Fund Prices - Important Information

7 May 2008

Last year we identified a number of errors in the prices of some of our funds that are available through Standard Life's range of pensions and investment products. The pricing errors are linked to major system updates, including funds being moved onto a new pricing and administration platform.

We have reviewed all of our internal funds and we are continuing to review some external fund links that are affected. This work will be completed over the next few months.

We are in the process of correcting records for everyone affected by the errors in our internal funds. We are putting them back to the position they should have been in, had the error not occurred. We have already corrected over 99% of affected plan records. The remainder are mainly terminated cases and we are aiming to have these completed by the end of June.

The impact on individual customers will depend on whether the fund price that was used to buy/sell units or to calculate a fund value was too high or too low. Depending on the type of error and type of transaction, the customer could either have too many or too few units or their existing units could have been over or under-valued.

Over 90% of those already corrected required an adjustment of less than £10, with over half requiring an adjustment of less than £1.

We have written to the small number of customers who have received incorrect documentation and who will have seen an increase or decrease of more than £25 at the date of correction. The letter notified them of the error and included details of their fund holdings.

We are now starting to contact customers who had a claim settled and received a value that was too low (subject to a minimum underpayment of £10).

I very much regret this issue has arisen and any inconvenience we have caused. I am aware that errors with unit pricing can impact both intermediary and customer confidence. I want to reassure you that we have put in place further quality assurance controls and we are continuing to review our processes to significantly reduce the likelihood of this happening again. As always, we remain committed to providing our customers with the best possible levels of service.

If you have any questions please do not hesitate to contact us on the following telephone numbers. (Calls may be recorded/monitored to help improve customer service. Call charges may vary.)