Retirement Income

Eligibility

• Minimum age 55 (lower in certain circumstances)
• Maximum age 74
• UK resident

Income choices

• Nil Government Actuaries Department (GAD)
• Between Nil GAD and 100% of GAD. Find out more in Retirement Account – Your Online Guide^NaN
• Maximum GAD
• Annuity by age 75 or transfer to another pension provider

The value of the plan can be used to provide a taxable income either by

• Buying an annuity
• Transferring into an income drawdown plan
• Up to 25% of the plan value can be taken as tax-free cash in return for a smaller income
• 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 by age 75 or transfer to another pension provider.

Features

• It is an appropriate personal pension policy which can have two elements, Retirement Planning and Retirement Income
• It is possible to move assets from Retirement Planning to Retirement Income. This is known as designation
• Basic-rate tax relief is applied immediately to payments into Retirement Planning
• Charges are unbundled, helping make it easier for your clients to understand costs
• Adviser payment options are designed to meet most business models, including the option to take fund-based remuneration on the value of all assets
• Our online services offer you access to illustrations and applications, as well as daily valuations
• Ability to buy, sell and switch most investments online
• Your client can view their Retirement Account online

Allocation

• 100%

Bid/offer spread

• None

Servicing

• Dedicated customer service team with direct telephone(s) and e-mail address(s)

Contributions

Minimum contributions are

• £50,000 from retirement planning or external pension transfer
• £37,500 drawdown – drawdown transfer

Reporting

• Annual statements
• Online valuations in real time
• Full consolidated value of whole plan

Tax

• Retirement Income may be liable to personal income tax
• Tax treatment depends on individual circumstances
• If your client decides to take a cash lump sum when they designate, it’s normally tax free
• Any lump sum paid on death from the Retirement Income part(s) will usually be taxed at 55%. Inheritance tax is not normally payable

Death benefits

• Return of fund less 55% tax charge
• Payable to trustees if individual trust set up
• Purchase dependant’s annuity
• Dependant continues income withdrawals based on age, sex ,gender

Literature

• Guide to Retirement Account – Personal Pension Plan^NaN
• Retirement Account client profile – Personal Pension Plan with self-invested option ^NaN
• Retirement Account guide – Personal Pension Plan with self-invested option^NaN
• Retirement Account Drawdown – Adviser technical guide^NaN

Risks

• The final value available to buy annuities isn’t guaranteed
• It would be lower than illustrated if investment performance is lower, the client takes a higher level of income, the charges and expenses are higher, or tax rules change
• The cost of buying annuities can change significantly over time
• If the cost increases the annuity income your client can buy, with the final value will be lower than illustrated
• When people buy an annuity, those who live longer gain at the expense of those who die early
• If someone delays buying an annuity and lives longer, they’ll not gain to the same extent