Group Plan. Your guide to how it works

Transcription

1 Group Plan Your guide to how it works

2 Contents 01 What s your plan for retirement? 02 Why join our Group Plan? 04 What does your future look like? 05 What, where and how 07 It s your money 08 What happens when you retire? 10 What to do next

3 What s your plan for retirement? Do you know what kind of lifestyle you d like when you retire? Most people have an idea. But it s not always clear how much it will cost to meet that lifestyle. And there are lots of factors that will have an impact, like whether you ll still have a mortgage, or children at home, or what age you d like to retire. One of the best ways of saving towards the retirement you want is a company pension. The Standard Life Group Plan is a flexible and tax efficient way to save for your retirement. Group Plan 01

4 Why join our Group Plan? Employer s payments One of the best things about a company pension is your employer pays money into your pension too. The money you and your employer put into your pension together means you could have a better chance of reaching your retirement goals. For more details, please read Information about tax relief, limits and your pension (GEN658), or speak to your financial adviser for more details. i Tax and legislation may change, the information here is based on our understanding as at 6 April Your own circumstances will have an impact on tax. Your employer can give you the exact details of how much they will pay into your pension. Tax free payments You ll get tax relief on any payments that you make, normally at your highest income tax rate. Your employer will take your pension payment from your salary before tax has been calculated. So if you re a a basic rate taxpayer and your payment was 100 the amount you pay income tax on is reduced by 20 - if you re a higher rate taxpayer, it would be Group Plan

5 When you pay into a company pension, your employer will also pay in as well. You ll also get tax relief on any payments that you make. Group Plan 03

6 What does your future look like? Even if it seems a long way off, it s really worth thinking about your life after work and what it might cost. You may not need quite as much to live on when you retire. You might have paid off your mortgage by then, and some of your expenses might be lower. That said, you ll still want to do a lot of the things you enjoy doing right now. And little luxuries like going out for dinner with friends can all add up. Your company pension is one way of helping you get the retirement you want. Could you live on the state pension? The flat rate state pension for a single person is a week. However, the amount you will actually receive will depend on your National Insurance record. Some people could get more, many could get less. As you can see below, this is a really tight budget especially after expenses like your fuel and phone bills, council tax and the cost of running your car. Food shopping Car Council Tax Energy Phone and broadband State pension personalandhouseholdfinances/expenditure/bulletins/familyspendingintheuk/ financialyearending Group Plan

7 What, where and how When you join a company pension, you and your employer agree how much you will each pay. Usually you ll have to make a minimum regular payment, but you can pay more if you want to. If things change for you, normally you can agree to reduce or increase the amount of your payments with your employer. Changing your payments will have an impact on the value of your pension. The sooner the better Retirement might seem like it s a long way off. Joining a Group Plan now means that you ll be taking advantage of both your employer paying money into your pension and the tax breaks you re allowed. It could make a big difference when a long way off comes around. Saving a little now could give you greater freedom later. See how much your pension payments might be when you decide to retire at Group Plan 05

8 06 Group Plan

9 It s your money Where is it invested? Your money is invested in one or more of a wide range of professionally managed funds. Your employer or the trustees can provide more details of the fund(s) they have chosen for you including the charges that apply. Your plan may select a range of investments, including some that are based on stocks and shares, which carry different levels of risk. The value of your fund can go down as well as up and you may get back less that you paid in. Group Plan 07

10 What happens when you retire? There are a range of ways for you to access your pension savings when you reach 55 (age 57 from 2028) - from guaranteed income (annuity) and flexible income (drawdown) options, to combinations of the two. You can also take a lump sum, with normally no tax to pay on the first 25% of your pension pot. When the time comes for you to consider retirement, we ll write to you and explain your options in more detail, to help you find the right option for you. Your options at retirement will always depend on your personal circumstances. If you want to access some of the more flexible options, you may need to move to a different pension product first. Transferring will not be right for everyone. There are a number of points to consider, as you could be losing money by giving up any valuable benefits or guarantees that your current plan offers. Whether you re thinking about flexible or guaranteed income take time to shop around for the best deal. You could transfer your pension to another provider and you might get a better retirement income. We recommend you seek appropriate guidance or advice before you make any decisions. An adviser may charge a fee for this. You can also get free impartial guidance over the phone or face-to-face with Pensionwise. Go to or call The Money Advice Service (MAS) guide is also available on the Pensionwise site. Flexible income Flexible income, or drawdown, gives you the freedom to choose your own level of income and the flexibility to suit your personal needs. To access this you may need to move to a different pension product which offers this functionality. Different charges may apply. As with all investments, your capital is subject to risk, and the value can go down as well as up. 08 Group Plan

11 Guaranteed income Guaranteed income, or an annuity, is a guaranteed income for life. It s easy to set up and won t need any further attention from then on. You have to pay income tax on it, just as you would your salary. You should be aware that the decision to purchase a guaranteed income product should be carefully considered, as it normally can t be changed in the future. Take cash from your pension Withdraw lump sums from your pension whenever you like. The first 25% is normally tax-free. If you take it all out as cash, you need to think about the tax you ll pay. What happens to your pension if you die before you retire? If you have another source of income or want to support others after you re gone then leaving your pension invested could be the right choice for you. You can ask us to pass on your remaining pot to anyone you choose, inheritance tax-free. If you die before age 75, this will normally be tax-free If you die after age 75, this will normally be taxed as income Group Plan 09

12 What to do next Read these first You need to read the Key Features in this pack so you can decide if the Group Plan is right for you. Any questions? You can contact your employer who will have details about your plan. We recommend you seek appropriate guidance or advice before you make any decisions. An adviser may charge a fee for this. If you re approaching retirement you can also get free impartial guidance over the phone or face-to-face with Pensionwise. Go to or call How do I join? Decided to go ahead? Spoken to your financial adviser and read everything through? The next step is to speak to your employer. They ll be able to tell you how to join. What happens then? Once your application has been accepted we ll send you a number of important documents. Please read them over and keep them for future reference. We ll send: Your plan documents and confirmation of all the information supplied A yearly statement updating you on the value of your pension You can also keep up-to-date on the progress of your pension using the online services. To register please visit 10 Group Plan

13 Notes Group Plan 11

14 12 Group Plan Notes

15

16 Find out more We re open Monday to Friday, 9am to 5pm. Calls may be monitored and/or recorded to protect both you and us and to help with our training. Call charges will vary. retirementplanner Standard Life Assurance Limited is owned by the Phoenix Group and uses the Standard Life brand under licence from the Standard Life Aberdeen Group. You can find more information about Standard Life Aberdeen plc s strategic partnership with Phoenix at Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. GRP11A Standard Life Aberdeen, reproduced under licence. All rights reserved.