when I want to retire?Your final fund value will depend on a numberof factors:� how much is paid in� how long you save � investment performance, which may go down as well

as up� plan charges

Your personal illustration shows examples of whatyou may receive in the future. Your pension will dependwhat the interest rates are when you convert the planinto your pension.

Can I contract out of the State SecondPension (S2P)?Yes, you can use this plan to contract out of S2P.It can also accept a transfer payment from an existingplan which includes a fund built up from previouscontracted-out contributions. However, you can onlyinvest your contracted-out contributions in the insuredelement of your plan, and not in the self-investedpart of the plan.

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 4

04 05

Contracting out means the Revenue will pay someof your and your employer’s National Insurancecontributions into your plan, so giving you a pensionthat replaces some or all of your S2P. The amountof National Insurance contributions paid into your planhas been calculated by the Government to broadlyreflect the value of the benefits that would have beenbuilt up for you under S2P if you hadn’t contracted out.These contributions are paid yearly.

If you’re contracted out of S2P, the rules for whenand how you can take your benefits, described in thenext section, ‘What choices will I have when I retire?’,will also apply to the part of your fund which relatesto your contracted-out contributions.

You should ask your financial adviser for moreinformation on this option.

What choices will I have when I retire?Currently you can start taking a pension from your planat any time between the ages of 50 and 75 (includingwhile you’re still working). However, the minimum ageat which you can start taking a pension will change on6 April 2010 to 55. You may be able to take yourpension earlier than this (other than any pensionbought with contracted-out contributions) if you’rein ill health.

When you retire you’ll have a number of options.You can:� convert all your plan value into a pension

(which will be taxable)� take up to 25%* of the plan value as a tax-free lump

sum, and take a smaller pension� transfer your fund to a more flexible retirement plan

and take income withdrawals within the limit setdown by the Government

� take up to 25% of the plan as a tax-free lumpsum and transfer a smaller fund into a flexibleretirement plan

*There may be restrictions on the amount of tax-freelump sum you can take — your financial adviser will beable to give you more details on this.

If you decide to go for a more flexible retirementplan and take income withdrawals, you can buya pension from a pension company at any time.

However, if you choose to leave your plan until your75th birthday you won’t be able to take any fund as atax-free lump sum. A tax-free lump sum is only availableup to and including the day before your 75th birthday.

If, by the day before your 75th birthday, you haven’ttold us how you’d like to take your pension from theplan, we’ll assume that you want to take a pensionbought from AEGON Scottish Equitable.

If you decide to buy a pension, you can buy a pensionthat suits you. For example, you could choose:� a pension that increases each year during retirement, or� a pension which is paid for a minimum period of

up to five or ten years, no matter when you die(although your pension bought with contracted-outcontributions can only be paid for a minimumof five years), or

� a pension for your husband, wife or civil partnerafter you die (the part of your fund built up fromcontracted-out contributions must be used to buythis kind of pension), or

� a protected pension, which means that if you diebefore age 75, the pension company will pay outa lump sum equal to the amount you paid to buyyour pension less any pension instalments alreadypaid (subject to a 35% tax charge)

Whichever pension you choose, you can buy it fromany pension company.

We’ll write to you before your chosen retirement dateand give you details of all your options.

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 5

How much can be paid into my planeach year?� Both you and your employer can pay into your plan. � You’ll be eligible for tax relief on any personal

contributions up to the greater of 100% of yourearnings and £3,600 each year (this limit appliesacross all pension arrangements that you makecontributions to in any year). We’ll refund anycontribution you make to this arrangement thatdoesn’t qualify for tax relief.

� If the total contributions paid by you and/or youremployer to all your pension arrangements in any yearare more than that year’s annual allowance (for the taxyear 2007/08, this is £225,000), you’ll be taxed40% of the amount paid over the annual allowance.

� Monthly contributions are payable by Direct Debit.Yearly contributions can be made by Direct Debitor cheque. Single contributions and transfer valuesare payable by telegraphic transfer or cheque.

� You can transfer the value of any pension planyou have with another company into this plan.There’s no guarantee that doing so will increaseyour total pension.

What about tax?� Your own contributions are paid net of basic rate

income tax and we collect the tax relief from theRevenue. This means that for every £100 paid intoyour plan you only pay £78. If you’re in a highertax band, you claim the extra relief from theRevenue on your yearly tax return.

� Growth in the value of the plan is free from capitalgains tax and certain types of dividends paid to theplan are free from income tax.

� Pension income will be taxed under the PAYE system,if applicable.

� When you retire, as long as any cash lump sumyou take is within the maximum limit, it’ll be tax free.However, if any part of your fund is more than youravailable lifetime allowance, and you take the excessas a cash lump sum, the excess will be taxed at55%. If you choose to take the excess as pension,the excess fund will be taxed at 25% and the pensionincome will be subject to income tax under thePAYE system.

� In some circumstances you may be entitled to takemore than 25% of your fund as tax-free lump sum.Please get financial advice to see if this applies to you.

� The current basic rate of income tax is 22% andthe higher rate is 40%.

This information is based on our understandingof current taxation law and Revenue practice, whichmay change. We recommend you get professionaladvice if you need more information on tax.

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 6

06 07

Where are my contributions invested?The amount we invest depends on the chargingstructure you’ve chosen, so we may invest either thefull amount or we may use part to cover charges.Please see your personal illustration for more details.

We offer a wide range of internal funds and externallymanaged investment funds, all with varying investmentstrategies and covering different levels of risk andpotential reward. Therefore you can choose the fundsto suit your individual investment strategy.

If you choose to invest in one of our unit-linked funds:� each of our funds is made up of units� we use the contributions to buy units in the funds

you choose� the price of one unit in each fund depends on the

value of investments

We work out the value of your plan based on the totalnumber of units you have in each fund. If the unitprices rise or fall, so will your plan value.

Our with-profits funds aim to smooth out the volatilitynormally associated with direct investment in financialmarkets. Our with-profits funds currently availabledon’t offer bonuses. We change the unit prices dailyto reflect smoothed investment returns. These arecalculated using the actual growth on the assets inthe fund and our expected growth rate for the fund.The expected growth rate isn’t guaranteed and canchange. Smoothing won’t be able to counteract theimpact of a sustained decline in investment returns.

You can find more information in our brochure,A guide to investing in AEGON Scottish Equitable’swith-profits funds. We may apply a smoothingincrease or smoothing reduction on withdrawalfrom any with-profits fund.

You can switch in and out of various funds to changethe mix of investments. You can make up to 20 freeswitches in a year and any number of funds can beswitched at any time. You can find full details inyour policy conditions booklet.

In addition, you may choose the self-investment optionunder your plan. This option allows you to invest directin certain types of investments, including stocks andshares, investment trusts, open-ended investmentcompanies (OEICs), unit trusts and fixed interestsecurities. We recommend you get financial adviceon these options before you choose where to invest.

Because of the nature of property investment, we reservethe right to delay any switch request if market conditionsmake it necessary. This is because investments in landand property might not sell right away, so you might notbe able to sell/cash yours in when you want to.

Who will administer self-investments?Capita SIP Services does the day-to-day administrationof the self-investment part of your plan. You can instructit direct or appoint an external investment managerto act on your behalf.

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 7

What are the charges?We charge for managing the insured element of yourplan and investments. We take these charges throughdeductions from your plan over the years until you finallytake all your benefits. We take these charges from yourfund value.

Your personal illustration shows the charges applicableto, and the effect they have on, your fund. We may varythe charges and our terms in the future. You can findmore details in your policy conditions.

If you choose the self-investment option, Capita SIPServices charges for managing this part of your plan.These charges are deducted from the value of theself-investment funds. Please ask your financialadviser for more details of these charges.

Additions to your planDepending on the charging structure you choosewe’ll either add a fund bonus or a fund value rebateto your plan.

Fund bonusIf you stay invested with us for up to 10 years, you canreceive up to a maximum of 4% of the value of your fundas a bonus, as well as a further 0.5% a year after that.The bonus will depend on the original contribution levelagreed at the start of the plan and assumes that allcontributions are paid to the date that the bonus ispayable. Any additional increases in contributions/one-off contributions/transfers will receive a separate fund bonus.

Fund value rebateEach month we calculate the total value of your plan,including any contracted-out value. If the value of yourplan is £20,000 or more we’ll add units to your plan.If the value is between £20,000 and £250,000 thiswill be equal to 0.50% of your fund value a year.If your fund value is £250,000 or more this willbe equal to 0.60% of your fund value a year.

Please have a look at your policy conditions formore information.

What other benefits can I choose?You can choose to take waiver of contributionbenefit as a separate plan set up alongside this plan.This would pay your contributions into the insuredelement of your plan if you become ill and areunable to contribute to your plan. You don’t haveto take this benefit.

You can apply for this benefit on the same applicationform as for this plan.

The cost of this benefit can vary depending onyour occupation and health. It’ll stop if you stoppaying into your plan.

IND_250028_04_07_P6_Approved 22/3/07 5:08 pm Page 8

08 09

What happens to the plan if I diebefore I retire?We’ll pay the value of your fund as a cash lump sum.If you’ve arranged your plan under trust, we’ll paythe lump sum to the trustees. If it’s not arranged undertrust, we’ll decide who to pay the lump sum to.We take into account your circumstances whenyou die and anyone you’ve previously stated youwant the money to go to.

This lump sum will be checked against your availablelifetime allowance, and any amount over the allowanceamount will be taxed at 55%.

You can opt to have this lump sum paid as a pensionto your husband, wife, civil partner or dependants.If paid as a pension, it wouldn’t be checked againstthe lifetime allowance and there would be no taxcharge (although the pension would be taxable asincome under PAYE).

The fund built up from contracted-out contributionsmust normally be used to provide a pension for yourhusband, wife or civil partner. If you’re not marriedor don’t have a civil partner, it can be paid as a lumpsum to your dependant(s).

Can I transfer my plan?You can transfer your plan to another registered pensionscheme with another company at any time before youstart taking a pension. Your personal illustration givesexamples of how much you could transfer to anotherplan depending on when you transfer.

Can I change my mind?After you’ve invested, we’ll send you a notice tellingyou of your right to change your mind and how to cancel. You’ll then have 30 days in which to cancel.If you decide to cancel, let us know within the 30-daycancellation period we’ll cancel the entire plan and giveyou your money back. This may be less than you paid inif the value of your investment has fallen during this time.

It might not be possible to cancel all your investments,for example property. If this happens, there might be adelay in cashing in your investment and the value couldfall during this time. You might still be charged certainfees with some investments, for example solicitors’ feesfor a property purchase.

If you decide to cancel and have made a transfer payment,we may not be able to return the full amount paid back tothe transferring scheme if the value of your investment hasfallen during this time.

Who will administer my plan?AEGON Scottish Equitable provides the pensionvehicle and administers the investment of the insuredelement of your pension contributions in our funds.Capita SIP Services administers the self-investmentpart of your plan.

How will I know how my plan is doing?We’ll send you a statement each year, telling youhow your plan is performing and its current value.

To find out how our funds are performing, you cancheck our prices on our website at www.aegonse.co.uk

IND_250028_04_07_P6_Approved 22/3/07 5:09 pm Page 9

How to contact us

If you have any general questions at any time, you can phoneus, write to us or email us.

Telephone: 08456 10 00 10

Monday to Friday,8.30am to 5.30pm

AEGON Scottish EquitableEdinburgh ParkEdinburgh EH12 9SE

Email: enquiries@aegon.co.uk

We may record and monitor calls for security purposes,to help improve our service and to resolve any complaints.

If you want to make additional contributions or switch funds,you should first of all speak to your financial adviser. We’re notallowed to give any financial advice. If you’ve any doubts overwhether this contract is suitable for you, you should seek advicefrom your financial adviser.

IND_250028_04_07_P6_Approved 22/3/07 5:09 pm Page 10

Other information

10 11

How to complainIf you’d like a copy of our internal complaint handlingprocedures, please ask us.

If you ever need to complain, first write to us at theaddress shown above. If you’re not satisfied withour response, you can complain to:

The Financial Ombudsman ServiceSouth Quay Plaza183 Marsh WallLondon E14 9SR

Telephone: 0845 080 1800Website: www.financial-ombudsman.org.ukEmail: enquiries@financial-ombudsman.org.uk

Complaining won’t affect your right to take legalaction later on.

AEGON Scottish EquitableScottish Equitable plc (now known as AEGON ScottishEquitable) was established over 170 years ago.

As part of the AEGON Group, we benefit from thefinancial strength of one of the largest life insurancecompanies in the world, which has assets underadministration of around £250 billion (this includesall revenue-generating investments).

Our main areas of business are life (for examplelife cover and critical illness cover) and pensions(for example personal pensions, group personalpensions, stakeholder pensions, group stakeholderpensions, self-invested personal pensions andcompany pension schemes).

The services we provide include processing yourapplication and administering your plan, trust, schemeor arrangement. We’re the scheme administratorfor the Scottish Equitable Personal Pension Schemeand Stakeholder Pension Scheme, and trustee andscheme administrator for the Scottish Equitable Self-administered Personal Pension Scheme.We provide technical support and informationto financial advisers and planholders.

Scottish Equitable plc is on the Financial ServicesAuthority (FSA) register (No 165548).

Special risksIn this document we’ve clearly highlighted any risksassociated with taking out this AEGON ScottishEquitable product.

Time limitsWe’ll let you know of any time limits that may applyand that aren’t covered here or in your personalillustration.

Once you’ve completed the relevant application formsyou must let us know if there are any changes in yourcircumstances between then and the date your planstarts.

Terms and conditionsThis document only gives you a summary of thefeatures of our Flexible Pension Plan. You can findfull details in your policy conditions booklet. We’ll writeand let you know if there are any changes to the termsand conditions of your plan.

LawIf, when the contract starts, you reside in the UK, then the applicable law is the law of that part of theUK where you reside. Otherwise Scots law will apply.The applicable law can only be changed if both youand AEGON Scottish Equitable agree.

CommunicationOur contract with you is in English and anycommunications about it will also be in English.

CompensationIf this product was recommended to you by a financialadviser, you may have a legal right to compensationif it’s established that the recommendation wasunsuitable when it was made.

The Financial Services and Markets Act 2000 coversyour plan. You can get information on compensationarrangements from AEGON Scottish Equitableon request. If you need any further information, you can get it from the Financial Services Authorityor the Financial Services Compensation Scheme.

IND_250028_04_07_P6_Approved 22/3/07 5:09 pm Page 11

C 250035IND 250028 04/07

Scottish Equitable plc, Registered Office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517).Authorised and regulated by the Financial Services Authority. Member of the AEGON Group. www.aegonse.co.uk

We’re determined to treat you fairly andcommunicate clearly with you at all times.

As well as following the Financial ServicesAuthority’s Treating Customers Fairlyprinciples, we’re fully signed up to theAssociation of British Insurers’ CustomerImpact scheme.

Both of these cover how products aredesigned and marketed, and ensure we deal fairly with all claims and payments.

As part of the Customer Impact scheme, we publicly commit to putting customers at the core of our business and must showhow we’re achieving this.

For more information visit: www.aegon.co.uk/customerimpact

IND_250028_04_07_P6_Approved 22/3/07 5:07 pm Page 1