Features and benefits

Eligibility

• UK residents with a maximum age of 74
• Minimum age of 16
• Start taking income from age 55, although in some circumstances, such as ill health, your client may be able to start earlier
• Only one payment can be made into the plan
• This plan can only accept a single transfer payment from a registered pension scheme
• Unable to accept transfers in respect of Guaranteed Minimum Pension (GMP)
• Unable to accept transfers in respect of Section 9(2B) rights

Income choices

Annuity

• The value of the plan can be used to provide a taxable income
• Up to 25% of the plan value can be taken as tax-free cash in return for a smaller income

Income drawdown (by transferring to an income drawdown plan)

• Ability to take nil income up to 100% of GAD
• Ability to continue investing in unit-linked funds until age 75
• Income can normally be taken from age 55
• Income can be taken in stages over a period of time
• The value of the plan must be used to provide an annuity or transfer to another pension arrangement by age 75

Features

• Ability to accept a transfer from a registered pension scheme
• Start taking income from age 55, although in some circumstances, such as ill health, your client may be able to start earlier
• Option of unsecured pension
• Value of the plan will be used to provide a taxable income either from us or another pension provider
• Take up to 25% of the plan value as cash, currently tax-free in return for a smaller income
• Lifestyle switching 5 years before retirement
• The value of the plan must be used to provide an annuity or transfer to another pension arrangement by age 75.

Allocation

• 100% allocation

Bid/offer spread

• Nil

Policy fee

• There is no policy fee. Instead this is taken via the Annual Management Charge (AMC)

Contributions

• Minimum £2,000 protected and non-protected rights allowed

Investments/fund options

• 3 pension investment approaches: Adventurous, Balanced and Cautious
• As well as our pension investment approaches, we offer a wide choice of funds with varying aims and investment risks
• Single-manager and tracker funds managed by Scottish Widows Investment Partnership (SWIP)
• Carefully selected funds managed by external fund managers
• Multi-managed funds run in association SWIP
• Payments are used to buy units in the investment funds your clients choose. The value of the plan is based on the number of units
• Wide range of unit-inked investment funds and a unitised with-profits fund
• Ability to invest in 10 funds at any one time
• If your client does not choose investment fund(s), all payments will be invested in our default investment option, the Consensus Fund
• We may change the selection of funds that we make available and restrictions can apply

Switching

• Ability to switch funds, however there may be a delay in certain circumstances, and potential charges and conditions could apply
• Switching between funds is currently free of charge
• Ability to set up regular switching in advance
• Unless instructed, funds will be switched gradually over 5 years before the retirement date so that ~75% is invested in the Pension Protector Fund and ~25% in the Cash Fund
• Unable to switch into the unitised with-profits fund in the 5 years before the retirement date

Selected retirement date (SRD)

• The ability to retire from age 55 may be a key benefit because the registered pension scheme may have a higher minimum retirement age

Reporting

• An annual statement is sent

Tax

• Income bought from the proceeds of the plan will be taxed in payment
• If a cash sum is taken on retirement it is normally tax-free
• If your client dies before they retire, no inheritance tax will be normally payable on the value of the plan.
• Any dependants' income will be liable to income tax
• Scottish Widows pension investment funds are generally free of UK income and capital gains tax
• Tax deducted from dividends of UK company shares cannot be reclaimed
• Tax charges will normally apply if the Governments annual allowance or lifetime allowance is exceeded
• Any unused annual allowance can be carried forward for three years
• The value of any tax benefits depends on individual circumstances, which may change
• This information is based on the assumption that tax legislation is not changed. Tax rules can change

Risks

• Past performance is not a reliable indicator of future results
• Each investment fund has different risks associated with it
• What your client gets back isn't guaranteed and can be lower than that illustrated
• There may be a delay in transferring or switching between investment funds in certain circumstances
• If your client cancels the plan within 30 days they may get back less than the initial amount invested
• Transferring from another pension plan, your client could lose any guaranteed benefits associated with that plan. Your client may not be able to return to that plan if they change their mind