Saving for retirement

Contents

1. Planning for a prosperous retirement
2. Putting you in control
3. The Scottish Provident International pedigree
4. Working for you
5. Proven investment expertise
6. Financial security before retirement
7. Simplicity of operation
8. Retirement options
9. Further details
10. How to apply

Most of us look forward to an active and fulfilling retirement, when we will have more time for hobbies and pastimes which we currently enjoy.

It may seem a long way off and only a small part of our life, but with the trend of early retirement and advancements in medical science, our twilight years are upon us earlier and for a longer period than many of us anticipate. However, the sad fact is that for many people what could be the most satisfying period of their life turns out to be a time of financial pressure and anxiety.

Whatever dreams you may have for your retirement, the key to making them a reality is to ensure that you have a comfortable retirement income and accumulate sufficient capital to give you true financial independence. You need to plan ahead and the earlier you begin the more time your savings will have to grow, and the more prosperous your retirement can be.

An international outlook
Saving for retirement is particularly important if you live and work away from home - indeed you may move from country to country during the course of your career which makes sound financial planning even more essential.

Although you could well be earning a higher level of income than your counterparts at home, it is equally likely that you will not be included in the sort of company pension scheme which home country employees often enjoy - and sometimes take for granted.

Even if you were covered by a local state pension scheme, it is unlikely to provide you with an adequate level of income when you retire. To ensure that your current standard of living can be maintained into retirement, you need to make your own independent arrangements.

By choosing to invest now in MOMENTUM from Scottish Provident International, you will be able to plan ahead for the retirement of your dreams.

MOMENTUM has been designed exclusively for the discerning international investor who requires a complete financial planning package. The Plan offers real security and peace of mind for you and your family throughout your working life, enabling you to reap the benefits in your retirement. MOMENTUM is adaptable to reflect your changing financial circumstances throughout your working life. You are firmly in control to tailor the plan to meet your own specific requirements.

Flexible contributions
MOMENTUM allows you to decide when, how much and for how long you want to contribute in a choice of currencies, whether as a regular contribution, lump sum or a combination of both. MOMENTUM gives you the flexibility to increase, decrease or suspend the amount you save to reflect a change in lifestyle. You can even incorporate insurance to maintain your contributions if you fall ill or have an accident and are unable to work.

Flexible benefits
You choose the retirement age which meets your specific requirements. Benefits payable can be taken as a lump sum, regular income or a combination of the two, payable anywhere in the world in the currency of your choice.

Investment opportunities
MOMENTUM offers a comprehensive range of world-wide investment options, giving real potential for growth through award-winning professional management.

Added protection
Valuable protection for yourself and your family can be built into MOMENTUM, providing financial security in the event of death, the diagnosis of a critical illness or an extended period of hospitalisation.

Tax-efficiency
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 investments grow without any further deduction of tax.

The tax treatment of any gains and benefits you take from MOMENTUM, including the payment of protection benefits, depends on your country of residence or domicile and personal circumstances at the time.

Portability
MOMENTUM is personal to you. This portability normally means you can take it with you even if you change jobs or move to a different country.

Security
The Isle of Man is recognised throughout the world as a well established and secure financial centre.

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.

Operating from a secure base The Isle of Man is well established as a tax-efficient financial centre with a sound reputation for security and political stability. Strict supervision of the activities of insurance companies is exercised by the Isle of Man Government and comprehensive compensation arrangements are in place to further safeguard investor's 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 invest through Scottish Provident International with complete confidence.

* Funds under management as at 1 st January 2001.

MOMENTUM doesn't impose unnecessary upper limits on how much or for how long you must contribute. At the outset you select the retirement age which meets your requirements - this can be any age up to 75.

Payment flexibility
You then simply decide how much you would like to contribute. Payments can be either by lump sum, a regular amount or a combination. Whichever you choose, you can make additional payments as and when you please. MOMENTUM can be issued as a Sterling, US Dollar, Japanese Yen or Euro.

Regular contributions
For most people the best way to build up a sizeable retirement fund is to save on a regular basis. Regular saving becomes a habit and it is surprising how quickly your fund can grow. You can pay regular contributions once a year, or more frequently if you wish.

Regular contributions are normally made up to your selected retirement age, although you can choose a shorter payment term at outset if you wish. This allows you to match your contributions to your own personal circumstances.

Once you have decided the level of regular contribution you would like to start with, it makes good sense to protect its real value by choosing the Contribution Escalator Option. You can choose whether your contributions increase automatically by either 5% or 10% per annum. The availability of this option depends on the payment method chosen (please refer to the Information Guide).

The flexibility of MOMENTUM means that your regular contributions can be amended after an initial period. Yourpayments can be reduced, increased or suspended for a time. If you want to stop your contributions altogether this is also possible. You can leave the value of your accumulated savings fully invested to obtain the benefit of future investment performance.

Extra investment potential
The higher the contributions you make and the earlier you begin to invest in MOMENTUM, the greater the potential rewards. To boost the value of your retirement fund even more, two types of bonus could be added to your plan. A minimum of 100% of your contributions will be invested into your chosen funds. For larger annual contributions we will actually invest up to 105% on your behalf. In addition, you could benefit from a bonus at your selected retirement age of up to 5% of your accumulated savings.

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.

Recognising the changing needs and attitudes of clients around the world, Scottish Provident International now offers a comprehensive range of equity, specialist, bond, deposit, currency and risk-rated managed funds.

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 rincipally 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 create a more defined portfolio to meet your investment outlook and objectives. This is possible by selecting from the specialist funds available. By using the facility to switch between funds you are able to change your investment emphasis quickly and cost-effectively.

A successful international career can provide significant rewards and it is important to protect the lifestyle you enjoy against the unforeseen. MOMENTUM offers a range of valuable protection options to give you the peace of mind which comes from knowing that financial help will be there at times of crisis.

Life Assurance Protection
Should you die before your chosen retirement age, the greater of the value of the units at bid price or 101% of the surrender value of your MOMENTUM retirement fund will be payable to your estate. However, you may feel that you want to build additional life assurance cover into your Plan. You have two choices. You can select a guaranteed amount of cover that would be paid on your death - which would include the value of your retirement fund. Alternatively you could choose an amount of cover that would be paid in addition to your retirement fund.

You can also arrange for the level of cover you have selected to increase automatically by 5% or 10% per annum - perhaps to keep pace with your anticipated earnings.

In the unfortunate event that you are diagnosed as having a condition which will lead to death within 12 months you may, if you have selected additional life cover, choose to receive an advance payment of your death benefit, allowing you access to your money and providing peace of mind for your partner, spouse or family.

Critical Illness Cover
Safeguarding the future for your dependants on your premature death is obviously essential. But what about the financial hardship which can be caused if serious illness strikes?

You might need cash to help you through a period of convalescence before you can start work again. You might be faced with the cost of immediate surgery or you could simply want to rearrange your financial affairs - perhaps paying off your mortgage.

MOMENTUM's Critical Illness Cover option can be chosen if you have also selected additional life assurance cover. It could provide a vital cash lifeline just when you need it most, helping to relieve the financial burden of a health crisis. An advance payment of some or all of your life assurance cover would be made if you were diagnosed as suffering from one of the following illnesses or conditions:

• Cancer
• Heart Attack
• Multiple Sclerosis
• Stroke
• Kidney Failure
• Heart Surgery
• Major Organ Transplant
• Paralysis
• Blindness
• Total Permanent Disability
• Severe Burns
• Coma
• Deafness
• Motor Neurone Disease
• Alzheimer's Disease
  
  MOMENTUM could help you to face the critical moments in your life with confidence.

MOMENTUM is simple and straightforward to operate. Each investment fund is divided into units of equal value and your contributions are used to purchase units in the funds of your choice. The accumulating value of your retirement fund is based on the price of the units which have been allocated to you.

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 the future. Where a fund invests in overseas securities, the unit prices may also rise and fall purely on account of exchange rate fluctuations.

The cost of administering MOMENTUM and providing any protection cover you select, is deducted each month from your retirement fund.

Of course, your needs may change over time. With MOMENTUM you can review the cover you have selected. There may be times when your responsibilities increase perhaps on marriage or the birth of a child - and you would like to increase the level of your life assurance cover.

Within certain limits, and subject to certain restrictions, you will be able to raise your level of cover without having to undergo any further medical checks. You will have the extra financial security your new circumstances demand.

For effective retirement planning combining a trust with your investment in MOMENTUM could add considerable value. We recommend that you contact your financial adviser for further information on how trusts could meet your planning requirements.

When you reach your chosen retirement age, you can decide whether you would like your accumulated benefits to be taken as a lump sum, as income or a combination of both. Benefits can be paid in any freely available currency.

If you decide to take income, the amount you need will be withdrawn from your retirement fund without tax being deducted at source. The personal tax consequences of withdrawals will depend upon your country of domicile and residence at the time. The balance of your fund will remain invested, growing in a secure tax-efficient environment to provide future income.

You are not restricted on the amount of benefit that you can take as a cash sum from MOMENTUM, giving you flexibility which is not available in many retirement schemes.

You may decide to carry on working past your selected retirement age. MOMENTUM allows your benefits to continue to accumulate until you are ready to take them.

Your circumstances may change and there may be times when you need to have access to your accumulated retirement fund before your selected retirement age, yet continue to contribute for the future. MOMENTUM allows you to make cash withdrawals for whatever reason, although you will only be able to access the fund you have built up from regular contributions after an initial period.

If you choose to completely encash your MOMENTUM plan and receive the value of your retirement fund earlier than planned, an encashment charge may be levied.

Taxation
The tax treatment of any benefits you take from MOMENTUM will depend on your country of residence or domicile and personal circumstances at the time. For example if you become 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.

You are strongly advised to consult your professional financial adviser to discuss your own taxation position as Scottish Provident International cannot give personal tax advice.

Legislation
The company is supervised by the Isle of Man Insurance and Pensions Authority. As a Scottish Provident International policyholder, you will receive the world-wide protection of the Isle of Man Life Assurance (Compensation of Policyholders) Regulations 1991. 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.

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 which applies to you. 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.

You should discuss with your professional financial adviser your own individual position. To apply for MOMENTUM, simply consult your financial adviser. Your adviser will return it to Scottish Provident International. MOMENTUM is available exclusively through independent financial advisers and Scottish Provident International regrets that it is unable to give individual advice.

The information contained in this Brochure is based on the Company's understanding of Isle of Man legislation as at July 200 1. While every care has been taken, the Company cannot accept responsibility for its interpretation or any subsequent changes.

* 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).