Withdrawals

You can make a withdrawal from your PIP at any time. Here we explain your options.

Who is your PIP held with?

Halifax

Halifax

Halifax PIP

You can withdraw funds from your PIP by either requesting a regular payment or a one off lump sum.

If you choose to withdraw more than your 5% tax deferred allowance per year there may be tax to pay. Depending on which option you choose when making a withdrawal there can be an excessive and artificially high tax liability. So it’s important to understand your options before making a withdrawal.

We recommend that you take a few minutes to read through our PIP Guide to Making Withdrawals, to help you better understand the key points involved.

Things to think about before making a withdrawal

The investment you made into your PIP should be viewed over the medium to long term, at least a five to ten year period, to help meet your financial objectives. Leaving your money invested over the longer term means you’re less likely to be impacted by short-term ups and downs in the stock market.

Before withdrawing funds from your PIP it’s important to consider:

  • You’ll lose any future investment growth on anything you take out of your plan.
  • You may have income tax to pay when making a withdrawal.
  • Your plan may receive Yearly Management Charge (YMC) reductions which could be lost if you take money from your plan – you can find more information about YMC reductions on pages 5–7 of the Key Features.
  • You may be eligible for a loyalty bonus in the future, which could be reduced or lost if you take money out of your plan.
  • If you don’t need all the money in your PIP now, you could take a one-off withdrawal of the amount you need and leave the rest invested, or you could set up regular withdrawals from your plan.
  • If you hold money in a savings account, that might be a more appropriate source of funds than cashing in some or all of your PIP.

You can take a regular withdrawal of either a specified amount or a percentage of your investment. This will be paid directly into your bank account.

  • You can make regular withdrawals on a monthly, half-yearly or yearly basis (there’s a £50 monthly, £250 half yearly and £500 yearly minimum).
  • You’ll need to leave at least £100 in your plan (£1,000 for plans invested in the Managed Income Fund) – otherwise we’ll close it, cash in the remaining units and pay you the proceeds.

You can withdraw money by requesting a one-off lump sum.

  • You have to take out £100 or more.
  • You’ll need to leave at least £100 in your plan (£1,000 for plans invested in the Managed Income Fund) – otherwise we’ll close it, cash in the remaining units and pay you the proceeds.

Your PIP is made up of 100 separate parts, or segments. Withdrawals can be taken by cashing in these segments in different ways – we’ve listed your options below.

Depending on the option you choose to make a withdrawal there can be an excessive and artificially high tax liability. So it’s important to understand your options before making a withdrawal.

There are five ways to make a withdrawal from your PIP:

  • Option 1 – Withdraw a specific amount of money using a combination of options 2 & 3
  • Option 2 – Take a lump sum or regular withdrawals by partly cashing in an equal amount from across all segments
  • Option 3 – Cash in whole segments
  • Option 4 – Cash in a specific number of whole segments and then partly cash in an equal amount from across all the remaining segments
  • Option 5 – Withdraw all of your investment and close your plan

Before making any decisions, please refer to our PIP Guide to Making Withdrawals which provides information on each of these options, along with some worked examples.

To make a withdrawal please call us on 0345 030 6244. Our lines are open from 8am and 6pm Monday to Friday and 9am to 1pm on Saturday.

Alternatively please download a Withdrawal form and return it to us at:

Scottish Widows
PO Box 30000
15 Dalkeith Road
Edinburgh EH16 9AT

Once we have all the information needed, your request will be processed within five working days. Payments are made through BACS (Banks Automated Clearing System) and usually take 3-4 working days to be credited to your account.

When you make a withdrawal from your PIP a chargeable event gain can occur. Chargeable event gains normally occur when you make a profit on your investment; for example if you invest £10,000 and this grows to £15,000 then you’ve made a gain of £5,000. Chargeable event gains are taxable under income tax rules, so you might have tax to pay when you make a withdrawal.

Key points to consider

Scottish Widows pay tax on the growth of underlying investments, which means that there is no personal liability to income tax at the UK basic rate, or to capital gains tax.

However, you may have income tax to pay if:

  • You normally pay tax above the UK basic rate when the gain arises.
  • The chargeable event gain results in you becoming a higher rate or additional rate tax payer.
  • If you're unsure about the tax implications of making a withdrawal from your PIP we suggest that you speak to a financial adviser.

For more information please refer to the Key Features and Guide to Making Withdrawals

Have you used your tax-deferred allowance?

You have a 5% tax deferred withdrawal allowance. This 5% withdrawal allowance is cumulative and any unused allowance can be carried forward to future years - subject to the total cumulative 5% allowance amount not exceeding 100% of the amount you have paid into your PIP. For example, with an initial investment of £30,000 you could withdraw £1,500 each plan year over 20 years.

Large withdrawals from your PIP can result in an excessive and artificially high tax liability, so we recommend that you speak to your financial adviser or tax office before taking any withdrawals in excess of the 5% allowable allowance.

The value of any tax benefits of your plan depend on your personal circumstances. Your circumstances and tax rules may change in the future.

Contact us by phone or in writing

To find out the value of your plan, top up your investments, move funds, or make a withdrawal, call us on 0345 030 6244.

Our lines are open from 8am to 6pm Monday to Friday and 9am to 1pm on Saturday.

You can also contact us in writing at:

Scottish Widows
PO Box 30000
15 Dalkeith Road
Edinburgh EH16 9AT

To allow us to help you quickly, please include:

  • your account, plan or policy number
  • your full name
  • your address
  • how you would like us to reply and your contact details (e.g. telephone number or email address)
  • your signature is your consent to follow your instruction.

Once we have received your letter, we aim to respond to your request within five working days. We may need to get in touch with you for additional information before completing your request. To avoid any delays, please include a daytime contact number or email address.

Scottish Widows

Scottish Widows

Scottish Widows PIP

You can withdraw funds from your PIP by either requesting a regular payment or a one off lump sum.

If you choose to withdraw more than your 5% tax deferred allowance per year there may be tax to pay, Depending on which option you choose when making a withdrawal there could be an excessive and artificially high tax liability. So it’s important to understand your options before making a withdrawal.

We recommend that you take a few minutes to read through our PIP Guide to Making Withdrawals, to help you better understand the key points involved.

Things to think about

The investment you made into your PIP should be viewed over the medium to long term, at least a five to ten year period, to help meet your financial objectives. Leaving your money invested over the longer term means you’re less likely to be impacted by short-term ups and downs in the stock market.

Before withdrawing funds from your PIP it’s important to consider:

  • You’ll lose any future investment growth on anything you take out of your plan.
  • You may have income tax to pay when making a withdrawal.
  • Your plan may receive Yearly Management Charge (YMC) reductions which could be lost if you take money from your plan – you can find more information about YMC reductions on pages 4–5 of the Key Features.
  • You may be eligible for a loyalty bonus in the future, which could be reduced or lost if you take money out of your plan. if you don’t need all the money in your PIP now, you could take a one-off withdrawal of the amount you need and leave the rest invested, or you could set up regular withdrawals from your plan.
  • If you hold money in a savings account, that might be a more appropriate source of funds than cashing in some or all of your PIP.

To help you better understand the key points involved, we recommend that you take a few minutes to read through our PIP Guide to Making Withdrawals.

You can take a regular withdrawal of either a specified amount or a percentage of your investment. This will be paid directly into your bank account.

  • You can make regular withdrawals on a monthly, half-yearly or yearly basis (there’s a £50 monthly, £250 half yearly and £500 yearly minimum).
  • The maximum regular withdrawal you can take per year is 7.5% of the total amount invested in your plan.
You’ll need to leave at least £500 in your plan – otherwise we’ll close it, cash in the remaining units and pay you the proceeds.

You can withdraw money by requesting a one off lump sum.

  • You need to take out £100 or more.
  • You’ll need to leave at least £500 in your plan after your withdrawal – otherwise we’ll close it, cash in the remaining units and pay you the proceeds.

Your PIP is made up of 100 separate parts, or segments. Withdrawals can be taken by cashing in these segments in different ways – we’ve listed your options below.

Depending on the option you choose to make a withdrawal there can be an excessive and artificially high tax liability. So it’s important to understand your options before making a withdrawal.

There are four ways to make a withdrawal from your PIP:

  • Option 1 – Withdraw a specific amount of money using a combination of options 2 & 3
  • Option 2 – Take a lump sum or regular withdrawals by withdrawing an equal amount from across all segments
  • Option 3 – Cash in whole segments
  • Option 4 – Withdraw all of your investment and close your plan

Before making any decisions, please refer to our PIP Guide to Making Withdrawals which provides information on each of these options, along with some worked examples.

To make a withdrawal please call us on 0800 141 418. Our lines are open from 8am to 6pm Monday to Friday and 9am to 12.30pm on Saturday.

Alternatively please download a Partial Withdrawal form or Full Withdrawal form and return it to us at:

Scottish Widows
PO Box 28116
15 Dalkeith Road
Edinburgh EH16 5BU

Once we have all the information needed, your request will be processed within five working days. Payments are made through BACS (Banks Automated Clearing System) and usually take 3–4 working days to be credited to your account.

When you make a withdrawal from your PIP a chargeable event gain can occur. Chargeable event gains normally occur when you make a profit on your investment; for example if you invest £10,000 and this grows to £15,000 then you’ve made a gain of £5,000. Chargeable event gains are taxable under income tax rules, so you might have tax to pay when you make a withdrawal.

Key points to consider

Scottish Widows pay tax on the growth of underlying investments which means that there is no personal liability to income tax at UK basic rate, or capital gains tax.

However, you may have income tax to pay if:

  • You normally pay tax above the UK basic rate when the gain arises.
  • The chargeable event gain results in you becoming a higher rate or additional rate tax payer.
  • If you are unsure about the tax implications of making a withdrawal from your PIP we suggest that you speak to a financial adviser.

For more information please refer to the Key Features and Guide to Making Withdrawals.

Have you used your tax-deferred allowance?

You have a 5% tax deferred withdrawal allowance. This 5% withdrawal allowance is cumulative and any unused allowance can be carried forward to future years - subject to the total cumulative 5% allowance amount not exceeding 100% of the amount you have paid into your PIP. For example, with an initial investment of £30,000 you could withdraw £1,500 each plan year over 20 years.

Large withdrawals from your PIP can result in an excessive and artificially high tax liability, so we recommend that you speak to your financial adviser or tax office before taking any withdrawals in excess of the 5% allowable allowance.

The value of any tax benefits of your plan depend on your personal circumstances. Your circumstances and tax rules may change in the future.

Contact us by phone or in writing

To find out the value of your plan, top up your investments, move funds, or make a withdrawal, call us on 0800 141 418.

Our lines are open from 8am to 6pm Monday to Friday and from 9am to 12.30pm on Saturday.

You can also contact us in writing at:

Scottish Widows
PO Box 28116
15 Dalkeith Road
Edinburgh EH16 5BU

To allow us to help you quickly, please include:

  • your account, plan or policy number
  • your full name
  • your address
  • how you would like us to reply and your contact details (e.g. telephone number or email address)
  • your signature is your consent to follow your instruction.

Once we have received your letter, we aim to respond within five working days. We may need to get in touch with you for additional information. To avoid any delays, please include a daytime contact number or email address.