Retirement

Yes, the Retirement Account can allow your clients to consolidate their existing pension savings into one policy. Protected and Non-Protected Rights can be held in the same Retirement Account. The Retirement Account also combines Retirement Planning and Retirement Income in one policy as two separate parts so everything is all in one place, making the management of pension provision much easier.   Another attractive reason for consolidating your clients’ existing pension plans into the Retirement Account is the Service Charge, as we reduce the rate of Service Charge as the fund size increases.

A Retirement Account can be opened by clients aged under 74 and resident in the UK. If your client resides elsewhere, they may be able to take out a Retirement Account depending on their tax status and country of residence.

We believe that the Retirement Account should be targeted at clients with pension funds of at least £50,000 or those customers who expect to have a fund of that amount in the relatively short term.  

This figure is indicative and should not be treated as a threshold entry criterion.   Please refer to Who is it for? section for more details.

Your clients can only apply for a Retirement Account through you, their Financial Adviser.  As this is an “advised product”, we expect that you will be actively involved in deciding whether a Retirement Account is suitable for your clients.  Also, due to the range of asset classes that the Retirement Account offers, we assume that you will have a high level of involvement in defining your clients’ attitude to risk and advising them on their investment choice.  

No. Your clients can invest in whatever investment option(s) they wish to choose. There is no investment bias toward in-house funds.  The Service Charge and Adviser Payment Charge are also based on the total value of a client’s Retirement Account regardless of the investments chosen. So, investment choice does not influence adviser payments.   

We have invested heavily in a new administration platform as well as dedicated servicing support.

The web based technology should get the business on the books quicker than the more traditional methods. Our administration platform also allows quick and easy access to up-to-date valuations and other detailed policy information.  Unlike some other SIPP providers, we update fund valuations on a daily basis and do not charge for this service.   

The trading platform offers a streamlined end-to-end process for buying, selling and switching between funds and asset classes.

In addition to our web services, we have a team of dedicated specialists dealing with enquiries and administration throughout the lifetime of a client’s policy.  

We have endeavoured to secure minimal delays in supermarket trading by making money available in your clients' Control Account(s) as soon as possible. If a client sells from a fund supermarket fund, the money will be available in the Control Account to trade as soon as the price is confirmed by the fund supermarket. Although the sale doesn't settle for a few more days, Scottish Widows, in effect, pre-fund the sale to allow buy trades to be completed with minimal out of market risk.

By settling trades quickly we can help you and your clients respond faster to market developments, investment opportunities or your clients' changing requirements.

Please refer to Features – Retirement Planning and Features – Retirement Income sections.

The funds held in the Retirement Planning part of the Retirement Account can either be partially or fully moved to the Retirement Income part and taken as an unsecured pension with any tax-free lump sum being paid as part of the process. This process is known as designation.

Your clients can continue to make contributions to the Retirement Planning part whilst holding funds in the Retirement Income part. This is particularly useful for those clients who wish to gradually reduce their working hours.

Protected Rights must be designated in full, they cannot be partially designated.

Any tax-free cash lump sum must be taken at the outset of each designation to the Retirement Income part. The maximum entitlement is normally 25% of the value designated.

This process can be carried out with the adviser completing the online Designation Form and where there is more than one investment type, instructing us of the investments that should form the designation.

The Retirement Account has a flexible charging structure. We offer two adviser payment options for both new business and designations of existing funds. Both options are available with or without fund-based remuneration.

Flexible

Scaled

Different initial remuneration options (flexible or scaled) can normally be chosen for Retirement Income and Retirement Planning.

We pride ourselves on the transparency of our Retirement Account charging structure. It has been built to show all costs (implicit and explicit) that will apply to your clients' policies. Whether it's the cost for your advice, the costs associated with the selected investments or our manufacturing and administration costs, the charges are disclosed in a clear and transparent manner.  By separating the charges it allows your client to assess whether or not they are receiving good value for money in the areas of advice, investments and service.  There are no hidden charges. 

You are able to build a Retirement Account that is as simple or as complex as you and your clients want it to be. For those wanting an active role, there are over 1,200 Fund Supermarket funds and over 100 in-house funds to choose from. There are also risk rated portfolio funds, and the option to utilise the expertise of one or more of our panel of Discretionary Fund Managers. The selected DFM(s) will take responsibility for their investment advice and the performance of your client's portfolio, and can give you and your clients the peace of mind that comes from knowing that the portfolio is being managed by investment professionals.  Your Scottish Widows Account Manager can put you in touch with our DFM partners.  

The Retirement Account was built to support both existing and evolving business models. Below are some of the issues that you may be facing and how the Retirement Account can help.  

Issues faced by intermediaries	How the Retirement Account can help
A-Day created new opportunities but unlocking these opportunities requires more complex advice and that advice will be required more frequently.	The Retirement Account allows you to shape the way in which the cost of advice is recovered from the policy.
Some IFAs do not regard investment advice as core to their proposition and wish to delegate to another party.	Discretionary Fund Management is also available for those who wish to outsource the more complex advice surrounding investment management.
Fee-based advice is becoming more widespread, especially following the RDR proposals; however, an intermediary must also consider the cash flow of the business in the short to medium term.	The adviser payment options offered within the Retirement Account allow you to combine up front payments and fund based renewal commissions, tailored to the needs of your business. A client-agreed one-off adviser payment is also available for additional services and/or advice.
A-Day introduced greater investment freedom. Some intermediaries will adopt a business model which provides clients with investment advice. For others, the costs, complexity and risks of providing investment advice will be off-putting.	Scottish Widows Pension Funds, as well as the range of Fund Supermarket funds offered within the Retirement Account, aim to complement the provision of active advice. The panel of Discretionary Fund Managers will facilitate the outsourcing of investment management for those who want to.
SIPP products offer customers access to additional investment options. However, there can be an understandable nervousness around advising customers to move out of simpler, more transparently charged products, into complex SIPPs.	The Retirement Account offers a range of investment options from conventional insured funds to more sophisticated self-invest options. It has no hidden charges and our unbundled approach to charging with separate charges for service, investments and advice aims to make it clear and simple to demonstrate to clients.
The challenges imposed by the FSA on pension switching.	We understand that switching into personal pensions and SIPPs from existing pension plans is a complex area and clients will rely heavily upon their advisers.  So we have created a six step guide to help you when advising clients on pension switching. The Retirement Account’s fully disclosed charging structure also shows clients exactly what they would be paying if they transferred their pension funds to the Retirement Account.

On death, normally no Inheritance Tax is payable on the value of your clients' Retirement Account. However, any lump sum death benefit paid from the RP part(s) of the RA in excess of the Government's Lifetime Allowance may be subject to a tax charge. There is normally no charge if the excess is used to provide a pension for your client's dependants.

Any lump sum paid from the RI part(s) will be subject to a 35% tax charge.

Please note that dependants' pension income is treated as earned income and will be taxed in payment.

Tax treatment depends on your clients' personal circumstances which may be subject to change in the future. Tax rules can change.

If you can't find the information you are looking for on this site, please speak to your Scottish Widows Account Manager.

Any fund based payments generated by investments in the Fund Supermarket will be rebated back to your clients' Retirement Account. We will also rebate part of the administration charges deducted in respect of the investments in the Fund Supermarket.

Online - Yes, under the following circumstances:

• Movements between asset classes must be directed via the relevant Control Account and as a result, requires a two stage process. Firstly, a sale of the existing asset holding and then the purchase of the new asset(s).
• Trading between both Scottish Widows Pension funds and Fund Supermarket funds online is possible, using the above two stage process.
• The sale of Discretionary Fund Management and Commercial Property assets will always be completed offline, as wet signatures are required. The available balance in the Control Account(s) can then be used to purchase other assets. If the proceeds are used to purchase units or shares in Scottish Widows Pension funds or Fund Supermarket funds, the purchase can be completed online. If Commercial Property or DFM investments are being purchased then the transaction must remain offline.

Written requests - Yes. As above, Scottish Widows would complete these requests as a two-stage process however the overall request could be sent to us as one request.