Share Incentive Plan

A simple, tax-efficient way to buy Phoenix Group shares

Welcome to SIP

The Share Incentive Plan is a simple employee share plan that enables you to buy Phoenix Group Holdings plc shares (“shares”) every month using contributions from your gross pay.

WELCOME TO SIPYour opportunity to buy Phoenix Group shares each month

Affordable - invest between £10 and £150 each month

Matching Shares - we will give you one Matching Share for every Partnership Share you buy; (on the first £50 you contribute each month)

Convenient - contributions are taken directly from your gross pay

Flexible - start, stop or change your contribution whenever you like

Save Tax and National Insurance - if you keep your shares in the Plan for the required length of time

Partnership Shares are shares bought each month with your contribution

Matching Shares are the ones Phoenix Group gives to you. You will receive one Matching Share for every Partnership Share you buy (on the first £50 you contribute each month)

What do you need to know about SIP?

How SIP works

HOW SIP WORKSIt’s as easy as one, two, three...

GrowOwn2 3Invest1

Choose how much you want to contribute each month

Invest between £10 and £150 each month, or 10% of your gross monthly salary, whichever is lower

You can stop, restart or change the amount you contribute each month – so you’re in control

You won’t have to pay Income Tax or National Insurance contributions on the money invested into the Plan as contributions are taken from your gross pay

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HOW SIP WORKSIt’s as easy as one, two, three...

Your contributions are used to buy Phoenix Group Holdings plc shares each month

Shares are purchased by the Trustee each month at the market price for Phoenix Group Holdings plc shares

Your shares are then held in the SIP Trust. You can access them via your online account

There is no commission for you to pay when shares are purchased

Only whole shares can be purchased; any money left over each month will be rolled over to the next month’s purchase

How SIP works

GrowOwn2 3Invest1

HOW SIP WORKSIt’s as easy as one, two, three...

You will receive one Matching Share for every Partnership Share you buy (on the first £50 you invest each month)

Matching Shares will be awarded to you at the same time as your Partnership Shares

Matching Shares cannot be sold or withdrawn within three years of purchase

You could also receive Dividend Shares

Dividends are a share of company profits that are paid to our shareholders.

Any dividends paid to you will be re-invested as additional shares, otherwise known as Dividend Shares.

How SIP works

How much could I save?

HOW MUCH COULD I SAVE WITH SIP?You won’t have to pay Income Tax or National Insurance (NI) contributions on the money you contribute – so investing in SIP could cost you less than you imagine.

‘I am a basic rate tax payer’You could get £200 worth of shares each month for £102

‘I am a higher rate tax payer’You could get £200 worth of shares each month for £87

Your monthly contribution Value of shares purchased including Matching Shares

What it costs you after Tax and NI savings*

Your monthly contribution Value of shares purchased including Matching Shares

What it costs you after Tax and NI savings**

£50 £100 £34 £50 £100 £29

£100 £150 £68 £100 £150 £58

£150 £200 £102 £150 £200 £87

* Assuming marginal rates of 20% Income Tax and 12% NI** Assuming marginal rates of 40% Income Tax and 2% NI

How many shares?

HOW MANY SHARES WILL MY CONTRIBUTIONS BUY?The number of shares bought will vary from month to month, as the share price changes. However, to give you an idea of how many shares you’ll receive, take a look at these tables.

Assuming a share price of £5…

Contribution amount Partnership Shares bought Matching Shares received

£25 5 5

£50 10 10

£100 20 10

£150 30 10

Assuming a share price of £7.50…

Contribution amount Partnership Shares bought Matching Shares received

£25 3 3

£50 6 6

£100 13 6

£150 20 6

Assuming a share price of £10…

Contribution amount Partnership Shares bought Matching Shares received

£25 2 2

£50 5 5

£100 10 5

£150 15 5

Please remember that if there’s a difference between your contribution amount and the price of your shares, the leftover amount will be rolled over and added to the following month’s contribution.

What should I consider?

WHAT SHOULD I CONSIDER?

Share priceShare prices can fall as well as rise in value, so you could get back less than you invest. You can find more information about our shares in the Investor Relations section of our website. Remember past performance isn’t a guide to future returns.

Tax and National InsuranceJoining a SIP may reduce the amount of Tax and National Insurance you pay. If this takes your earnings below the Lower Earnings Limit, this may affect your entitlement to social security benefits, statutory sick pay, and statutory maternity pay or contributory social security benefits paid to your spouse. For more information on this, visit HMRC’s website or your local tax office.

Please note that tax legislation can change from time to time. If you’re unsure about how the legislation applies to you, or if you’re uncertain about whether joining a SIP is right for you, you should seek independent advice.

Shares held for less than 3 years

Partnership Shares(Shares bought with your own contribution)

Can I sell? Yes. You can sell them at any time, but you will forfeit any Matching Shares you were awarded with the Partnership Shares you are selling.

TaxYou will have to pay income tax and NI on the market value of the shares on the date they are removed from the Plan.

Matching Shares(Shares awarded by Phoenix Group)

Can I sell?No.

TaxYou are unable to sell Matching Shares.

Dividend Shares(Shares you receive when dividends are re-invested)

Can I sell?No.

TaxYou are unable to sell Dividend Shares.

Capital gains tax (CGT)You won’t have to pay any CGT when you hold and sell your shares within the SIP Trust (i.e. if you don’t transfer them to a share certificate).

How can I sell my shares?If you decide to join, our SIP administrator Computershare will create an online account for you, which will allow you to sell shares quickly and easily subject to a dealing fee (please refer to the FAQ section for further information).

The treatment of your shares depends on your reasons for leaving. See What happens if I leave the Phoenix Group of companies? for more details.

Holding Periods and Tax

HOLDING PERIODS AND TAXIt’s simple to sell your shares, but it’s important to understand the holding periods that apply

HOLDING PERIODS AND TAXIt’s simple to sell your shares, but it’s important to understand the holding periods that apply

Holding Periods and Tax

Shares held for 3 to 5 years

Partnership Shares(Shares bought with your own contribution)

Can I sell?Yes. You can now sell them and keep the associated Matching Shares.

TaxYou have to pay income tax and NI on the lower of the purchase price of the shares or their market value on sale.Any income tax and NICs due will be deducted from your sale proceeds.

Matching Shares(Shares awarded by Phoenix Group)

Can I sell?Yes.

TaxYou have to pay income tax and NI on the lower of the market value at the date you acquire the shares, or their market value on sale.Any income tax and NICs due will be deducted from your sale proceeds.

Dividend Shares(Shares you receive when dividends are re-invested)

Can I sell?Yes.

TaxShares can be sold free of Income Tax and National Insurance.

Capital gains tax (CGT)You won’t have to pay any CGT when you hold and sell your shares within the SIP (i.e. if you don’t transfer them to another trading account or into share certificates).

How can I sell my shares?If you decide to join, our SIP administrator Computershare will create an online account for you, which will allow you to sell shares quickly and easily subject to a dealing fee (please refer to the FAQ section for further information).

The treatment of your shares depends on your reasons for leaving. See What happens if I leave the Phoenix Group of companies? for more details.

HOLDING PERIODS AND TAXIt’s simple to sell your shares, but it’s important to understand the holding periods that apply

Holding Periods and Tax

Shares held for over 5 years

Partnership Shares(Shares bought with your own contribution)

Can I sell?Yes. You can now sell them and keep the associated Matching Shares.

TaxShares can be sold free of Income Tax and National Insurance.

Matching Shares(Shares awarded by Phoenix Group)

Can I sell?Yes.

TaxShares can be sold free of Income Tax and National Insurance.

Dividend Shares(Shares you receive when dividends are re-invested)

Can I sell?Yes.

TaxShares can be sold free of Income Tax and National Insurance.

Capital gains tax (CGT)You won’t have to pay any CGT when you hold and sell your shares within the SIP (i.e. if you don’t transfer them to another trading account or into share certificates).

How can I sell my shares?If you decide to join, our SIP administrator Computershare will create an online account for you, which will allow you to sell shares quickly and easily subject to a dealing fee (please refer to the FAQ section for further information).

The treatment of your shares depends on your reasons for leaving. See What happens if I leave the Phoenix Group of companies? for more details.

How do I join?

Joining a SIP couldn’t be simpler...HOW DO I JOIN?

1

2

4

Visit: www.computershare.com/phoenixshareplans

Enter your User ID (included on your invitation)

Click ‘Apply’ and follow the simple instructions

You will receive an email confirming that your application has

been accepted.

* You’ll need your Shareholder Reference Number (which is shown on your invitation), and your PIN to log in. New staff will receive a PIN in a separate email, and will then be prompted to set some security questions and create a new PIN.

Online

3 Enter your PIN*

FAQs

THE BASICSWhat is a SIP?A SIP (Share Incentive Plan) is a UK tax-favoured plan designed to be operated in accordance with the legislative requirements set out in the SIP Code.

How does the Matching Share offer work?You can contribute between £10 and £150 each month, or 10% of your gross monthly salary, whichever is lower. For every share that you buy (or ‘Partnership Share’), Phoenix Group will give you a share (or ‘Matching Share’) up to a limit of £50 per month.

Please remember that the Matching Shares have to be in your account for three years before they become available to sell. If you sell your Partnership Shares before that time, you will forfeit any associated Matching Shares.

How are the shares purchased?The SIP uses your gross salary to buy the shares, meaning you pay no Income Tax or NI. For example by investing £50 a month into the SIP:

• If you are a basic rate tax payer (paying 20% income tax and 12% NI), you would save £10 in income tax per month and £6 in NI per month. This means that while you initially buy £50 worth of shares, the cost to you would only be £34 – a saving of £16!

• If you are a higher rate tax payer (paying 40% income tax, 2% NI), you would save £20 in income tax per month and £1 in NI per month. This means that while you initially buy £50 worth of shares, the cost to you would only be £29 – a saving of £21!

Please note that the Income Tax and NI savings will be dependent upon keeping the shares for the necessary period of time (see “Holding periods and Tax”). The amount you save will depend upon your personal tax circumstances. Please be aware that the savings in the examples shown will depend also on share price movement.

ELIGIBILITYAm I eligible to join the Plan?You are eligible to participate in the SIP provided you are a UK resident tax payer and you are an employee of Phoenix Group Holdings plc or a Participating Company.

Can I participate while I am on temporary leave (e.g. parental leave, sick leave, and long service leave, sabbatical)?You can participate if you are on paid leave. However, the SIP is set up via Payroll and the funds must be taken directly from your gross salary. Therefore if your salary reduces, even if you have elected for a specified amount (up to £150), you may find your contribution needs to reduce as you are only able to contribute up to 10% of your pay.

Can I participate while I am on unpaid leave?No. Contributions to the SIP can only be made from your gross salary. Therefore, you can only participate if you are receiving pay.

FREQUENTLY ASKED QUESTIONS

I work part-time. Will I be able to participate in the SIP?Yes, and your contribution opportunity will be the same as full-time employees.

I am on a fixed term contract with the Phoenix Group. Can I still take part in the SIP?Yes. You are able to take part if you are on a fixed term contract if you are not under notice to leave the Company.

JOINING THE PLANWhen can I join the SIP?You can join at any time. However, to qualify for the next month’s award, you must apply by 27th of the month. Payroll deductions are then made the following month.

For example, if you apply for SIP on 10 May, the first deduction will be taken from June’s pay.

How do I join?You will be sent an invitation unless you have previously received one, a PIN (Personal Identification Number) email. If you have forgotten

your PIN, you can reset it by clicking ‘Forgotten PIN?’ and following the instructions. You will need to use these details to apply online through www.computershare.com/Phoenixshareplans

The SIP Helpline is open 8.30am - 5.30pm (UK time) Monday to Friday excluding UK public holidays. Contact the SIP Helpline on 0370 707 1828. Alternatively you can email phoenixsip@computershare.co.uk

CONTRIBUTIONSYou can lose money if the share price falls below the price at which you bought your shares. But remember, you are not paying any Income Tax or NI on the money you are using to purchase the shares, so you effectively buy them at a lower cost. Plus you get one Matching Share for every Partnership Share you buy (up to £50 per month). If you leave within five years you may be liable for income tax and NI, and if you leave within three years, you forfeit the Matching Shares. You must

decide whether the SIP is a suitable investment for you. If you are unsure, you should seek independent advice from a qualified financial adviser. Phoenix Group Holdings plc and Computershare are not able to advise you.

Can I change the amount I invest each month?Yes. You can change your monthly contribution, via the Computershare website. You will need to do this by the 27th of the month in order to stop change contribution for the following month.

To change your monthly contribution amount:

• Log in to your account• Click Contributions in the left hand menu• Select Share Incentive Plan from the

Holding drop down box• Click Change• Follow the instructions

FREQUENTLY ASKED QUESTIONS

FAQs

What if I want to remove all my shares and stop my contributions?If you decide to stop contributions and remove your shares from the SIP you can do this via the Computershare website. Withdrawing your shares from SIP may make you liable for Tax and National Insurance.

If you withdraw Partnership Shares, there may also be an impact on any Matching Shares you were awarded, which may be forfeited (see Holding periods and tax for more information). You should also be aware that share prices go up and down and therefore the proceeds from the sale of your shares may be lower than the amount you originally invested. Any residual funds will be returned to your payroll for processing.

How much will the shares cost?The shares will be purchased on your behalf at market value. There is no commission for you to pay when the shares are purchased in the market.

How many shares can I buy?This will depend on the market value of the shares at the time of purchase and how much you decide to invest which is between £10 and £150 per month (or 10% of your gross monthly salary, whichever is lower).

Will I be paid a dividend on my shares?You will be entitled to dividends due to you as an owner of shares in Phoenix Group Holdings plc. Any dividend income will be re-invested into additional shares, otherwise known as Dividend Shares. Currently, dividends are paid to shareholders twice yearly in October and May. As long as a dividend is declared, shares will be purchased from the dividends received during these months.

Will I have to pay tax on the shares?You will normally be liable to income tax and NI if you withdraw shares within five years of the purchase date. If you withdraw your Partnership

Shares within three years of the date that they were purchased, you will lose the associated Matching Shares. You will not have to pay income tax or NI if you leave the shares in the SIP for five years.

Are there any restrictions on selling shares?If the Company is in a “Closed Period” you may not be able to sell your shares immediately. “Closed Periods” are communicated through news updates on the Company intranet.

The Share Trading Policy is available on the Company Intranet. If you require more information please contact Steven Watts, Company Secretariat Office at Phoenix on 0203 5679166.

Will I have to pay any dealing fees?There is a dealing fee of 0.30% of the gross sale proceeds, subject to a minimum fee of £20.00.

FREQUENTLY ASKED QUESTIONS

FAQs

LEAVINGWhat happens if I leave the Phoenix Group of companies?The treatment of your shares depends on your reasons for leaving.

Reason for leaving What will happen?

• Redundancy• Ill-health, injury

or disability• Retirement• Death

You can keep all of your Partnership, Dividend and Matching Shares – even those held for less than 3 years. These will be allocated to you shortly after your employment ends

If you leave for any of the reasons given above, you are able to either sell your shares or transfer them into your own name without forfeiting any shares or incurring any income tax and NI contributions liability.

• Resignation• Dismissal

You will lose any Matching Shares that you have held for less than three years from allocation day

IMPORTANT INFORMATIONWho is the Trustee?Computershare Trustees Limited is the appointed Trustee for Phoenix Group Holdings plc Share Incentive Plan.

Do you need more information?This brochure provides only a general guide to the Phoenix Group Holdings plc Share Incentive Plan (SIP). It does not override the Plan Rules which are legally binding.

A copy of these Rules, the SIP Partnership Share Agreement and Terms and Conditions and are available on the Computershare website. If you have any questions please contact the SIP Helpline on: 0370 707 1828.

Or alternatively email Computershare at: phoenixsip@computershare.co.uk

No financial or investment advice is provided in this brochure. If you are in any doubt as to whether or not you should join SIP you should take advice from your own independent professional adviser.

Data ProtectionYour personal information will be treated as confidential and will only be disclosed outside of Computershare in the following circumstances: where the law permits or it is in the public interest; to investigate or prevent fraud; to Computershare’s agents in connection with running accounts and services for you; at your request or with your consent; to Phoenix Group so they may update their own records about you. In accordance with the Data Protection Act you are entitled, on payment of a fee, to a copy of the information that Computershare hold about you. You should let Computershare know if you think any information they hold about you is inaccurate, so they can correct it.

FREQUENTLY ASKED QUESTIONS

FAQs

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Our award-winning share plan partner. SIP is administered by Computershare Plan Managers. Computershare is an award-winning, global provider of share plans with over 35 years’ experience in the industry.

With over 1,000 share plan specialists in 20 locations across the globe, Computershare offer unrivalled expertise.

You can find out more about them at www.computershare.com