Stakeholder Pension Plan features and benefits

Eligibility

Aged under 75
Either resident in the UK or
- A Crown employee, or spouse or registered civil partner of a Crown employee
- Not resident in the UK but have earnings which are chargeable to UK income tax
Minimum £20 payment

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

The value of the plan can be used to provide a taxable income
Up to 25% of the plan can be taken as tax-free cash in return for a smaller income
Ability to take from nil income up to 100% of Government Actuaries Department (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

Minimum payment of £20 applies, whether regular, single or ad hoc (net for individual and gross for employers)
No maximum limit on payments that can be made each year
However, limits do apply to the amount of tax relief available

Wide range of funds to choose from
We offer three lifestyle options: Cautious, Balanced and Opportunity
Single manager and tracker funds managed by Scottish Widows Investment Partnership (SWIP)
Ability to invest in 10 funds at a time
Default option is the Scottish Widows Consensus Fund
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
We may change the selection of funds that we make available and restrictions can apply

Free switching between funds
Set up regular switching in advance to automatically change where any future payments are invested
Lifestyle switching is available but must be chosen at the outset

Basic-rate tax relief applied to regular and single payments
Higher-rate and additional tax payers can claim additional tax relief on their self-assessment tax return
Each year, tax relief is available on payments that don't exceed your client's relevant UK earnings (or £3,600 if higher)
If your client dies before they retire, inheritance tax will not normally be payable
Any payments made that are not eligible for tax relief will be refunded
No tax relief on payments made by an employer or transfer payments
Any income your client buys with the proceeds of the plan will be taxed in payment
If your client takes a cash lump sum when they retire, it's usually tax-free
Any dependants' income will be liable for income tax
Pension investment funds are generally free of UK income or capital gains tax, however, we can't reclaim tax deducted at source from dividends of UK company shares
Tax charges will normally apply if either the Government's annual allowance or lifetime allowance is exceeded
Any unused annual allowance can be carried forward for three years.
This information represents Scottish Widows' interpretation of the law and HM Revenue & Customs' practices at the date of publication
The value of tax benefits on your client's plan depends on their individual circumstances, which may change in the future

The value of the investments in your client's plan can go down as well as up depending on market conditions
The plan invests in a range of funds, which each have different risks associated with them
In certain circumstance there may be a delay if your client asks to transfer the value of their plan or switch between investment funds
If your client cancels their plan within 30 days and the value of their investment has fallen, they will get back less than was invested
Your client may get back less than illustrated if all the payments are not made, investment performance is lower than illustrated, charges are higher than illustrated, tax rules change, or the cost of buying the pension is higher
Past performance is not a reliable indicator of future results.