When your policy was transferred to Scottish Friendly in December 2005 it was placed into a separate sub-fund created just for Rational Shelley policies. 

This sub-fund has been closed to new policyholders for many years, so no new policies are being opened. As other policyholders have made claims or withdrawn their money, the sub-fund has decreased in size. 

It has now reached the point where it is in the interests of all remaining policyholders for the Rational Shelley sub-fund to be closed and for your policy to be moved into the Main Fund.

No, we will automatically transfer your policy to the Main Fund on 1 October 2025.  You do not need to take any action.

The Rational Shelley can pay all future claims and would have some assets left over.   We call this extra the sub-fund’s “surplus assets”. We give a fair share of the surplus assets to each with profits policy when you claim or withdraw.

However, regulations require us to set aside some of these surplus assets to ensure we can pay your claim even if things don’t happen as we expect. As the sub-fund gets smaller, the amount we are required to set-aside becomes more challenging to sustain.

The fund has now reached the point where closing it allows us to continue fairly sharing the surplus assets.  If we don't act now, it could lead to an unfair distribution in the future.

No, the charges you currently pay for your policy will not change as a result of the fund closing. 

In addition, any one-off costs which we incur as a result of closing the sub-fund will be deducted from the surplus assets in the fund.  These costs will not be charged to your policy.

No, the Rational Shelley sub-fund will cease to exist after 1 October 2025 and your policy will be transferred to the Main Fund. 

We will distribute all the surplus assets to the with-profits policies in the sub-fund as part of transferring them to the Main Fund by increasing the value of your policy.  This will be applied by uplifting the final bonus which applies to your policy.

The exact uplift will depend on the actual value of the sub-fund’s assets and liabilities on the date we close the sub-fund.  We will complete the necessary calculations after the sub-fund closes and publish the final rate of uplift on this website.

We will not issue any further letters but we will update this page when the closure has been completed. 

We have sent a letter to every remaining with-profits policyholder in the Rational Shelley sub-fund to make them aware of our plan to close the fund.  If you have more than one policy invested in the Rational Shelley sub-fund there is a chance you could receive more than one letter.

No, your policy details and terms and conditions will remain the same. 

No, your policy number will remain unchanged after the sub-fund closes.

When the sub-fund closes the annual and final bonus rates for your policy will become guaranteed and won’t change in the future.  The guaranteed values will be based on current bonus rates, which reflect the latest view of future investment returns.    

The guaranteed final bonus rate will also be uplifted to allow for the distribution of surplus assets, as explained in question 6.

This is in accordance with the process approved by the Court when your policy transferred to Scottish Friendly in 2005.

If you are still paying premiums we will continue to collect these in the same way that we currently do. You should not notice any change.

No, your policy is already administered by Scottish Friendly.  The same team will continue to administer your policy after the sub-fund closes.

When the Rational Shelley policies were transferred to Scottish Friendly in 2005 it was always expected that the fund would eventually reach this point, and that Scottish Friendly would close it and move your policy to the Main Fund.  

This is explained within the Principles and Practices of Financial Management (PPFM).

The PPFM for Rational Shelley is available here - Principles and Practices of Financial Management (PPFM).