Preparing for further investments in Standard Life platforms

21 October 2010

In 2011 we plan to invest more than ever in platform technology. Before making this significant investment, we recognise the need to ensureour current systems and processes meet the expectations of our customers.

To achieve this we are carrying out a programme of additional checks to our systems. A recent review of our Wrap and FundZone platforms has found that, on some occasions, there have been delays when making income distribution payments to our customers.

Our response to delayed payments
All delayed payments to customer accounts have now been made and we have made significant steps to avoid delays like this happening in the future. We will be closely monitoring each customer account to ensure that any future manual payments that may be necessary are kept to a minimum.

We apologise to customers who have been affected by these delays. We are doing all that we can to correct our processes so that any future delays are kept to a minimum.

Who is impacted?
Customers invested in the following products have experienced delays with their income distribution:

Wrap

• Wrap Stocks and Shares ISA
• International Portfolio Bond
• Self Invested Personal Pension (SIPP)
• Wrap Personal Portfolio

FundZone

• FundZone ISA
• FundZone Investment Funds
• Retail products when invested via FundZone
• Retail Self Invested Personal Pension (SIPP)
• Retail Portfolio Bond

Action we are taking
In recognition of the delay in the payment process, we will be making additional payments to affected customers. We will be using 8% as the basis of our calculations for these additional payments.

The impact on individual customers depends on the number of income distributions they have received. However, to put these payments into context - 80% of customers will receive less than £5, and less than 2% of customers will receive more than £25.

From the end of November we'll begin writing directly to customers who will have received a payment of £25 or more, as well as customers who have closed their accounts. You can find an example customer letter here.

How will the payments be made?
For the following tax efficient products, the additional payment will be made to the product Cash Account and will not give rise to any additional tax liability:

Wrap

• Wrap Stocks and Shares ISA
• International Portfolio Bond
• Self Invested Personal Pension (SIPP)

FundZone

• FundZone ISA
• Retail products when invested via FundZone
• Retail Self Invested Personal Pension (SIPP)
• Retail Portfolio Bond

Notes:
(1) The interest payment will not count towards a customer's ISA contribution limits in either the original subscription year or the current year. (2) Although the SIPP payment is being paid directly, as detailed above this does not give rise to any additional tax liability.

The following products are not tax free and so payments will be subject to 20% withholding tax:

The following process applies to Wrap Personal Portfolios and FundZone Investment Funds:

The interest amount is paid net of tax:

• If customers are higher rate tax payers, they may need to account for any additional tax liabilities through their personal income tax return.
• If customers are non tax payers, they will be able to reclaim the tax deducted.

Additional support
Please speak to your financial adviser. You can also contact our Customer Service team for product specific information; (Calls may be recorded / monitored to help improve customer service. Call charges may vary.)

• Wrap - 0845 279 1001
• FundZone - 0845 279 2002

 
References to legislation and taxation are based on our current understanding of law and HM Revenue and Customs' practice. Legislation and taxation are liable to change in the future.