Our regulator, the Financial Conduct Authority (FCA), requires that unless a plan is guaranteed* to pay the target amount, plan update letters are colour-coded red, amber or green to indicate whether plans are likely to meet their target amount. These alerts are shown in red ink at the beginning of the letter sent with the plan update. These illustrations are based on our current charges and other assumptions affecting plan returns, which could change in the future. If annual investment returns are less than the ones illustrated, there is a risk that your endowment plan may pay out less than the potential return shown in the plan update.
- A 'green letter' means that your plan is currently on track to meet its target amount at maturity at the intermediate rate(s) of assumed long-term growth.
- An 'amber alert' means that your plan is at significant risk of not meeting its target amount at maturity at the intermediate rate(s) of assumed long-term growth but is on track at the higher rate(s).
- A 'red alert' means there is a high risk that your plan will not reach its target amount at maturity at any of the rate(s) of long-term growth used in the illustration.
It is important that you check each plan update or re-projection letter, even if the plan has so far been on track. This is especially important if your plan is close to maturity. You will need to continue checking the projected value until the end of your plan term.