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					Key features
of Legal & General’s
pension annuities
Helping you make
the right decisions for your future
The Financial Services Authority is the independent financial services regulator. It requires us,
Legal & General, to give you this important information to help you to decide whether our pension
annuity is right for you. You should read this document carefully so that you understand what you are
buying, and then keep it safe for future reference.

Please read this document together with the quotation.




Important information

You should have received a copy of Legal & General’s ‘An Introduction to Conventional With Profits’
booklet which explains the particular features of With Profits investments and describes how we
manage our conventional With Profits investments.

A more detailed description of With Profits is contained in a document called ‘Principles and Practices
of Financial Management’ (PPFM) which is available on request.
Legal & General offers two types of pension annuity:
• a Non Profit annuity, sometimes referred to as a conventional annuity, and
• a With Profits annuity, a type of investment linked annuity.
A lot of the information in this document applies equally to both, but where it doesn’t, it’ll be made clear.




Its aims
The aim of a pension annuity is straight forward.          Depending on which options you choose, it may
• To pay you a pension income for the rest of your         also
  life.                                                    • pay a pension income to your spouse, registered
                                                             civil partner or a financially dependent partner
                                                             after you die.


Your commitment
Your commitment is also clear.
• You firstly need to decide whether you want to           • Buying a pension annuity is a once and for all
  buy your pension annuity from us. If you decide to         decision: once you’ve bought it, you cannot
  do so, we need a lump sum to be paid to us –               change your mind.
  usually from a pension fund built up over the years
  by you and/or your employer(s).



Risks
There are certain risks attached to your decision. It is   • We write With Profits and Non Profit policies in our
important that you understand and consider them              With Profits fund. We provide guarantees for both
carefully before making it.                                  With Profits and Non Profit policies and the assets
• Unlike some other financial products, a pension            in the whole fund are ultimately available to meet
  annuity has no ‘cash in value’. You cannot sell it, or     them. This means that, although you may benefit
  transfer it to someone else.                               from support from the assets backing Non Profit
• The annuity rates available can go up and down             business, we could reduce the amount we pay
  depending on investment conditions at the time.            you if we have to use the assets backing
  You could find you would have done better or               With Profits business to support Non Profit business.
  worse by waiting for a change in investment
  market conditions.                                       The following only applies to our Non Profit annuity
• Once you’ve bought your annuity you can’t                • We may request a report from your doctor after
  change the options you’ve chosen, for example,             your income starts in order to check any medical
  add a new spouse’s income option if you get                and/or lifestyle information you have given us.
  married after your income starts.                         If we find the doctor’s report does not support the
• Depending on the choices you make when your               information you gave us and we have paid you
  income starts, you may find that the effects of           too much income, then it may be reduced and, at
  inflation over time leave you less well off than          worst, you may receive our lowest standard
  you’d hoped, planned or expected.                         annuity rate. We will then recover any
                                                            overpayments from you.
The following only applies to our With Profits annuity
                                                            If the report suggests you would have qualified for
• Your income could go up or down, depending on             a higher income, we will not increase your income
  a number of factors including the performance of          as a result. It is therefore your responsibility to
  the underlying investments.                               ensure that any medical and/or lifestyle
• Past performance is no guarantee of future                information you give us is both accurate and
  performance.                                              complete so that you can obtain the maximum
• You share in the risks of other With Profits pension      level of income.
  annuities, which can reduce your bonuses and
  therefore the amount we pay you. You also share
  in the risks of other With Profits policies, such as
  bonds.



                                                            Key features of Legal & General’s pension annuities      2
    Your questions
    answered
    In this section, we will try to answer any questions        We want you to be confident that you have all the
    you may have, and give you a bit more information           information you need, to ensure that the decision
    about our pension annuities and how they work.              you make is the right one for you. A copy of the
    This is an important, once and for all, decision. It will   terms and conditions is enclosed. If you haven’t
    largely determine your financial circumstances for          received it, please contact us.
    the rest of your life – and possibly of your husband,       Needless to say, if there’s anything you’re still unsure
    wife or partner if they outlive you.                        of, we will be very happy to answer any questions
                                                                you might have. You may also like to talk to other
                                                                companies and/or an independent financial
                                                                adviser if you haven’t already done so.




    The basics
    What is a pension annuity?                                  The income from a With Profits annuity will also be
    A pension annuity is a way of turning the pension           affected by the Anticipated Bonus Rate (ABR) you
    fund you have built up over the course of your              choose and the bonuses we declare (see ‘What is a
    working life into a regular income. Basically, your         With Profits annuity?’).
    pension provider gives us the fund, as a lump sum.          The income from a Non Profit annuity could be
    In return, we commit to pay you a regular income            affected by your postcode and certain medical
    for as long as you live.                                    and/or lifestyle conditions.

    Can I take a cash lump sum?                                 How will I receive my income?
    Yes. The rules governing how much you can take              Your payments are made directly into your bank or
    vary from time to time, but currently the rule is that      building society account.
    you can take up to 25% of your pension fund as a
    cash lump sum. What’s left of your fund will then be        What happens when I die?
    used to buy your annuity.                                   Unless you have made certain choices, which we
                                                                will cover shortly, your income will stop.
    Can I use a one-off payment to buy a pension
                                                                This could mean that the total amount of income
    annuity?
                                                                paid from your annuity may be less than the value
    Yes. If you use a lump sum rather than the proceeds         of the pension fund used to buy it.
    of a pension scheme, we then claim tax relief from
    HM Revenue & Customs (HMRC) at the basic rate,              When can I buy a pension annuity?
    add it to your lump sum, then use the total amount
                                                                You can buy a pension annuity as long as you will
    to pay for your annuity. If you pay higher rate tax,
                                                                be over 50 (55 from 6 April 2010) and under 75 when
    you’ll be entitled to extra tax relief, but you’ll need
                                                                the annuity starts.
    to claim it yourself through your tax office.
                                                                If you buy it before you’d originally planned to, your
    Your employer can also make a one-off payment.
                                                                income might be smaller than you expected, since
                                                                your pension fund will have had less time to grow,
    How much regular income will I receive?
                                                                and the income will be paid to you for longer.
    The income you receive will depend on the size of
    the fund you have accumulated over the years and              Should I be worried about inflation?
    market conditions at the time you buy your annuity.
                                                                  The rate of inflation will vary but for example, if
    It will also depend on your age and sex, and, to at
                                                                  inflation averaged 2.5%, after 10 years the value
    least some degree, on how and when you choose
                                                                  of £100 in terms of today’s prices would be
    to receive it. It will also depend on various choices
                                                                  only £78; and after 25 years, just £54.
    you make when you buy it – see the section ‘Your
    payment options’ for more details.




3   Key features of Legal & General’s pension annuities
With Profits annuity
What is a With Profits annuity?                           What is the guaranteed minimum annuity?
A With Profits annuity will pay you an income for the     Whilst the level of income we pay you from a
rest of your life. The level of income can go up and      With Profits annuity can go down, it will never fall
down. This is because a With Profits annuity allows       below a minimum level (the guaranteed minimum
you to invest in a broad spread of assets. These          annuity). The guaranteed minimum annuity will
include stocks and shares, fixed interest securities (a   depend on the ABR you choose and will be based
fixed interest security is a way of ‘lending’ money to    on a percentage of your starting level of income.
a Government, or to a company, in return for a fixed      The table below shows the percentages:
rate of interest over a fixed period), UK property and
cash.                                                       ABR selected      Guaranteed minimum annuity
                                                                 (%)            as a % of starting income
Returns are credited in the form of bonuses which
we declare each year. The level of bonus is not                   0                         100
guaranteed and will depend on a number of
factors, including investment performance, our                 0.1 - 1.0                     75
mortality experience and expenses.                             1.1 - 2.0                     60
There are two types of bonus:
                                                               2.1 - 3.0                     50
• Temporary Bonus, which is payable for one year
and can be changed or withdrawn at any time,                   3.1 - 4.0                     40
and
                                                               4.1 - 5.0                     30
• Annual Bonus, which, once added, cannot be
withdrawn (other than by the effect of the                We suggest you consider quotations with different
Anticipated Bonus Rate (ABR)).                            ABRs before making a decision.
The ABR allows you to exercise your own judgement
                                                          Can I change a With Profits annuity to a Non Profit
on what future bonus levels are likely to be. You can
                                                          annuity?
select a rate from outset of between 0% and 5% in
increments of 0.1%.                                       Our With Profits annuity can be converted to a Non
                                                          Profit annuity at any time after the first policy
The lower the ABR you choose, the lower your
                                                          anniversary date, but before doing so we may have
starting level of income will be, but there’s a greater
                                                          to ask for medical evidence. We use the medical
likelihood it will increase over time as bonuses are
                                                          evidence to estimate your life expectancy which is
added. On the other hand, the higher the ABR you
                                                          then used in the calculation of the revised annuity.
choose, the higher your starting level of income will
be, but there is a higher chance that your income         There will be a charge for making the change. Your
will fall over time. This is because the level of         revised quotation will take account of this charge.
bonuses will need to be higher to match or exceed         Once you have converted to a Non Profit annuity
the ABR.                                                  you can’t revert back to a With Profits annuity at a
We will send a full statement each year with details      later date.
of the bonuses that will be added to your With
Profits annuity.
Can I change my ABR in the future?
You may be able to vary your ABR provided you are
under the age of 75. Any request to do so must be
received by us in writing four weeks prior to your
‘policy alteration date’ (normally your policy
anniversary). We may ask for medical evidence
before we can provide you with a quotation based
on the revised ABR. We use the medical evidence to
estimate your life expectancy which is then used in
the calculation of the revised annuity.
There will be a charge for making the change. Your
revised quotation will take account of this charge.
Do note that changing your ABR can significantly
affect your future income, and may leave you
worse off than if you had not made the change. We
would recommend taking financial advice before
you request a change.




                                                           Key features of Legal & General’s pension annuities   4
    Non Profit annuity
    What is a Non Profit annuity?                             Can my income go down over time?
    A Non Profit annuity will pay you an income for the       No. The level of income we pay you cannot ever
    rest of your life.                                        actually go down - although inflation can reduce
                                                              how much you can buy with the money you
    A fixed income                                            receive.
    You can choose from outset to be paid a fixed
    income, set at a defined level. With this option, you     Can I change a Non Profit annuity to a With Profits
    know where you stand. But there is the danger that        annuity?
    your pension income won’t buy as much over time           No. The option to convert from a Non Profit annuity
    due to inflation.                                         to a With Profits annuity is not available.

    An income which increases
    You can choose an income which increases year on
    year, either by:
    • a fixed percentage – anything up to and including
      10%, or
    • in line with the Retail Prices Index (RPI).
     RPI is the index of the average change in the
     prices of goods and services in the UK. You can
     choose to have the increase capped at 5%,
     referred to as ‘Limited Price Indexation’.
     RPI increases are not available on our Non Profit
     annuity where enhanced rates have been
     applied.
    The trade off for choosing an income that increases
    over time is that it starts out at a lower level than a
    fixed income.
    Either way, once in payment, that’s it. Unlike some
    other types of annuity, our Non Profit annuity will not
    be affected by what happens for example to the
    stock market or by changes in the housing market.




5   Key features of Legal & General’s pension annuities
Your payment options
How can I adapt my pension income to my needs?            A guaranteed payment period
There are a number of options you’ll need to              Your income is guaranteed to be paid for as long as
consider carefully before you buy your annuity. It’s      you live. However, you can choose to have it paid
important to realise that the options you choose          for a guaranteed period of up to 10 years, to your
cannot be changed or added to after your income           estate or any other person you specify, if you die
has started. Not all of them may be available to you      within that period. Again, if you choose this option
due to restrictions imposed by the pension fund you       your income will start at a lower level.
have. But normally, you can choose from any of the        You could combine an income which has a
following:                                                guaranteed payment period with an income
                                                          payable to your dependant on your death. In this
An income for your dependant                              case, you need to choose whether their income
You can choose for an income to be paid to your           starts when you die (known as ‘with overlap’), or
surviving spouse or registered civil partner if you die   when the guaranteed payment period ends (known
before they do. Or, if you’re not married or in a         as ‘without overlap’).
registered civil partnership, then you can choose for
an income to be paid to a financially dependent           Can I combine other options?
partner.                                                  Yes. Please ask us for a quotation showing the
This income would be paid to them for the rest of         options that you want. Do bear in mind that
their life. The amount they’ll get can be set at any      any option(s) you choose will affect the size of the
level you want up to a maximum of your own                income you receive.
income.                                                   Some types of pension funds must have certain
Choosing this option will reduce your starting level      options by law. If yours is one of them, your
of income.                                                quotation will reflect this.
If you want an income to be paid to your surviving
spouse or registered civil partner, you can choose        How often will I receive my pension income?
for it to be paid to:                                     When you buy your pension annuity, you must
• The person you’re married to or in a registered         specify how frequently your income payments are
  civil partnership with when you buy your annuity.       to be made – monthly, quarterly, half yearly or
  If you later remarry or enter into a registered civil   yearly, in advance (at the start of the payment
  partnership with someone else, they will not            period) or in arrears (at the end of the payment
  be entitled to your income. This is known as            period).
  ‘named’ basis; or                                       If you choose to have your payments made in
• the person you’re married to or in a registered         arrears, you may decide that you would like a final
  civil partnership with when you die, even if            payment to be made to cover the period between
  they’re not the same person you were with when          your last payment and your death. This is called a
  you bought your annuity. This is known as ‘any’         ‘proportionate’ payment.
  basis.                                                  Once again, the choices you make will affect the
The option you choose will affect the amount of           starting level of your income. For instance, an
income you get.                                           income payable yearly in arrears will be greater
                                                          than one payable yearly in advance.
If you want an income to be paid to a financially
dependent partner, then they must be named
before your annuity starts. When you die, they will
need to be able to prove they were financially
dependent on you at the time of your death.
We will not pay an income to any other dependant
other than those described above.




                                                           Key features of Legal & General’s pension annuities   6
    Rules, taxes and charges
    How are any benefits from contracting-out treated?        How much commission is paid to my financial
    If your pension fund includes benefits arising from       adviser?
    contracting-out of the earnings related part of the       We may pay commission to your financial adviser
    State Pension, your income may be subject to              for arranging your plan. Any such commission would
    certain restrictions as to how it can be paid. Any        depend on the size of the pension fund, and be
    such restrictions, if applicable, will be shown on your   paid for out of the charges, with details provided in
    quotation.                                                your quotation.

    Is my income subject to tax?                              Are there maximum limits on how much income I
    Yes. And if you have chosen a surviving dependant’s       can receive?
    income option, any payments to them will also be          There are no restrictions on how much income you
    subject to income tax. We will send a P60 each year       can receive, but payments above a certain level
    confirming the total amount of any tax we have            are subject to a higher rate of tax. If the total value
    deducted.                                                 of your pension savings exceeds your ‘Lifetime
    The amount of tax you pay on your income can              Allowance’, as set by the Government, the excess
    change from time to time with changes in your             will be subject to tax at up to 55%. The level set,
    circumstances, tax rates and other factors. When          however - £1.75 million for tax year 2009/2010,
    these changes happen, the level of income that            increasing to £1.8 million for 2010/2011 - means
    you receive from us will also change in line with the     relatively few people will be affected.
    instructions that we are given by HMRC. The basic
    rate of tax for the tax year 2009/2010 is 20%, but the
    rate you pay may be different.




7   Key features of Legal & General’s pension annuities
Your quotation
How long is my quotation guaranteed for?                    It’s worth shopping around (also known as taking
The annuity rate used in your quotation is                  the Open Market Option), as different providers
guaranteed for a limited period. For this rate to           offer different rates. If you do get quotations from
apply, we must receive all funds from your pension          other providers, do make sure to specify the same
scheme(s) before the date shown in the ‘Important           options, to ensure that you’re comparing like with
information’ section in your quotation. If the funds        like.
are received after this date then the rate available        You should also be careful to check for any
at that time will apply.                                    guaranteed pension benefits you might lose if you
                                                            were to change provider. They may have
What should I do if I want to accept this quotation?        guaranteed annuity rates or charges for switching
Simply complete the application form, and any               providers.
other accompanying documentation, and return it             Make sure you understand the implications fully
to your financial adviser.                                  before you make any decisions.

What if the quotation has expired?
We will send you a final quotation before your
pension annuity is set up. If our rates have changed
since your last quotation, the figures will reflect this.

What should I do if I want to see other quotations?
If you would like us to give you new quotations
based on any other options outlined, we will be
happy to provide them. You can of course also ask
any other life insurance company for a quotation,
either through an independent financial adviser or
some may deal with you directly.




                                                             Key features of Legal & General’s pension annuities   8
    Further
    Information
    About Legal & General                                    Sales-related complaints that we cannot settle can
    The Legal & General Group, established in 1836,          be referred to the:
    is one of the UK’s leading financial services            Financial Ombudsman Service
    companies. Over 6.5 million people rely on us for life   South Quay Plaza
    assurance, pensions, investments and general             183 Marsh Wall
    insurance plans. The Legal & General Group is            London
    responsible for investing £287 billion worldwide (as     E14 9SR
    at 30 June 2009) on behalf of investors,                 Telephone: 0300 123 9123
    policyholders and shareholders.                          Email: complaint.info@financial-ombudsman.org.uk
    Legal & General is a UK based insurer.                   Website: www.financial-ombudsman.org.uk
                                                             Making a complaint to The Pensions Advisory
    Queries or complaints                                    Service or the Financial Ombudsman will not
    If you need any further information,                     prejudice your right to take legal proceedings.
    please contact us at:
    Legal & General Assurance Society Limited                Compensation scheme
    Legal & General Annuities Department                     We are covered by the Financial Services
    PO Box 809                                               Compensation Scheme. You may be entitled to
    Cardiff                                                  compensation from the scheme if we cannot meet
    CF24 0YL                                                 our obligations. This depends on the type of
    Email: annuities@landg.com                               business and the circumstances of the claim.
    If you wish to complain about any aspect of the          Currently, the first £2,000 of a claim is protected in
    service you have received, please ask for a leaflet      full. Above this amount, the Scheme covers
    setting out our internal complaint handling              payment to 90% of the value of a policy. However,
    procedure. Please contact us at:                         from 1 January 2010, this limit is changing to cover
                                                             90% of the whole claim.
    Legal & General Annuities
    PO Box 809                                               You can get more information from the Financial
    Cardiff                                                  Services Compensation Scheme.
    CF24 0YL
                                                             Client categorisation
    Telephone: 0370 050 2616
    Calls to this number will not exceed your fixed line     If you buy this Legal & General product, we will treat
    or mobile phone provider’s national rate and will be     you as a ‘retail client’. There are various categories
    included in any inclusive free minute plan or            of client set out in the financial regulations. Being a
    discount scheme you may have with your                   retail client gives you the greatest level of
    telephone provider. Call charges will vary between       protection under the regulations and ensures you
    telephone providers.                                     get full information about any products you buy.
    We may record and monitor calls.                         If, under the regulations, you are a professional
                                                             client or eligible counterparty, we will still treat you
    Complaints regarding our administration that we
                                                             as a retail client, although this would not necessarily
    cannot settle can initially be referred to:
                                                             mean that you would be eligible to refer any
    The Pensions Advisory Service                            complaints to the Financial Ombudsman Service or
    11 Belgrave Road                                         to make a claim under the Financial Services
    London                                                   Compensation Scheme.
    SW1V 1RB
    Telephone: 0845 601 2923                                 Conflicts of interest
    Email: enquiries@pensionsadvisoryservice.org.uk          During the term of your policy, conflicts of interest
    Website: www.pensionsadvisoryservice.org.uk              may arise between you and us, our employees, our
    and may then be referred to:                             associated companies or our representatives.
    The Pensions Ombudsman                                   A conflict of interest is where our duties to you as a
    11 Belgrave Road                                         customer may conflict with what is best for
    London                                                   ourselves. To ensure we treat customers consistently
    SW1V 1RB                                                 and fairly, we have a policy on how to identify and
                                                             manage these conflicts.
    Telephone: 020 7630 2200
    Email: enquiries@pensions-ombudsman.org.uk               A copy of the full policy is available on request by
    Website: www.pensions-ombudsman.org.uk                   writing to us at the address detailed above in the
                                                             section ‘Queries or complaints’ or from our website
                                                             at www.legalandgeneral.com/legal-security.




9   Key features of Legal & General’s pension annuities
Our Regulator                                          We will then cancel the plan.
We are authorised and regulated by the Financial       If you do not take this opportunity to cancel, your
Services Authority, and appear on their register       plan will continue and your benefits will continue to
under number 117659. You can check this at:            be paid.
www.fsa.gov.uk/register                                If you decide to cancel we will make every effort to
Or by telephone on:                                    return the original payment to the original source.
0300 500 5000                                          They may not be obliged to accept the return of this
You can write to them at:                              payment. If they will not accept the return of the
Financial Services Authority                           payment you can either arrange for your annuity to
25 The North Colonnade,                                be purchased with another provider and we will
Canary Wharf                                           forward the monies to them, or your annuity with us
London                                                 will continue.
E14 5HS                                                If you have received any benefits from the annuity,
                                                       you must return this money to Legal & General
Tax                                                    within 30 days of notifying us.
This information reflects our understanding of the
current law relating to pensions.                      Law and language
                                                       English law governs this contract. We will
Cancellation rights                                    communicate in English throughout its course. If we
If you apply for a Legal & General pension annuity,    need to contact you, we will normally do this by
you have 30 days from the date of your quotation       letter or by telephone.
to change your mind. If you return the completed
application form before the 30 days have passed,       With Profits
the annuity will not commence until at least 14 days   Our regulator, the Financial Services Authority (FSA),
of the 30 days have passed. You will then have the     requires us to publish a document called ‘Principles
unexpired balance of the 30 days cancellation          and Practices of Financial Management’ (PPFM)
period to cancel the contract.                         which is a detailed description of our approach to
                                                       managing with profits investments.
The following applies to a personal pension            In addition to this, the FSA also requires us to
contribution for immediate retirement only:            produce a guide which summarises the main points
When we receive your application and cheque we         of the PPFM. This is called ‘An Introduction to
will, in accordance with the law, send you a notice    Conventional With Profits’ and you can ask us or
of your right to cancel. You then have 30 days in      your adviser for a copy of both of these documents.
which to change your mind.
For all other plans:
If you wish to cancel your application you must
write to us at:
Legal & General Assurance Society Limited
Legal & General Annuities Department
PO BOX 809
Cardiff
CF24 0YL




                                                        Key features of Legal & General’s pension annuities     10
Authorised and regulated by the Financial Services Authority

Legal & General Assurance Society Limited
Registered in England No. 166055
Registered office: One Coleman Street, London EC2R 5AA
This is also our head office in the United Kingdom

A member of the Association of British Insurers
www.legalandgeneral.com

W12326 10/09 Approval number: H106390

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