Quantum Investing for
a better future

Contents

1. The Scottish Provident Pedigree
2. Building a more prosperous future
3. The ideal solution
4. Working for you
5. Proven investment expertise
6. Simplicity of operation
7. Benefits
8. Meeting financial commitments
9. Further details
10. Important notes

The Scottish Provident Pedigree

A proven Track Record
When planning for the future, you need to be sure that you are dealing with a company which has a proven track record and sound financial backing.

With Scottish Provident International, you can invest with confidence knowing that it is a wholly owned subsidiary of Abbey National plc, one of the top 6 banks in the UK by market capitalisation, whilst the Abbey National Group serves some 15 million customers in the UK and overseas.

Scottish Provident International operates from the Isle of Man. Since it was established in 1991, the company has enjoyed a period of strong growth, with funds under management in excess of £ 1 billion*.

Scottish Provident International is committed to providing both individual and corporate clients with an innovative range of investment, savings, retirement and protection solutions. Success has been built upon a continued commitment to investment excellence, innovative product design and providing clients and their advisers with the highest quality service.

The Isle of Man is well established as a tax-efficient financial centre, with a sound reputation for security and political stability. Isle of Man legislation provides investors with a high level of protection and security. Strict supervision of the activities of the insurance companies is exercised by the Government's Insurance and Pensions Authority and comprehensive compensation arrangements are in place to further safeguard your interests.

The financial strength of the Abbey National Group, together with the legal safeguards and political stability given by the Isle of Man location, means that you can save through Scottish Provident International with complete confidence.

* Funds under management as at 1st January 2001.

Building a more prosperous future

To allow you to enjoy the finer things in life in the years ahead, or simply to provide for a more secure future, you need to build a sizeable capital sum.

For most people, the only way to achieve this is to save for it - and the best way to save is on a regular basis. Regular saving soon becomes a habit and it is surprising how quickly savings can grow - giving you the financial security and the ability to afford the things you really want.

For many investors, bank deposits are often a sensible investment for short-term savings, either to fund immediate needs or as a source of emergency cash. However, over the years, asset-backed investments such as stocks and shares have given investors greater growth in the medium to long-term*. Time and time again, such investments have outperformed cash deposits and have provided substantial returns over and above the rate of inflation.

Quantum, from Scottish Provident International, is a medium to long-term savings plan that gives you access to the exciting and rewarding world of international stock market investment and the benefit of professional investment management.

Millions of international investors, around the world, have chosen life assurance companies as a home for their savings. However, one of the drawbacks of some savings plans is the need to save a fixed amount for a fixed number of years - often with a limited choice of options to meet changing circumstances.

But today's environment demands an investment capable of maximising returns, while also allowing the widest possible flexibility. Quantum could be the ideal solution.

By choosing to invest in Quantum now, you can build a more prosperous future and accumulate the necessary capital to realise your financial goals.

*Source: Barclays Gilt Equity Survey, 2000.

The ideal solution

Your situation as an international investor demands an investment that allows the greatest possible flexibility and choice. It must be adaptable to reflect your changing circumstances and above all you must have control.

Quantum has been specifically designed for international investors who wish to save on a regular basis over the medium to long-term, but who want the added flexibility to vary or even suspend their contributions as their circumstance change in the future. With Quantum you are in control.

• Flexible contributions -You can decide when, how much and for how long you wish to save. You can choose a currency in which you wish to save from the range available. After a period, Quantum gives you the flexibility to increase, decrease or suspend the amount you save to reflect a change in lifestyle.
  
  
• Investment opportunities - Quantum offers a comprehensive range of worldwide investment options, giving real potential for growth through awardwinning investment management. You can structure Quantum to meet your own objectives and change the investment emphasis quickly and cost effectively.
  
  
• Tax efficiency - You benefit from the tax-efficiency of an Isle of Man based life assurance policy. Under Isle of Man law, there is no liability to tax on the income or capital gains of the various funds. So, apart from any withholding tax deducted at source on income from assets held in some countries, your investment grows without any further deductions of Isle of Man tax. Please remember, that as a policyowner, you will be responsible for any tax liability that may arise as a result of your country of residence or citizenship.
  
  
• Flexible benefits - You choose the savings term which matches your requirements. Benefits can be taken as a lump sum, regular income or a combination of the two, and can be paid anywhere in the world in the currency of your choice.
  
  
• Added protection - Valuable protection for yourself and your family can be built into your Plan, providing financial security in the event of death or a critical illness. Further details are given in the Quantum Information Guide.
  
  
• Security - The Isle of Man is recognised throughout the world as a wellestablished and secure financial centre.

Working for you

Quantum doesn't impose unnecessary limits on how much or for how long you must save. At the outset you select the savings term - which can be between 5 and 30 years. At the end of this period you can leave Quantum fully invested if you wish, choosing to take benefits later.

You decide how much you would like to save on a regular basis, making any additional payments, as and when you please. Regular contributions are paid once a year, or more frequently if you wish. Quantum can be issued as a Sterling, US Dollar, Euro or Japanese Yen Plan.

Contribution Escalator Option - Once you have decided on the level of contribution you would like to start with, it makes good sense to protect its real value by choosing this Option. Your contributions would then increase automatically by either 5% or 10% of the original amount each year. The availability of this option depends on the payment method chosen (please refer to the Information Guide).

Instant Flexibility Option -You may wish to have flexibility immediately concerning the amount you save. By making your first contribution a single payment equal to the sum of regular contributions due during the Initial Allocation Period, you will then have the freedom to alter the amount you save in the early years of the Plan. Your financial adviser will provide further details of this Option, including the extra contribution amount required. This Option is not available if you have selected the Contribution Escalator Option.

Extra investment potential -The larger the contributions you make and the earlier you begin to save with Quantum, the greater the potential rewards. Larger contributions will receive an enhanced investment allocation - this can be up to 105%. To boost the value of your Quantum plan, you could benefit from a bonus at the end of your Selected Savings Term of up to 5% of your accumulated savings.

Saying together - If you and your spouse or partner wish to save together you may do so. If you do, your Plan can be arranged so that if one of you were to die the investment can continue undisturbed, allowing the surviving partner to continue saving or to take benefits.

Added protection - A successful international career can provide significant rewards and it is important to protect the lifestyle you enjoy against the unforeseen. You may wish to discuss with your financial adviser the range of protection options which can be included within Quantum, to give you the peace of mind which comes from knowing that financial help will be there at times of crisis. Further details are given in the Quantum Information Guide.

Proven investment expertise

The accumulating value of your Plan will be clearly dependent on the performance of your chosen investment funds. Quantum gives you access to a wide range of actively managed individual investment funds with advice provided by award-winning professionals.

Scottish Provident International benefits from the investment expertise of Aberdeen Asset Management Limited.

The investment philosophy and approach of Aberdeen Asset Managers focuses on achieving "growth at a reasonable price". The stock selection criteria targets companies, on reasonable or low valuations, that are likely to deliver above average growth in earnings and dividends, over the long term.

The resources of Aberdeen deliver a strong presence in all of the key economic markets of the world. This global spread provides regional expertise, superior market knowledge and research to deliver consistent investment performance. This complements the global representation of Scottish Provident International to provide dedicated support in all key regions in which the company operates.

For those who prefer to leave investment decisions to these professionals, we offer a range of broadly-based managed funds.

• Adventurous Managed Fund - Designed for investors who are prepared to accept a higher degree of risk in return for the potential of greater capital appreciation offered by international equities.
  
  
• Balanced Managed Fund - Suitable for those seeking long-term growth from a balanced spread of equities, fixed interest securities and cash and who are prepared to accept a medium risk level.
  
  
• Cautious Managed Fund -This is a lower risk fund which invests principally in fixed interest securities and cash. The fund can also hold a varying proportion of equities, depending on the fund manager's view of the investment outlook.

You may wish to keep more control of your investments by choosing from the specialist funds available, so you can tailor an investment strategy which meets your own objectives. By using the facility to switch between the available funds you are also able to change your investment emphasis quickly and cost effectively.

More details of the individual funds are given in our separate Investment Fund Guide.

Simplicity of operation

Quantum is simple and straightforward to operate. The contributions you make will be invested into your choice of investment funds. Under Isle of Man law, there is no liability to tax on the income or capital gains from the assets held in the various funds. So, apart from any withholding tax deducted at source from assets held in some countries, your investments grow without any further deductions of tax.

Each investment fund is divided into units of equal value and your contributions are used to purchase units in your chosen funds at their "offer" price. The accumulating value of your Plan is based on the "bid" price of the units that have been allocated to you.

The cost of administering Quantum and providing any protection cover you select, is deducted each month from your allocated units.

For additional flexibility your Plan can be set up as a number of separate policies, that can be dealt with independently.

Scottish Provident International will provide you with a statement of how your savings are progressing on an annual basis.

Benefits

When you reach the end of your Selected Savings Term, you can take the full value of your accumulated savings by completely encashing the individual policies making up your Quantum Plan. Benefits can be paid in any freely available currency.

There may be times when you need to have access to your accumulated fund before the end of the Selected Savings Term, yet continue to invest for the future. Quantum allows you to take cash withdrawals, although you will only be able to access the fund you have built up from regular contributions after the Initial Allocation Period.

If you choose to completely encash your Quantum Plan before the end of your Selected Savings Term, an encashment charge will be levied. You should be aware that you may get back less than you invested, especially if you encash your Plan soon after it has started.

Meeting financial commitments

Education Fees -The costs of financing your child through a private education and university can be considerable. If your career requires you to travel frequently, or if you live in a country with a poor education system, then it may be necessary to send your child to boarding school or abroad to study at university. Unless you are in a fortunate position to meet education fees from your income or existing capital, you will need to plan ahead. Quantum can assist in bringing the cost of your child's education within your financial reach. Further information on the costs of education and how Quantum provides a tailored solution can be found in the Quantum for School Fees and Quantum for Higher Education Fees leaflets, that are available from your financial adviser.

Mortgage Repayment - Buying a property - whether as an investment, to rent or simply as a home to live in - is probably one of the biggest financial commitments you are ever likely to make. The decision on how to repay a mortgage loan needs careful consideration. One of the most popular methods in recent years, has been to repay the mortgage from the proceeds of a separate investment plan with payments to your lender consisting solely of interest on the amount you have borrowed. Quantum is an ideal investment plan to repay your mortgage loan in an efficient way. Ask your financial adviser how Quantum can be structured to meet your mortgage repayment requirements.

If you are using Quantum to save for a long-term financial commitment, such as education fees or to repay a mortgage loan, you should consider incorporating protection benefits into your Plan. These valuable protection benefits will help safeguard your commitments in the event of your untimely death or occurrence of a serious illness.

Further details

The tax treatment of any benefits you take from Quantum will depend on your country of residence or domicile and personal circumstances at the time. For example if you are a UK resident you will have a possible income tax liability on a chargeable event (such as a surrender or a withdrawal exceeding 5% p.a.) which is reportable through Self Assessment. You should be aware that when you create a chargeable event Scottish Provident International is required to provide details of the chargeable event to the Inland Revenue if the value of the gain is in excess of half the basic rate threshold.

If you become a US taxpayer, you should be aware that this Plan does not qualify as a life insurance or an annuity contract for US tax purposes. As a result, increases in the cash value would be subject to current federal income taxation and protection benefit proceeds would not be excludable from the recipient's income.

Before you apply, you should satisfy yourself that you are allowed to invest in this sort of plan and are not prevented from doing so by any exchange controls or legislation that may apply to you. You are strongly advised to consult your financial adviser to discuss your own taxation position, as Scottish Provident International cannot give personal taxation advice.

To apply for Quantum, simply contact Millennium Offshore Investments

Important notes

Quantum is available exclusively through independent financial advisers and the Company regret that it is unable to give individual investment advice.

Holders of policies issued by the Company will not be protected by the UK Policyholders Protection Act 1975, if the Company should be unable to meet its liabilities to them.

Scottish Provident International is supervised by the Isle of Man Insurance and Pensions Authority. As a Scottish Provident International policyholder, the investor receives the protection of the Isle of Man Life Assurance (Compensation of Policyholders) Regulations 1991.The Company reserve the right to adjust the returns from investments to cater for any levy or charge made on the Company under these regulations or similar legislation.

It is important to know that unit prices reflect the value of the underlying assets of the funds and so can go down as well as up. Past performance is not necessarily a guide to future performance. Where a fund invests in overseas securities, the unit prices may also rise and fall purely on account of exchange rate fluctuations.

The Plan is not available in certain jurisdictions including the United Kingdom, Isle of Man, South Africa, Hong Kong or the United States or its territories*. Nor is it being offered to citizens in the US or its territories*. If you become resident or a citizen in some jurisdictions, some aspects of your Plan may have to be curtailed or modified to maintain compliance with local regulations. For example, if you purchase a Plan and later become resident in the United States or its territories*, there will be restrictions placed on your Plan while you are resident there. These include the inability to switch the funds placed with the Company among the investment options as otherwise permitted under the Plan and the inability to make contributions, which may affect the continued provision of protection benefits.

You are obliged to notify us of a change of address, residence or citizenship.

* United States territories refers to Puerto Rico, US Virgin Islands, Northern Mariana Islands, Guam, American Samoa, Wake Island and the Trust Territory (a group of islands in the South Pacific including the Marshall Islands).

The information contained in this Brochure is based on the Company's understanding of Isle of Man legislation as at July 2001. While every care has been taken, the Company cannot accept responsibility for its interpretation or any subsequent changes.