Current Positive Balance Adjustments

From 1st October 2023, Scottish Widows are currently adding monthly Positive Balance Adjustments at a rate equivalent to 2.3% each year to customers’ Control Accounts that hold a positive balance.

This is based on the expectation that we will earn interest at a rate between 3.5 and 3.75% each year on the accounts in which the Control Account money is held.

Previous Positive Balance Adjustments and charges

The table below shows the yearly equivalent rates of Positive Balance Adjustments applied to customers’ Control Accounts that had a positive balance in previous periods. It also shows the details of the yearly equivalent rates of interest retained (‘Control Account Charge’) by Scottish Widows in those periods.

Date Positive Balance Adjustment Rate Interest Retained by Scottish Widows
19/03/2020–30/09/2023 0% 0%

About the Control Accounts

Your Retirement Account has one or more Control Accounts. They allow money to move within your Retirement Account, for example payments into and out of it, and changes to your investment choices. You can also choose to hold money in a Control Account, for example to pay some types of charges or to take future income payments.

The Control Account(s) are not designed for long term investment. We invest money from Control Accounts in a range of instant access and deposit accounts.

About Positive Balance Adjustments

Where interest is paid to us, each month we’ll add part of it to your Control Account(s) if you had a positive balance in that month. We call this a ‘positive balance adjustment’. The table below shows the yearly equivalent rates of Positive Balance Adjustments we expect to pay based on a range of possible yearly interest rates.

Interest we expect to earn Positive Balance Adjustment

1–2% 0.48%–1.05%
2–3% 1.05%–1.72%
3–4 % 1.72%–2.5%
4–5 % 2.5%–3.38%
5%+ 3.38% +

The maximum amount of interest that Scottish Widows will retain is the equivalent of 2% per year.

Deferred Charges

If there are ever insufficient funds in your Control Account, or within Scottish Widows insured funds (where we can automatically sell units), to cover charges due from your Retirement Account, a Deferred Charge will be created.  Where a Deferred charge applies, each day it cannot be collected from the Control Account, or by selling units from Scottish Widows insured funds, we will increase it by a percentage of the Deferred Charge.

The rate of increase for Deferred Charges is currently 6.25% each year. For more information of Deferred Charges, please refer to your policy terms and conditions.