your guide to our proposal - royal london

UFOB Fund

Your guide to our proposal

We want to know what you think

We have a proposal which would let us distribute more of the Estate of the United Friendly Ordinary Branch Fund to policyholders like you

sooner than would otherwise be the case.

This would increase the current value of your policy. Our proposal would give you more certainty over the amount we’ll pay out when

your policy is claimed.

THIS BOOKLET EXPLAINS WHAT YOU NEED TO KNOW AT THIS STAGE ABOUT OUR PROPOSAL

Your guide to our proposal | 3 2 | Your guide to our proposal

UFOB Fund

UFOB Fund

SECTION PAGE

1. First, some background 3

2. The Estate of the UFOB Fund 6

3. Our proposal 9

4. What our proposal could mean for you 13

5. How you can be sure our proposal is fair 16

6. Why Royal London is doing this 18

7. Timeline and what you need to do 20

8. Other changes to your policy 22

9. Important legal information 23

10. Your questions answered 29

Glossary We use some technical terms in this booklet. We’ve highlighted them all with initial capitals and italics, e.g. ‘Scheme’, and you’ll find them explained here.

34

We’ve tried to make the information in this pack easy to understand. However, we’re aware that some policyholders may have circumstances that affect their ability to understand or make a decision.

If you feel you require additional support, please contact us on 0345 646 1014 (or +441625 718587 if you’re calling from outside the UK). The team at Royal London are here to help you.

You can also find support on our website at royallondon.com/UFOBscheme.

Inside this booklet, you’ll find:

What you’ll find inside

1. First, some background

This section gives a reminder of how your With Profits Policy works and how it fits into Royal London.

About when you became part of Royal London Royal London purchased the business of the United Assurance Group (UAG) in 2000. The United Friendly policies, including yours, then transferred to Royal London. We’ve been looking after these policies ever since.

Royal London is the largest mutual life, pensions and investment company in the UK. We’ve been helping people plan for life’s financial milestones for over 150 years. As a Mutual Organisation, we don’t have shareholders. This means we can reinvest more of our profits to benefit our customers. For example, by improving products and customer service.

About your With Profits PolicyIt’s been a while since you took out your policy with United Friendly, so we’ve recapped some of its key features in the table below. If you’d like more detail, please read the How your With Profits Policy works leaflet included in your information pack.

Your With Profits Policy is one of the following types of product as stated in your letter:

Pension Endowment Whole of Life

• This type of policy builds up retirement savings which can be accessed when you choose to retire.

• At the start of the policy, you agreed to make Payments until your Selected Retirement Age.

• However, you can normally choose to retire and take your retirement savings any time after your 55th birthday.

• This type of policy pays out a lump sum after a fixed number of years.

• You make Payments throughout the term of the policy.

• If the Life Covered dies during the term of the policy, the policy pays out a lump sum.

• This type of policy pays out a lump sum when the Life Covered dies.

• You make Payments until the last policy anniversary before the 80th birthday of the Life Covered.


UFOB Fund

UFOB Fund

About our With Profits FundsRoyal London has purchased a number of insurance businesses since 2000, including UAG which owned United Friendly.

After your policy transferred to us, we set up a separate With Profits Fund called the United Friendly Ordinary Branch (UFOB) Fund. We manage your policy and certain other policies that used to be with United Friendly in this fund. The UFOB Fund is closed to new policies. This means the number of policies in the fund gets smaller as policies are claimed.

We’re required to manage the UFOB Fund separately from our other With Profits Funds.

We’re currently required to do this until the UFOB Fund is too small for us to manage efficiently. At that point, we’d merge the UFOB Fund into the Royal London Open Fund, which is a larger and more varied fund and is open to new policies.

We expect the UFOB Fund to become too small for us to manage efficiently in about 20 years.

We manage each of our With Profits Funds separately from each other. This means that each With Profits Fund needs to hold back enough money to:

• Make sure we can always pay at least the Guaranteed Minimum Amount promised to policyholders;

• Meet rules set by our Regulators; and

• Protect against future risks, e.g. the risk of investment markets performing poorly, or the risk of more policies being claimed in a particular year than we expected.

To do this, we keep a pot of money aside in each With Profits Fund which we call the Estate.

How your With Profits Policy worksThis diagram shows how we calculate the total amount we’ll pay out when your policy is claimed:

Guaranteed Minimum Amount

Final Bonus (based on your Policy Value)

Final Bonus (based on your

distribution from the Estate)

= Payout

Policy Value

Your policy has a Guaranteed Minimum Amount we’ll pay out provided you’ve made all your Payments.

We aim to increase the Guaranteed Minimum Amount by adding Annual Bonuses to it.

We may also add a Final Bonus to your payout when your policy is claimed. This is to make sure the amount we pay out reflects your Policy Value and is fair.

We calculate your Policy Value as the Payments you’ve made plus any investment returns earned, less deductions Royal London makes to cover the cost of managing your policy.

We may also increase your Final Bonus to allow for your distribution from the Estate of the UFOB Fund. At the moment this distribution from the Estate is uncertain, as we explain in the next section.


UFOB Fund

UFOB Fund

2. The Estate of the UFOB Fund

This section explains how we currently distribute the Estate of the UFOB Fund, and how this may need to change in the future.

How we currently distribute the Estate of the UFOB FundWe keep a pot of money (the Estate) back in the UFOB Fund to protect With Profits Policyholders against future risks. If those risks don’t materialise, then we can distribute some of the Estate to With Profits Policyholders in the UFOB Fund. You can think of the Estate as a ‘rainy day fund’.

We aim to distribute some of the Estate each year by increasing your Policy Value. We may also add an extra amount when your policy is claimed. Both of these are used to increase the size of your Final Bonus when your policy is claimed.

The amount we add to Policy Values each year is uncertain and could even be zero. This is because the amount of money we need to hold back depends on things outside of our control, such as the number of policies claimed each year, and uncertainty in the investment markets.

How we’d distribute the Estate of the UFOB Fund in the short termIn the short term, we could continue to distribute the Estate to With Profits Policyholders gradually as we currently do. We’d do this by potentially:

• Increasing your Policy Value each year;

• Applying an extra increase to the size of your Final Bonus when your policy is claimed.

We don’t currently expect to be able to increase the Policy Values of all With Profits Policies on 31 December 2021.

We expect we’d be able to apply an increase of 6% to the Policy Values of With Profits Policies which are claimed in 2022.

This means that if your policy was claimed in 2022, we’d be able to increase your Policy Value by 6% to allow for your distribution from the Estate of the UFOB Fund.

If your policy is claimed further into the future, we currently expect the percentage increase we’d make to your Policy Value to reflect your distribution from the Estate of the UFOB Fund to increase over time. However, this is not guaranteed, and the percentage increase we’d make when your policy is claimed could be higher or lower than we’ve shown on the previous page.

How we’d distribute the Estate of the UFOB Fund in the long termThe policies in the UFOB Fund stopped being sold in 1997, and the fund is closed to new policies. So, as policies in the UFOB Fund are claimed, the number of policies left in the fund reduces. When there are fewer policies, we don’t usually need to hold back as much of a ‘rainy day fund’ as we did in the past. This is because future risks can no longer occur for the policies that have already been claimed. We should be able to distribute more of the Estate as the number of policies left in the fund reduces.

However, the amount we need to keep back in the Estate as a ‘rainy day fund’ depends on factors outside of our control, like how future risks impact the fund or uncertainty in investment markets. So, the amount of the Estate we’ll be able to distribute to policyholders like you each year is uncertain.

This means policies which are claimed in a certain year will get more or less than policies claimed in previous years. There’s no guarantee that we’ll be able to distribute any of the Estate in a particular year.


UFOB Fund

UFOB Fund

In around 20 years’ time, we expect that there won’t be enough policies left in the UFOB Fund to manage the fund efficiently. At that point, we’d look to merge the UFOB Fund into the Royal London Open Fund. This fund is a much larger, more varied fund that is open to new policies.

When we merge the funds, we’d distribute what is left in the Estate of the UFOB Fund to the With Profits Policyholders left in the UFOB Fund at that time. We’d do this in accordance with the legal terms approved when Royal London purchased the business of the United Assurance Group in 2000.

Making sure we continue to distribute the Estate fairlyOur current approach distributes the Estate between With Profits Policyholders fairly.

In the future, as policies pay out, and the number of policies in the fund reduces, we believe it’ll become harder to continue to distribute the Estate between With Profits Policyholders fairly.

This could mean that policies which are claimed in a certain year could get much more or less than policies claimed in previous years. We don’t think it would be the fairest outcome if some policyholders receive materially different distributions from the Estate depending on when their policy is claimed.

As a result, we’ve set out a proposal in the next section to distribute the Estate of the UFOB Fund between With Profits Policyholders in the UFOB Fund in an even fairer way.

3. Our proposalThis section explains our proposal in more detail and how it would affect your policy.

We want to continue to distribute the Estate of the UFOB Fund in a fair way.

We believe the proposal we’ve set out below is an even fairer way to distribute the Estate between With Profits Policyholders in the UFOB Fund.

What is our proposal?Our proposal means we’d distribute all of the Estate of the UFOB Fund and move your policy into the Royal London Open Fund at the end of 2021.

If our proposal goes ahead, you’d gain an increase to your Policy Value…

1. An Uplift to your Policy Value

We propose to distribute the Estate of the UFOB Fund between With Profits Policyholders by applying a one-off Uplift to their Policy Values on 31 December 2021.

We currently expect the Uplift to be 8%.

2. An Uplift to future Payments you make

We’d also top up your Policy Value by applying the same Uplift to Payments you might make after our proposal is implemented as and when you make them.

The Payments you make into your policy won’t be affected by our proposal.


UFOB Fund

UFOB Fund

In exchange for this, you’d give up part of the Estate of the UFOB Fund...

1. To cover the costs of our proposal

We propose to deduct the costs of carrying out our proposal from the Estate of the UFOB Fund before we distribute the Estate to With Profits Policyholders.

Carrying out our proposal now rather than waiting until the UFOB Fund becomes any smaller means the costs of making these changes can be spread across more policies. This reduces the cost borne by each policy.

2. And to compensate the Royal London Open Fund

If our proposal goes ahead, the Royal London Open Fund would take on responsibility for holding back some of its Estate on your behalf to protect you against future risks.

We propose taking a payment from the Estate of the UFOB Fund to compensate the Royal London Open Fund for holding back some of its Estate on your behalf.

We’ve designed our proposal so that it benefits the With Profits Policyholders in the UFOB Fund. If policyholders like you are supportive of our proposal, and vote in favour of it later on this year, we believe that it’s fair that the Estate of the UFOB Fund covers these costs as part of the Scheme Contribution.

This is a different approach to other one-off costs impacting the UFOB Fund, which are required to be split equally between the UFOB Fund and the Royal London Open Fund under the terms agreed when we purchased the United Assurance Group.

The combination of these deductions together with an amount used to apply the Uplift to future Payments is known as the Scheme Contribution.

How does deducting the Scheme Contribution affect the Uplift to my Policy Value?To help you weigh up the exchange we’d like to offer you under our proposal, we’ve tried to explain the impact of taking the Scheme Contribution:

• We could distribute all of the Estate of the UFOB Fund to policyholders like you if we didn’t have to hold some of it back to protect you against future risks, and meet rules set by our Regulators. We currently expect this would be equivalent to an increase of 9% to Policy Values on 31 December 2021.

• However, we can’t distribute all of it out to policyholders now, as we do need to protect you against future risks and meet rules set by our Regulators. So under our proposal, the Royal London Open Fund would need to hold back money in its Estate on your behalf. This is used to cover the risks it is taking on.

• We need to deduct the Scheme Contribution from the Estate of the UFOB Fund to compensate the Royal London Open Fund for doing this, and to cover the costs of our proposal. After the Scheme Contribution is deducted from the Estate of the UFOB Fund, we expect to be able to offer you an Uplift of 8% to Policy Values. Therefore, the effect of deducting the Scheme Contribution has reduced the Uplift by 1%.

An Uplift of 8% is what we currently expect to be able to offer you. We’ll confirm the final Uplift and Scheme Contribution if we write to you with a formal offer to vote on later this year.

What would stay the same regardless of whether our proposal goes ahead or not?

• Your policy will still be a With Profits Policy. This means that the whole of your Policy Value will continue to go up and down with investment returns and other factors. We promise to pay out at least your Guaranteed Minimum Amount provided you’ve made all your Payments.

• We’ll continue to add Annual Bonuses to your Guaranteed Minimum Amount, in line with current practice.

• We’ll continue to add a Final Bonus when your policy pays out, when possible, in line with current practice.

• If you’re still making Payments, the Payments you make to your policy won’t be affected by our proposal.

• Your policy will still be eligible to receive ProfitShare under the terms agreed when we purchased the business of the United Assurance Group (UAG).

What do you need to do?To make these changes, we’re following a legal process known as a Scheme of Arrangement (Scheme). Using a Scheme means that policyholders like you will be asked to vote on whether our proposal does or doesn’t go ahead.

Before we start that process, we want to know if policyholders like you are supportive of our proposal. Please provide comments online, or use the comments box in the Feedback Form.


UFOB Fund

UFOB Fund

If the feedback we receive from policyholders is supportive of our proposal, the next step in the process will be to apply for approval from the High Court of Justice in England and Wales (the Court) to make you a formal offer to vote on later this year.

You can find out more about the voting process in the Important legal information section on page 23 of this booklet.

Sharing costs if our proposal doesn’t go aheadIf our proposal doesn’t go ahead, the costs incurred up until the point at which our proposal is abandoned will be allocated between the Estate of the UFOB Fund and the Estate of the Royal London Open Fund as follows:

• If policyholders are not supportive of our proposal in their feedback in response to this mailing, the costs incurred by that point won’t be charged to the Estate of the UFOB Fund. They’ll be charged in full to the Estate of the Royal London Open Fund.

• If policyholders are supportive of our proposal in their feedback in response to this mailing, but our proposal needs to be abandoned afterwards, we’ll assess how far into the process the abandonment occurs, and reduce the costs associated with the Scheme to reflect this. We’ll then share this reduced cost equally between the UFOB Fund and the Royal London Open Fund.

Will coronavirus impact our proposal?Since the coronavirus outbreak we’ve all experienced major changes to our daily lives. Royal London and each of its With Profits Funds remains in a strong financial position despite the uncertainty we’ve seen.

In recent months, economic conditions have become more stable and we’ve adapted to a new way of working. We believe now is the right time to put forward our proposal as we want policyholders like you to benefit as soon as possible.

However, we’ll continue to monitor the situation as we cannot be sure that there won’t be further disruption in the future. We’ve put in place measures to help policyholders like you give feedback in different ways.

If we believe that factors outside our control (such as changes to the coronavirus situation in the UK) mean that it’s no longer appropriate for us to continue with our proposal, we’ll write to you again.

4. What our proposal could mean for you

To bring our proposal to life, we’ve provided an example based on Sharon – a typical With Profits Policyholder in the UFOB Fund. This example shows the effect our proposal could have on a policy like yours.

The values we’ve used in this example are for illustrative purposes only. If policyholders like you are supportive of our proposal, and the Court gives us the go ahead, we’ll write to you later in the year with a formal offer. As part of the formal offer we’ll send you a personalised illustration which will show what our proposal would mean for you.

If our proposal goes ahead, your policy will still be a With Profits Policy. This means your Policy Value, including the value of any Payments you make after we implement our proposal, and the value of the Uplift applied to it, will continue to go up and down with investment performance and other factors.

Meet Sharon Sharon has a With Profits Policy in the UFOB Fund.

The value of Sharon’s policy todayCurrently Sharon’s Policy Value is £22,000 and this is made up as follows:

Guaranteed Minimum Amount £16,000

Final Bonus (based on Sharon’s

Policy Value) £6,000

Policy Value = £22,000


UFOB Fund

UFOB Fund

We’ll also aim to increase Sharon’s Final Bonus to reflect her distribution from the Estate of the UFOB Fund when her policy is claimed. For now Sharon’s distribution from the Estate of the UFOB Fund is uncertain as we don’t know what the value of the Estate will be when her policy is claimed. Our proposal will make Sharon’s distribution from the Estate more certain.

If Sharon’s policy is claimed just after we expect to implement our proposalThis table explains what we’d expect Sharon’s policy to be worth if her policy was claimed just after 31 December 2021, which is when we expect to implement our proposal.

If our proposal doesn’t go ahead

If our proposal does go ahead

Distribution from the Estate of the UFOB Fund

If Sharon’s policy is claimed just after we’d planned to implement our proposal, we expect to increase her Final Bonus by £1,320 to allow for her distribution from the Estate of the UFOB Fund.

This amount is calculated as 6% of her Policy Value of £22,000.

We’d apply the Uplift to Sharon’s Policy Value on 31 December 2021.

We currently expect the Uplift to be 8%. This would increase her Policy Value by £1,760.

This amount is calculated as 8% of her Policy Value of £22,000.

Amount paid when Sharon’s policy is claimed

If our proposal doesn’t go ahead and Sharon’s policy is claimed just after we’d planned to implement our proposal, we expect to pay out £23,320.

If our proposal does go ahead and Sharon’s policy is claimed just after we plan to implement our proposal, we expect to pay out £23,760.

If our proposal goes ahead, and Sharon’s policy is claimed just after we plan to implement it, we expect to pay out £440 more than if our proposal didn’t go ahead. Our proposal will not change Sharon’s Guaranteed Minimum Amount of £16,000.

If Sharon’s policy is claimed further in the future…In the previous section we showed the effect of the proposal on Sharon’s policy if it was claimed just after we expect to implement the proposal. Here we show the effect of the proposal if her policy is claimed further in the future.

If our proposal doesn’t go ahead

In the short term, we’ll continue to distribute the Estate of the UFOB Fund as we do at the moment. This means the increase we’ll make to Sharon’s Policy Value from her distribution from the Estate of the UFOB Fund in future years will be uncertain, but we currently expect it to increase compared to the 6% increase shown on the previous page.

By the time Sharon’s policy is claimed, the amount by which we’d increase her Policy Value from the Estate of the UFOB Fund could be materially higher or lower than under our proposal. This is because it depends on the number of policies claimed each year, and how investment markets perform between now and when Sharon’s policy is claimed.

We don’t think it’s the fairest outcome that Sharon could receive a materially different distribution from the Estate of the UFOB Fund compared to other policyholders depending on when her policy is claimed.

If our proposal does go ahead

We’ll apply an expected Uplift of 8% to Sharon’s Policy Value on 31 December 2021, so she has a certain distribution from the Estate of the UFOB Fund. By applying the Uplift, Sharon will have received the same percentage increase as all With Profits Policyholders in the UFOB Fund.

We think this is a fairer way to distribute the Estate, and gives Sharon and her family more certainty over the amount we’d pay out when her policy is claimed.

Regardless of whether our proposal does or doesn’t go ahead, Sharon’s policy will remain With Profits. That means her Policy Value will continue to move up and down with investment returns and other factors. The minimum we’d pay out is her Guaranteed Minimum Amount if she makes all of her Payments.


UFOB Fund

UFOB Fund

5. How you can be sure our proposal is fair

We may ask you to vote on our proposal later this year. This section sets out the steps we’d take to make sure our proposal is fair.We’d use a court approved process called a Scheme of Arrangement (or Scheme) to make our formal offer to you. We explain that process more on page 23. In order to make our proposal happen:

1. Royal London will review the Scheme very carefully

• Our With Profits Actuary and Chief Actuary will prepare reports which will be provided to the Court.

• Our With Profits Committee and the Royal London Board will take into account the opinions of our With Profits Actuary and Chief Actuary on the fairness of the offer to policyholders.

2. We’ll keep our Regulators informedRoyal London has shared information about the Scheme with our Regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), including a copy of the information pack we’ve sent to you.

3. An Independent Expert will review the Scheme very carefullyWe’ve appointed an Independent Expert, Mr Oliver Gillespie of Milliman, to review the Scheme. He is an experienced senior Actuary, appointed after consultation with our Regulators, who is independent of Royal London. He’ll provide a report to the Court on the fairness of the Scheme.

4. Policyholders like you will consider and vote on the SchemeUsing a Scheme of Arrangement to implement our proposal would mean that policyholders like you would be asked to vote on whether our proposal does or doesn’t go ahead.

As With Profits Policyholders in the UFOB Fund are eligible for distributions from the Estate of the UFOB Fund, we believe they should have a say in how we distribute it to them. The Scheme process gives you that say.

Before we start the court process, we want to know if policyholders like you are supportive of our proposal in your feedback in response to this mailing. If the feedback we receive from policyholders like you is supportive of our proposal, the next step in the process will be to apply for approval from the Court to make you a formal offer.

Our voting Class proposal

If we go ahead with making you a formal offer later this year, we propose that policyholders like you with a With Profits Policy in the UFOB Fund vote on the Scheme together in one Class. You can find out more about this in the Important legal information section on page 23 of this booklet.

For some Pension policies in the UFOB Fund that stopped making regular Payments before 2010, the Guaranteed Minimum Amount is significantly higher than the Policy Value. This will still be the case even if their Policy Value is increased by the Uplift under our proposal.

Therefore, we expect the value of their retirement savings to be equal to their Guaranteed Minimum Amount. As our proposal is very unlikely to change what we’ll pay out when policyholders take their retirement savings, we’ve decided to exclude these policies from our proposal.

Please provide comments online, or use the comments box in the Feedback Form, to tell us if you have any feedback on our proposal to have one voting Class or any other comments about our proposal.

5. And finally, the Scheme must be approved by the CourtEven if enough policyholders vote in favour of the Scheme, we can’t implement the Scheme unless it is approved by the Court. In making that decision, the Court will consider whether the Scheme is fair for policyholders like you.

We’ve chosen to use a Scheme, as we want policyholders like you to have your say. We hope appointing an Independent Expert, and using a court approved process, will help reassure you that our proposal is fair.


UFOB Fund

UFOB Fund

6. Why Royal London is doing this

This section explains why we think our proposal will benefit you and Royal London.

Even fairer payouts

Our current approach distributes the Estate of the UFOB Fund between With Profits Policyholders fairly. However, the percentage increase we’d apply to your Policy Value to reflect your distribution from the Estate of the UFOB Fund is uncertain. This is because it depends on how future risks impact the fund, and how investment markets perform between now and when your policy is claimed.

In the future, as policies are claimed, and the number of policies in the fund reduces, we believe it’ll become harder to continue to distribute the Estate of the UFOB Fund between the remaining policyholders fairly. This could mean that policies which are claimed in certain years could get back much more or less than in previous years.

Our proposal would mean policyholders like you would all get the same percentage increase to their current Policy Value to allow for their distribution from the Estate of the UFOB Fund. We think this is a fairer outcome for With Profits Policyholders.

More certainty

At the moment, the percentage increase we’d apply to your Policy Value to reflect your distribution from the Estate of the UFOB Fund is uncertain.

If our proposal goes ahead, you’ll have certainty over the size of this percentage increase. This means you’ll have more certainty over the amount we’ll pay you or your family when your policy is claimed.

Your policy will still be a With Profits Policy. This means that your Policy Value will continue to go up and down with investment performance and other factors.

Sharing the savings

Our proposal is part of a wider series of changes that we plan to make to our business over the next few years. These changes will simplify and modernise the way we do things for the benefit of our customers. They include modernising internal systems and processes behind the scenes.

Implementing our proposal now allows us to reduce the cost of our proposal to each With Profits Policyholder. We can spread the cost of implementing our proposal over a larger number of policyholders.

If our proposal doesn’t go ahead, eventually the UFOB Fund will be too small for us to manage efficiently and we will have to merge it into the Royal London Open Fund. If this happens, we would have to spread the same costs across a smaller number of policyholders. This could reduce the value of their distribution from the Estate of the UFOB Fund.

We’re also proposing similar changes for three of our other With Profits Funds this year. Together these changes will help us become a more efficient business.

What’s in it for Royal London?

Merging the UFOB Fund into the Royal London Open Fund will make our business simpler to manage. The changes will help us make Royal London a more modern Mutual Organisation set up for continued success.

If our proposal goes ahead, the Scheme Contribution will be paid out of the Estate of the UFOB Fund. The Royal London Open Fund will be responsible for holding enough money in its Estate to protect policies like yours against future risks. The Scheme Contribution will compensate the Royal London Open Fund for this. We’ll set it at a level that provides a fair return to the Royal London Open Fund for the risks it’s taking on.


UFOB Fund

UFOB Fund

7. Timeline and what you need to do

This section sets out the key dates we’re working to to implement the Scheme. The legal process may take longer than this, so we can’t guarantee the dates shown below.

By 7 May 202115 Jul 2021 (provisional)

Jul 2021 - Nov 2021

Tell us what you think

Complete our online feedback form or fill in and return the Feedback Form we’ve included with your information pack to let us know what you think.

We’ll tell the Court about the feedback we’ve received,

including any objections from policyholders to any part of our

proposal or the voting Class we are proposing. So please let us know if you have any

comments as soon as possible.

We’ll ask the Court for approval to go

ahead and make a formal offer

We’ll review what you tell us.

If policyholders like you are supportive of our proposal we’ll take it to the Court to ask for

approval to go ahead and make a formal offer. This is called the

Convening Hearing.

We’ll confirm the date, time and format of the Convening

Hearing in early June by updating our website

royallondon.com/UFOBscheme

You vote on our formal offer

If the Court gives us the go ahead at the Convening Hearing

we’ll write to you again later this year with a formal offer that

we’ll ask you to vote on. This will include more information and a personal illustration to help you decide how to vote.

We’ll give you at least eight weeks to vote and you’ll be

able to do this online, by post or at the Policyholder Meeting.

Feedback window is now open

Policyholder Meeting will be held

There will be a Policyholder Meeting where you can hear about our formal offer and

vote on it.

We expect that policyholders will be able to attend and vote in person but we’ll consider alternatives if we experience

further coronavirus restrictions.

The date, venue and format for the Policyholder Meeting would be confirmed if we write to you

with a formal offer.

A final decision is made by the

Court at the Sanction Hearing

If enough policyholders like you vote in favour of our proposal we would go back to the Court and ask for its final approval at

the Sanction Hearing.

We’ll explain what happened at the Policyholder Meeting and the result of the vote to the Court.

The date, time and format of the Sanction Hearing would be confirmed if we write to you

with a formal offer.

We expect to implement the

changes on this date

If the Court approves the Scheme at the Sanction Hearing

we expect to implement the changes on 31 December 2021.

We’d write to you again in early 2022 to confirm the changes

have been made and the effect on your Policy Value.

Nov 2021 Nov 2021 31 Dec 2021

When you see this symbol you’ll need to complete an action.


UFOB Fund

UFOB Fund

8. Other changes to your policy

Around the same time as we expect to implement our proposal we are also planning to make some other changes to Pension policies in the UFOB Fund.

These changes will be made even if our proposal doesn’t go ahead.

A modern Pension PolicyWhen the United Friendly Pension policies were sold, customers had to choose a Selected Retirement Age. Under the terms of these policies, their Guaranteed Minimum Amount would only apply if they retired at, or over, that age.

Nowadays, our policyholders have told us they desire more flexibility around how and when they retire. Therefore, we’re going to allow these policyholders to access part of their Guaranteed Minimum Amount if they choose to retire within five years before their Selected Retirement Age.

Payment flexibilityCurrently, under the terms of the policy, Pension policyholders are unable to change the size of their Payments or restart Payments if they’ve stopped.

We plan to give Pension policyholders flexibility over the amount they pay into their Pension. We also want to give Pension policyholders who’ve stopped paying into their policy the ability to restart making Payments.

If you have a Pension policy and restart making Payments, or increase the amount of your Payments, these will be made into a separate part of your policy which will be invested in the Royal London Open Fund. As a result, Payments made into this new part of your policy will be eligible to receive ProfitShare. However, if our proposal does go ahead, the Uplift will not apply to these additional Payments.

For any policyholders who have made Pension Protection Elections, it may not be appropriate for you to increase or restart Payments and you should seek independent financial advice before doing so.

9. Important legal information

This section contains important information about the legal process we’d use to make the changes.

To put our proposal into practice, we plan to follow a legal process called a Scheme of Arrangement (or Scheme). This process gives policyholders like you, who we refer to as Eligible Policyholders in this section, the right to vote on the Scheme. We can only implement the Scheme if the Court approves it. Our Regulators and the Independent Expert will also be involved in the process.

What is a Scheme of Arrangement?A Scheme of Arrangement allows a company, like Royal London, to enter into a binding agreement with its creditors (in this case Eligible Policyholders) and is available under Part 26 of the Companies Act 2006.

To be approved, enough Eligible Policyholders will need to vote in favour of it. We can’t go ahead with the Scheme unless enough Eligible Policyholders vote for it. We also need the Court to approve the Scheme.

Sending you this booklet is the first step in the process. We’ve broken down the remaining steps in this section of the booklet.

What policies are covered by the proposal?We want to make our proposal to Eligible Policyholders who have the policies with us of the type listed below.

With Profits Appropriate Personal Pension Policies (also known as ‘Diamond Pension Policies’)

With Profits Personal Pension Policies (also known as ‘Diamond Pension Policy Extra’)

With Profits Free-Standing Additional Voluntary Contribution Policies (also known as ‘Diamond Pension Policies’)

With Profits Endowment

With Profits Low Cost Endowment

With Profits Whole of Life


UFOB Fund

UFOB Fund

For some Pension policies in the UFOB Fund that stopped making regular Payments before 2010, the Guaranteed Minimum Amount is significantly higher than the Policy Value even if their Policy Value is increased by the Uplift under our proposal.

As a result, we expect the value of their retirement savings to be their Guaranteed Minimum Amount. As our proposal is very unlikely to change what we’ll pay out when these policyholders take their retirement savings, we’ve decided to exclude these policies from our proposal.

What is a voting Class?Class is a term which we use to describe the group of Eligible Policyholders who vote together on the Scheme.

Eligible Policyholders can vote together in one Class if their existing rights and the way the Scheme will affect them are similar enough that they are able to consider, talk about and vote on the Scheme together.

In making our Class proposal, we’ve looked at the similarity of policyholders’ rights in a number of areas, including:

• the nature and type of the different policies in the UFOB Fund

• their entitlement to distributions from the Estate of the UFOB Fund

• the size of their Policy Values

• the likely circumstances of different policyholders and how they might view the Scheme.

Having done this, we think all Eligible Policyholders in the UFOB Fund should receive the same percentage Uplift if the Scheme does go ahead, and we propose that there should be a single voting Class.

If agreed at the Convening Hearing, there will be one Class of Eligible Policyholders who will be able to vote on the Scheme.

What can you do if you object to our proposal or disagree with the voting Class we’re proposing?

Let us know if you disagree with our proposal to use a single voting Class or any other part of our proposal by completing the Feedback Form. You can do this either online or by returning the form provided in your information pack. If you disagree with our voting Class proposal, you should use the comments box in the Feedback Form and we will let the Court know.

We’ll inform the Court at the Convening Hearing of the feedback we’ve received, including any objections to our proposal. If you wish, you (or a representative) can also attend the Convening Hearing, subject to any coronavirus restrictions.

Can members of the Additional Contribution Plan vote on our proposal?An Eligible Policyholder is the legal owner of an Eligible Policy. However, the With Profits Free-Standing Additional Contribution Plans are Pension policies which are managed by Royal London as the trustee of United Friendly Insurance PLC Additional Contribution Plan (the ‘Additional Contribution Plan’).

The members of the Additional Contribution Plan save for their retirement through these Pension policies. The terms of these policies mean that Royal London is the legal owner as opposed to the members of the Additional Contribution Plan themselves.

We don’t think it’s appropriate to vote on our own proposal. Therefore, we’re proposing to ask the members of the Additional Contribution Plan to vote on the proposal instead. It is important, and fair, that their views are taken into account.

However, we’ll need approval from the Court to allow members to vote on our proposal. We’ll ask for permission from the Court at the Convening Hearing.

How do I vote?Subject to coronavirus restrictions, there will be a Policyholder Meeting where policyholders like you can consider, talk about and vote on the Scheme together. You don’t need to attend the Policyholder Meeting to vote – you’ll also be able to vote online, or by post.

We’re not asking you to vote on our proposal now and nothing will change unless enough policyholders vote in favour of our proposal and the Court approves it. However, we would like your feedback on our proposal now.


UFOB Fund

UFOB Fund

STEP 1: You tell us what you think about our proposal

After reading your information pack, you let us know what you think about our proposal, including the voting Class we’ve proposed, by completing the Feedback Form or going online to royallondon.com/UFOBscheme

STEP 2: We consider your views

If policyholders like you tell us that they are supportive of our proposal, we’ll move to the next step (the Convening Hearing). If other policyholders want us to move forward, but you object to our proposal, we’ll share your views with the Court at the Convening Hearing.

STEP 3: Our proposal is considered at the Convening Hearing

If policyholders like you are supportive of our proposal, we’ll ask the Court to consider our proposal and the Class we have proposed at the Convening Hearing.

Subject to coronavirus restrictions, you (or a representative) can also attend the Convening Hearing and present your views to the Court. We’ve provisionally arranged for the Convening Hearing to take place at the High Court of Justice in England and Wales at the Rolls Building, Fetter Lane, London, EC4A 1NL on 15 July 2021. We’ll confirm the date, time and format of the Convening Hearing in early June by updating our website royallondon.com/UFOBscheme

STEP 4: We provide you with more information on our proposal and its impact on you

If the Court is happy for us to proceed, it’ll agree at the Convening Hearing that we can provide you with a formal offer for you to vote on and will allow us to hold the Policyholder Meeting.

To help you make your decision and cast your vote, we’ll give you more detailed information on our proposal. We’ll also give you a personalised illustration showing you how we’d expect our proposal to affect your policy if it goes ahead.

STEP 5: You vote on our proposal

You’ll be able to vote online, by post, or in person at the Policyholder Meeting subject to coronavirus restrictions. We’ll confirm the date, venue and format of the Policyholder Meeting nearer the time. If enough Eligible Policyholders vote in favour of our proposal, we’ll move to the next step.

It’s important to note that you’ll be bound by the result of the vote. This means that if you don’t vote, the outcome will still apply to you. You won’t be able to “opt out”.

If enough Eligible Policyholders do not vote in favour of our proposal, the Scheme process ends and our proposal will not be taken forward.

STEP 6: The Court decides whether our proposal can go ahead at the Sanction Hearing

If the vote is passed, the final step in the Scheme process is the Sanction Hearing where the Court would be asked to approve the Scheme and confirm that we can go ahead with our proposal.

Subject to coronavirus restrictions, you can attend the Sanction Hearing and present your views to the Court either in person or through a representative. If you don’t raise concerns about the voting Class at the Convening Hearing, you could still raise objections at the Sanction Hearing. However, the Court will expect some good reasons why you didn’t object to the voting Class at an earlier stage.

The Sanction Hearing would take place at the High Court of Justice in England and Wales at the Rolls Building, Fetter Lane, London EC4A 1NL. We’d confirm the date in advance, but currently expect the Sanction Hearing to take place in November 2021.

If approved, the Scheme would become effective on a date agreed by the Court. We expect this date to be 31 December 2021. We’d write to you again in early 2022 to confirm that the changes have been made and the effect on your Policy Value.


UFOB Fund

UFOB Fund

How will the voting work?We’re proposing that there will be one voting Class so that Eligible Policyholders in the UFOB Fund will vote together on our proposal. Everyone voting will be able to vote online, by post, or in person at the Policyholder Meeting, subject to any coronavirus restrictions. After the Policyholder Meeting, we will count up the votes cast at the meeting and the relevant postal, phone and online votes we receive.

In order for the vote to pass:

• The Scheme must be approved by more than half (greater than 50%) of the Eligible Policyholders who vote (we call this the Number Test); and

• Those Eligible Policyholders voting for the Scheme must represent at least three quarters (75%) of the total value of all the votes cast (we call this the Value Test). We explain how we will work out the value of your vote below.

If the vote passes, we’ll move to the next step (Step 6) where the Court will decide whether to approve the Scheme.

What happens if the required majority of Eligible Policyholders don’t vote for the Scheme?If the required majority of Eligible Policyholders don’t vote for the Scheme, the Scheme will not go ahead. In that case, the changes outlined in this Scheme won’t take effect.

How will we work out the value of your vote?The value of your vote for the purpose of the Value Test (your Voting Value) will be based upon the Policy Value of your With Profits Policy or Policies in the UFOB Fund.

We will provide further detail on how your Voting Value has been calculated in the information pack that we’ll send later this year (if policyholders like you are supportive of our proposal, and we get the go ahead from the Court).

What happens if you have more than one Eligible Policy?If you have multiple With Profits Policies in the UFOB Fund, you will have one vote for the purpose of the Number Test.

For the purpose of the Value Test, your Voting Value will reflect all of your With Profits Policies in the UFOB Fund. We’ll notify this to you in writing if we make you a formal offer to vote on.

10. Your questions answered

We’ve answered some important questions you might have here.

If you don’t see the answer you need below, please call us on 0345 646 1014 (or +441625 718587 if you’re calling from outside the UK) between 8am and 6pm Monday to Friday (excluding bank holidays). You’ll need your policy number(s) which you can find at the top of the letter included with your information pack.

If you have a trusted family member or friend that you want to call us on your behalf, that’s no problem as long as you’re with them so that we can check that it’s okay with you.

How do I know if I’d be better off with your proposal, or with how things are today?We’ve included an example in the What our proposal could mean for you section on pages 13 to 15 of this booklet to help you understand the difference between what your policy could pay out if our proposal does or doesn’t go ahead.

As you’d still have a With Profits Policy, we cannot be certain what your policy will pay out. However, our proposal would give you more certainty over your final payout.

If policyholders like you are supportive of our proposal and the Court gives us the go ahead, we’ll send you another pack later this year. This will include our formal offer, and a personalised illustration to help you understand what our proposal could mean for you.


UFOB Fund

UFOB Fund

What do I do if I need financial advice?We hope this information pack has given you enough information to form your opinion. If you have questions on our proposal, the legal process, or the next steps then please call the number at the start of this section. However, please note we cannot give you financial advice. If you don’t have a financial adviser, you can find a professional in your area. Find out more at royallondon.com/find-a-financial-adviser

Advisers may charge for their services, but they should agree any costs with you up front.

What happens if my policy is claimed before the proposal takes effect?Our proposal wouldn’t apply to you if any of the following happens before we implement our proposal:

Pension policy Endowment or Whole of Life policy

You take your retirement savings; orYour retirement savings are paid out as a death benefit to your beneficiaries; orYou transfer your policy.

The Life Covered dies; orYou cash in your policy early; orYour Endowment policy reaches the end of its term.

What should I do if the policyholder or Life Covered has died?We’re sorry to learn that the policyholder or Life Covered has passed away. Their next of kin should call us and we’ll talk them through what they need to do. Please make sure they have the Life Covered’s or policyholder’s death certificate when they phone.

Alternatively they can visit our website royallondon.com/UFOBscheme where they can arrange for a member of our bereavements team to call them at a time that suits.

Will the UK leaving the European Union impact your proposal?We don’t believe that the UK leaving the European Union will materially affect the terms of our proposal. But, we’ll continue to monitor the economic impact of the UK leaving the European Union. If we believe it’s no longer appropriate for us to continue with our proposal, we’ll write to you again.

Why aren’t all of my policies listed in my letter?Our proposal only applies to With Profits Policies in the UFOB Fund.

For some Pension policies that stopped making regular Payments before 2010, the Guaranteed Minimum Amount is significantly higher than the Policy Value. This will still be the case even if their Policy Value is increased by the Uplift under our proposal.

Therefore, we expect the value of their retirement savings to be equal to their Guaranteed Minimum Amount. As a result, we’ve decided to exclude these policies from our proposal as they are very unlikely to benefit from the Uplift.

Any policies you have in our other With Profits Funds are not affected by this proposal. However, we may write to you in the future proposing similar changes to our other closed With Profits Funds.

How do I know this isn’t a scam?We understand that everyone needs to be cautious these days. If the name Royal London doesn’t ring any bells, we’re the largest mutual life, pensions, and investment company in the UK. We’ve been looking after your policy since it transferred to us from the United Assurance Group in 2001. So you feel safe that we’re not trying to scam you, you can find us registered with the Financial Conduct Authority here: register.fca.org.uk

I’ve changed my contact details. How can I notify Royal London?You can change your contact details online at royallondon.com/UFOBscheme. Alternatively, you can give us a call on 0345 646 1014 (or +441625 718587 if you’re calling from outside the UK). There may be certain documents we need from you to update your details.

Will your proposal impact the outstanding balance of my policy loans?Our proposal will have no impact on the outstanding balance of any policy loans you may have on your Eligible Policies. Regardless of whether our proposal does or doesn’t go ahead, we’ll still deduct any outstanding policy loans from your payout when a claim is made.

http://royallondon.com/find-a-financial-adviser

http://register.fca.org.uk


UFOB Fund

UFOB Fund

Will the proposal change the UK tax treatment of my policy?If your policy is an Endowment or a Whole of Life policy, our proposal will not impact the tax treatment of your policy for UK tax purposes.

If your policy is a Pension, our proposal may impact how the proceeds of your policy are treated for UK tax purposes. We’ll give you more information on how you may be impacted if we write to you again with a formal offer.

I’ve appointed a person under a power of attorney to look after my affairs. Do I need to tell them about this?If you’ve told us about the person that you’ve appointed under your power of attorney previously, this information pack has been sent to them to act on your behalf. If our proposal goes ahead and we make you a formal offer later this year, the lead person appointed under a power of attorney will be able to vote on your behalf.

If you’ve appointed a person under a power of attorney but haven’t told us about it yet, please call us so we can keep their information on file. You should then tell that person about our proposal and discuss this information pack with them.

I’m authorised to act on behalf of the policyholder under a power of attorney. What should I do now?You, the attorney, should read this information pack carefully and then respond on the policyholder’s behalf. You’ve received this pack because our records show that:

• You’re the policyholder’s attorney;

• If there’s more than one registered attorney, you’re the most recently registered attorney; or

• Where more than one attorney was recorded at the same time, you’re listed first.

You may not be the only attorney to have been appointed by the policyholder. Please check the terms of your appointment and if you know of anyone else appointed as an attorney, please also share and discuss this pack with them.

I’m bankrupt or about to be declared bankrupt. Do I need to tell anyone about this?If you have been declared bankrupt, ownership of your relevant With Profits Policies may have automatically transferred to the trustee in bankruptcy. If this applies to you, you should share this pack with them. If you’ve been declared bankrupt recently or you think we may not be aware of your bankruptcy, please get in touch with us.

Our policy is jointly owned. How will voting work for us?Should we proceed to a formal vote then you will be entitled to cast a joint vote as an Eligible Policyholder. We will send a formal voting pack to the address we hold.

Do I need to discuss this with the policy beneficiary?You may wish to share this pack with them, but you don’t need to.


UFOB Fund

GlossaryThe financial services industry probably isn’t the first place you’d look to find plain English. We’ve tried to make sense of the key terms in here, so please use this as a reference guide when you need to.

Term DefinitionActuary Someone who uses mathematical skills to measure risk and

estimate its financial impact.

Additional Contribution Plan

With Profits Free-Standing Additional Contribution Plans (also known as “Diamond Pension Plans”) are Pension policies which are managed by Royal London as the trustee of United Friendly Insurance PLC Additional Contribution Plan

Annual Bonus Gradual increases to the Guaranteed Minimum Amount we promise to pay out. Once added, an Annual Bonus becomes part of your Guaranteed Minimum Amount and cannot be taken away.

Chief Actuary The individual with responsibility for the actuarial function of Royal London. This role involves ensuring that the risks that Royal London are exposed to are understood and monitored on a regular basis to ensure Royal London is able to meet its liabilities to policyholders and rules set by our Regulators.

Class The group of Eligible Policyholders who vote together on the Scheme.

Convening Hearing The Court hearing where the Court is asked to approve the convening of the Policyholder Meeting.

Court The High Court of Justice in England and Wales, which will consider and, if thought fit, approve the Scheme at the Sanction Hearing.

Eligible Policies With Profits Policies in the UFOB Fund, subject to certain exceptions.

Eligible Policyholder The legal owner of the Eligible Policy.

Endowment A policy that pays out at the end of a set period of time or upon the death of the Life Covered if earlier.

Estate The Estate is the amount by which the investments of a With Profits Fund are greater than the Policy Values of the With Profits Policies in that fund.

Feedback Form A form that you can use to provide us with your feedback on our proposal, including the voting Class. A Feedback Form is included in your information pack.

Final Bonus The bonus that is added to your payout if your Policy Value is greater than your Guaranteed Minimum Amount.

The size of the Final Bonus depends mainly on the performance of investments in the UFOB Fund and it also allows for your distribution from the Estate of the UFOB Fund.

Financial Conduct Authority (FCA)

The Financial Conduct Authority is one of Royal London’s Regulators. Its objectives are to secure an appropriate degree of protection for consumers, to protect and enhance the integrity of the UK’s financial system, and to promote effective competition in the interest of consumers.

Guaranteed Minimum Amount

The minimum amount that your policy will pay out as long as you’ve made your Payments. It’s made up of your Sum Assured and any Annual Bonuses that have been added.

Independent Expert An experienced senior Actuary who will review the fairness of our proposal and provide a report to the Court. The Independent Expert has a duty to the Court and does not work for Royal London.

Life Covered The person or people on whose life a life insurance policy is based.

Milliman An international actuarial and consulting firm. Milliman is among the world’s largest providers of actuarial and related products and services.

Mutual Organisation A company which doesn’t have shareholders – its members are its customers. The profits of a Mutual Organisation may be shared amongst its With Profits Policyholders and its members, or reinvested in the organisation to give better returns or lower charges.

Number Test One of the tests that must be passed in order for the Scheme to be implemented. The Number Test is passed if more than half of the Eligible Policyholders who vote on the Scheme vote in favour of the Scheme.

UFOB Fund


UFOB Fund

UFOB Fund

Payments Regular Payments you promise to make to us in exchange for the benefits that your policy provides.

It may be that you’ve now stopped making Payments to your policy. This could be because you decided to stop making Payments, or because you reached the end of the Payment term of your policy.

For Pensions we often refer to these Payments as contributions.

Pension A policy used to build up retirement savings which can be accessed when you choose to retire any time after your 55th birthday.

Pension Protection Elections

These are elections by Pension policyholders to provide protection against lifetime allowance (LTA) excess tax charges.

Policy Value We calculate the Policy Value of your With Profits Policy as the Payments you make and any investment returns earned, less deductions Royal London makes to cover the cost of managing your policy.

Policyholder Meeting The meeting of Eligible Policyholders convened by the Court to consider and, if thought fit, to approve the Scheme.

Principles and Practices of Financial Management (PPFM)

A document maintained by an insurer which describes how a With Profits Fund is managed.

ProfitShare Royal London’s way of sharing our operating profits with some of our policyholders.

Prudential Regulation Authority (PRA)

The Prudential Regulation Authority is one of Royal London’s Regulators. The PRA is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms in the UK.

Regulators The Financial Conduct Authority and the Prudential Regulation Authority.

Royal London The Royal London Mutual Insurance Society Limited.

Royal London Board The board of directors of Royal London.

Royal London Open Fund

Our largest With Profits Fund. This fund is still open to new policies.

Sanction Hearing The hearing at which the Court will consider whether to approve the Scheme.

Scheme Contribution To help cover the costs of our proposal, including the amount used to apply the Uplift to future Payments, we need to deduct the Scheme Contribution from the Estate of the UFOB Fund.

The Scheme Contribution may also include a deduction to compensate the Royal London Open Fund for holding back some of its Estate on your behalf to protect policies like yours against future risks.

We’ll distribute all of the Estate of the UFOB Fund (minus the Scheme Contribution) at once to policyholders like you when we implement our proposal.

Scheme of Arrangement (or Scheme)

A legal process which allows a company like Royal London to enter into an arrangement with some or all of its creditors (in this case, the Eligible Policyholders) to change legal rights under an existing agreement with those creditors.

Selected Retirement Age

The age you told us you plan to retire and take your retirement savings, either when you took out your Pension policy or when you updated your details. We sometimes refer to this as normal retirement age.

Smoothing Smoothing is one of the main features of With Profits Policies and we use it to determine payouts.

We try to add Final Bonuses in a way that softens the impact of sudden movements in a fund’s underlying investments. Instead of adding big Final Bonuses in good years and small or no Final Bonuses in bad years, we try to smooth them out. So we hold back some of the investment gains earned during good years, and release them as bonuses when returns have been poorer or when the fund has made a loss.

We aim for the effect of Smoothing to cancel itself out over the long term. This means that, over time, the amounts we hold back in good years should offset the amounts distributed as bonuses in bad years.

Sum Assured The minimum amount we guarantee to pay out when your policy is claimed, excluding any bonuses, in exchange for making your Payments.

United Assurance Group (UAG)

United Assurance Group, which consisted of Refuge Assurance, United Friendly and other companies writing non profit business and/or other non life assurance business.

United Friendly United Friendly Insurance plc.


UFOB Fund

UFOB Fund

United Friendly Ordinary Branch (UFOB) Fund

The United Friendly Ordinary Branch Fund. This is one of Royal London’s closed With Profits Funds.

Uplift The percentage by which we’ll increase your current Policy Value if our proposal goes ahead.

We’d also top up your Policy Value by applying the same Uplift to any Payments you might make after we implement our proposal as and when you make them. The Payment amounts made under your policy wouldn’t be affected by the Scheme.

Value Test One of the tests that must be passed in order for the Scheme to be implemented. The Value Test is passed if those Eligible Policyholders voting in favour of the Scheme represent three quarters (75%) or more of the total Voting Value.

Voting Value The value of your vote for the purpose of the Value Test (your Voting Value) will be based on the Policy Value of your Eligible Policy (or Eligible Policies). We will provide further detail on how your Voting Value has been calculated in the information pack that we’ll send later this year (if policyholders like you are supportive of our proposal and the Court gives us the go ahead).

Whole of Life A policy that pays out when the Life Covered dies.

With Profits Actuary The Actuary responsible for advising the directors of Royal London on the discretionary aspects of with profits business.

With Profits Committee

A committee charged with considering the interests of all of Royal London’s With Profits Policyholders. It exercises independent judgement when advising the Royal London Board on how to treat With Profits Policyholders fairly.

With Profits Fund A fund that contains With Profits Policies.

With Profits Policy A policy designed to help you save for retirement, for a rainy day, or help cover expenses when the Life Covered dies. The underlying value of your policy (your Policy Value) changes with ups and downs in investment markets and other factors. However, there is a Guaranteed Minimum Amount the policy will pay out in return for the Payments you promise to make, no matter what investment markets do.

With Profits Policyholder

The holder of a With Profits Policy.

02/2021 UFOBFC BOOKLET 2021

Royal LondonRoyal London House, Alderley Park, Congleton Road, Nether Alderley, Macclesfield SK10 4EL

royallondon.com

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. Registered in England and Wales

number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.

We’re happy to provide your documents in a different format, such as Braille, large print or audio – just ask

us by calling 0345 646 1014 (or +441625 718587 if you’re calling from outside the UK).

http://royallondon.com

your guide to our proposal - royal london

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