This customer information notice is a summary and so does not set out all of the detailed aspects of the Mortgage Endowment Promise.

Contents

 

Introduction

In September 2000, The Standard Life Assurance Company issued the Mortgage Endowment Promise ("the MEP") to the majority of our UK and Irish mortgage endowment planholders.

The MEP provided that, subject to the fulfilment of a number of conditions, including in relation to the growth in Standard Life's capital, an eligible plan would meet its targeted value at maturity as long as the "6% per annum test" was met. Under the MEP, the 6% per annum test would be met if the earnings on the assets backing the plan were on average at least 6% per annum (after tax) from 28 September 2000 to the maturity of the plan.

On 10 July 2006 The Standard Life Assurance Company demutualised. As part of the demutualisation Scheme, which the Scottish Court approved on 9 June 2006, the MEP was revised to ensure that the obligations in respect of the MEP could operate with certainty and in a manner that was fair to all planholders.

There was no change to the operation of the MEP when the Standard Life Assurance Limited business transferred to Phoenix Life Limited on 27 October 2023.

Entitlement to any payment under the MEP is exclusively determined on, and subject to, the terms and conditions set out in the Scheme.

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MEP Non Top-Up Planholders

Shortly after the MEP was introduced in 2000, we reviewed each house purchase plan to which the MEP applied.

If the result of this review showed that the plan was at that time projected not to pay out its target amount, even if the future earnings from then until maturity of the plan on the assets in which the plan was invested were on average 6% per annum (after tax), the plan was eligible, subject to the conditions of the MEP, to have a top-up payment added at maturity to reduce the impact of the maturity value falling short of the target amount.

If the result of the review showed that the plan was at that time projected to pay out its target amount or more, assuming that the future earnings from then until maturity of the plan on the assets in which the plan was invested were on average 6% per annum (after tax), the plan was not projected to need a top-up payment at maturity. The holder of such a plan is categorised as a "MEP Non Top-Up Planholder".

If your annual review statement has directed you to this website page you are a "MEP Non Top-Up Planholder". What this means is that, if the 6% per annum test is not met, you will not receive any payment under the MEP. However, if the 6% per annum test is met, and at the same time the maturity value of your plan is less than its target amount, it is possible that, subject to the conditions of the MEP, you could receive a payment under the MEP.

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What does this mean for MEP Non Top-Up planholders?

If your plan meets the 6% per annum test and the maturity value is less than the plan's target amount, you might receive a payment under the MEP.

However, we think it is unlikely that you will be entitled to any payment under the MEP. This is because, in general, it seems unlikely that MEP policies will meet the 6% per annum test, at least on a short to medium term view of potential investment returns. Moreover, even if the 6% per annum test is satisfied, the possibility of a payment under the MEP being made would then only arise if your plan's maturity value is less than its target amount. Therefore, when you are making any decisions about your plan or financial affairs, please do not assume you will receive any payment under the MEP.

Whether or not you are entitled to any payment under the MEP, and, if so, the amount of that payment can only be determined at the time your plan matures. Please also note that no payment will be made under the MEP, in respect of your plan, if the eligibility conditions set out below have not been met. If you would like further technical detail on how we would calculate any payment to which you may become entitled under the MEP if your plan meets the 6% per annum test, then please call us on 0800 634 7475.

Calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary.

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Eligibility Conditions

In order to qualify for a payment under the MEP, you must also satisfy certain eligibility criteria. These criteria must be met from the first review of your plan, following the introduction of the MEP, up to your plan maturity date:

  1. All payments due from you under your plan must have been made in full; and

  2. Your plan must have remained fully invested in with-profits or the managed fund, or a mix of these.

We will not make any payment under the MEP if, at any time during that period:

  1. You reduce the payment amount (except if you change the plan from two or more lives to single life);

  2. You change the term of your plan;

  3. You partially or fully cash in your plan or stop payments permanently or use the Early Maturity Option (if this applies to your plan); or

  4. The plan is absolutely assigned to a third party (except in the case of divorce/dissolution of civil partnership) including, for example, sale as a Traded Endowment Plan or by way of gift.

If you are contemplating altering or assigning your plan, and you are not sure whether this will cause your plan to cease to be eligible for a payment under the MEP, call our customer services department on 0800 634 7471 between 9am and 5pm, or speak to your independent adviser. If for any reason you are in doubt about the implications of such loss of eligibility, we strongly recommend that you consult your solicitor or independent adviser.

Calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary.

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