Retirement Account

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Retirement account has the flexibility of being a Personal Pension and, when you need it, a Personal Pension with a self invested option. It allows you to consolidate your retirement savings in one Account, offering you choice and control. In addition to a range of Scottish Widows Pension Funds, you can choose to invest:

• in external funds accessed via a Funds Supermarket
• any Fixed Term Cash Deposits we make available
• with one or more selected Discretionary Fund Managers
• direct investment on listed stocks, shares and other securities
• in commercial property

When you make a contribution, we’ll automatically add an additional amount in respect of basic rate tax relief, meaning you can benefit from the tax relief being invested immediately. We recover the tax relief from HM Revenue & Customs at a later date. Higher rate tax payers can claim additional tax relief in their self assessment tax return. The tax treatment depends upon your individual circumstances and may be subject to change in the future. Tax rules may also change.

All payments into or out of a Retirement Account will pass through the Control Account(s) which are unique to the Retirement Account. Each policy "part" has its own Control Account, which acts as a clearing and transactional account for all monies paid in and out of the Retirement Account. To help you to keep up to date with your Retirement Account you can view the Control Account(s) online.

Retirement Income allows you to take a flexible, taxable income from the value of your account whilst it remains invested. You’ll have the same choice of investments as those available in Retirement Planning with the exception of Governed Investment Strategies. From age 55, you can choose to move (designate) part or all of the value of your Account from Retirement Planning to Retirement Income.

Each time you designate an amount, you can normally take up to 25% of the value as a tax free cash sum. The remainder must be used to provide your taxable income, although you can choose to take nil income if you wish. The maximum yearly income you can take will be calculated in accordance with Government rules.

If you decide not to take all your retirement benefits at once, you can choose to take your benefits in stages. This is known as ‘phased retirement’. It’s not possible to ‘phase’ the value of any former protected rights derived from contracting out of the State Second Pension (S2P) scheme.

By age 75, you must use the value of your Account to buy an annuity or transfer to another pension provider. Your financial adviser will be able to provide you with more details.

You can pay a minimum of £200 a month (£2,400 annually) or make a one-off payment of at least £10,000 (after any tax relief has been added),

While there’s no upper limit set on how much you can contribute to a Retirement Account, we can’t accept contributions paid by you, or by another individual on your behalf, that don’t qualify for tax relief. Tax relief is available on contributions which don’t exceed 100% of your relevant UK earnings, or £3,600 if higher, in each tax year.

If your total contributions to all your pension arrangements exceeds the Government’s Annual Allowance in any year, you’ll normally be liable for a tax charge on the excess.

Yes, the Retirement Account can allow you to consolidate your existing pension savings into one policy.

You should seek professional financial advice before making any decision to transfer funds from an existing pension plan. Transferring may mean giving up valuable benefits or guarantees.

The Retirement Account offers the following investment options:

• Scottish Widows’ Pension Funds
• Fund Supermarket
• Fixed Term Cash Deposit
• Direct investment on listed stocks, shares and other securities
• Discretionary Fund Management
• Commercial Property

We also offer a facility – unique to the Retirement Account – known as the Control Account.

The Control Account acts as a clearing and transactional account. Positive balances held within the Control Account will receive ‘positive balance adjustments’ which are calculated daily and added each month. The adjustments are currently calculated at a rate equivalent to Bank of England bank base rate.

No. The Retirement Account has no such investment bias. You’re able to invest the value of your account in any of the options we make available.

We’ve aimed to make the charges for our Retirement Account clear and comprehensive. We’ve done this by unbundling them to show you exactly where your money is going and why.

The Retirement Account has three types of charge:

• Service Charge – this is charged by Scottish Widows, and is for the set up and ongoing administration of your Retirement Account.
• Investment Charge – this is the cost of each investment, including purchase and sale costs, management charges and other investment-related charges. Investment charges differ depending on the investments selected.
• Adviser Payment Charge – this is the cost of advice and any other related services you agree with your financial adviser.

The Service Charge is tiered, with lower charge rates applying to higher Account values. If the value of your Account increases from one tier to another, the Service Charge rate will reduce. However, if the value of your Account falls from one tier to a lower tier, the rate will increase.

Your financial adviser will be able to explain more about the charges applying to the Retirement Account.

Once you’ve started your Retirement Account, you can view your account online at any time to get a valuation of your pension savings. We will also send you updates each year of your Retirement Account value, along with an illustration of what you may get at retirement if certain assumptions are met.

We aim to make it easy for you to keep track of your pension savings by providing you with online access. If you haven't already registered, you can register now.

You can choose your retirement age – anytime between the ages of 55 and 75.

You can take benefits by:

• moving (‘designating’) part or all of the value of your Account from Retirement Planning to Retirement Income.
• using the value of your Account to buy one or more annuities, from us or another annuity provider.

You can normally take part of the value of your Account as a tax free cash sum.

By age 75, you must use the value of your Account to buy an annuity or transfer to another pension provider.

For further details of the retirement benefits available, please refer to the Key Features of the Retirement Account.

For further details on annuities please visit our annuities section.

The value of your Account will be used to provide benefits for your dependents and/or beneficiaries. The benefits can include lump sum payments and/or dependant’s income.

Normally no inheritance tax is payable. However, a Lifetime Allowance charge could apply to any lump sum death benefits paid from Retirement Planning which exceed the Lifetime Allowance. Lump sum death benefits from Retirement Income will be paid less a 55% tax charge, while any dependant’s income will be treated as earned income and will be taxed in payment.

For further details of the death benefits, please refer to the Key Features of the Retirement Account.

You can only apply for a Retirement Account through a financial adviser, who will be able to help you decide whether a Retirement Account is suitable for you.

Your Adviser can also help to define your attitude to risk and advise you on the mix of investments that may best suit your retirement goals.

Charges, limits and terms may change from time to time.