Smoothed Return Announcement

We're delighted to be able to share some of the profits from our With-Profits Fund with people who bought our new Income Choice Annuity in its first year

All clients will see an increase in their income at their policy anniversary after 6 April 2010.

How do Smoothed Returns affect your income?

On your policy anniversary we compare the Required Smoothed Return needed to maintain your chosen level of income with the actual Smoothed Return we announce for your annuity. This will then affect your income for the following year. If the actual Smoothed Return is:

• The same as your Required Smoothed Return, your income for the following year stays the same
• Higher than your Required Smoothed Return, your income for the following year goes up
• Lower than your Required Smoothed Return, your income for the following year goes down

We can change the actual Smoothed Return at any time by announcing a Smoothed Return mid-year. Remember though if there is a change it won't affect you until on or after your next policy anniversary, dependant on the payment frequency you have chosen.

How does this affect your Income Choice Annuity?

Past performance is not a reliable indicator of future performance. Changes in the income payable from an Income Choice Annuity will depend on the relationship between the Smoothed Return announced and the Required Smoothed Return. The income from an Income Choice Annuity can fall as well as rise at a yearly review.