About Primetime Retirement

Transcription

1 1

2 About Primetime Retirement An introduction by our CEO and Founder I d like to introduce you to Primetime Retirement. We are a specialist company totally focused on the retirement income market. We provide alternative income solutions to people who prefer to keep control of their pension fund, rather than locking it away in a lifetime annuity. We recognise that many people are uncomfortable taking investment risk with their pension funds, so all our products have guaranteed income and / or maturity lump sums. We also recognise that clients want to keep their options open for the future. I was delighted that the Chancellor introduced sweeping changes in April 2015 that now offer new pension freedoms and this guide explains how our plans take advantage of these freedoms in more detail. My Company will continue to offer innovative solutions that keep pace with legislative changes so that you can continue to have peace of mind and flexibility into the future. Kim Lerche-Thomsen CEO and Founder 2

3 The Primetime Retirement Fixed Term Drawdown Plan Primetime Retirement focus on offering clients more options, and our Fixed Term Drawdown Plan uses the new pension freedoms to give you flexibility in terms of how and when you take the cash from your pension fund. Our plan uses a Self Invested Personal Pension (SIPP) wrapper, administered by Astute Trustee Services Limited, to hold your investment and help you control any income you decide to draw during the term, giving our plan an added element of flexibility compared to other fixed-term income products. The plan runs for a fixed term, with plan terms starting at 3 years going up to a maximum of 6 years. When you invest your pension fund into our plan, you have three fixed-term options to choose from a maximum income option, a maximum maturity option or a mixture of income and maturity. 1. Maximum Income In return for investing your pension fund with us, we will pay you a regular income over a term of 3-6 years, so that by the end of the plan term, your entire pension fund is depleted. 2. Maximum Maturity Alternatively, if you do not want or need to take any income, you can simply leave your plan to accumulate until the end of your chosen term and receive a Maturity Lump Sum instead. This maturity value is known from outset and is not affected by changes in market conditions. 3. Income + Maturity By choosing this option, you can elect to take a regular income during the plan term plus a known maturity lump sum at the end of the term. The more income you take, the lower your maturity amount lump sum will be. Or, you could choose to receive a higher Maturity Lump Sum by taking a lower level of regular income. We offer a default Income + Maturity option that pays a fixed level of income designed to provide a balance between a high income and a high maturity option. You should talk to your Adviser or Financial Intermediary about your individual income needs and how your choice of income could affect your tax position. In order to give you more options and ensure we maintain highly competitive products, we have carefully selected a range of financial services firms to provide the income and maturity benefits we offer through our plan. We have provided some details about these firms in a separate guide, Our Partner Guides and your Adviser or Financial Intermediary can also give you more information. You can select from a Deposit Fund and/or Investment Fund to give you a maturity lump sum and/or income level to meet your individual requirements. Your Adviser or Financial Intermediary can provide you with a personalised quotation based on your exact requirements. 3

4 The new pension freedoms and The Primetime Retirement Fixed Term Drawdown Plan In April 2015, sweeping changes to pension regulations were introduced that give retirees the freedom to choose how and when they receive income from their pension funds. It is important to understand these changes when considering your options. Important changes have been made to the amount you can take from your pension funds, the tax treatment of any payments you take and the tax treatment of any benefits payable on death. In addition, there are now two forms of lump sum that can be taken free of tax. Full details of the options available can be found on a free and impartial government service that has been set up through Pensionwise. Find out more at Three ways in which the Primetime Retirement Fixed Term Drawdown Plan helps you benefit from the new freedoms (1) Income withdrawals from your plan One of the main changes introduced by the new pension regulations is that you are no longer restricted by previous Government income limits and are now free to choose any income you want each year from nil to the maximum level that would exhaust your pension plan at the end of the chosen term. An example of this is given on the next page. You can also choose between two types of cash payment which are free of income tax. These are:- Either a tax-free Pension Commencement Lump Sum (PCLS), normally 25% of your pension fund at the point of first drawing income, with any excess amount being subject to income tax under the Pay As You Earn (PAYE) system. Or if you don t take PCLS, any payment to you includes a 25% tax-free element with the balance taxable as income under the PAYE system. These tax free payments are known as Uncrystallised Funds Pension Lump Sums (UFPLS). (2) Death benefits Primetime Retirement Plans offer a return of the fund less any income paid to the date of death. However, the rules relating to tax rates applicable on death have also changed: If you were to die prior to age 75, any beneficiary can take the entire pension fund as a lump sum or as a tax free income (through the purchase of an annuity or income drawdown), If you were to die after age 75, any beneficiary has three options: take a lump sum, purchase an annuity or purchase income drawdown. Under all options, the beneficiary would pay income tax at their marginal rate. (3) Maturity Amounts Our Fixed Term Drawdown Plan offers a known return at the end of the plan term, but you can also choose to exhaust your pension fund with no maturity lump sum amount at the end of the term, if you prefer. 4

5 The Primetime Retirement Fixed Term Drawdown Plan Financial Services Compensation Scheme (FSCS) is protected by the Financial Services Compensation Scheme (FSCS). The FSCS is the body that can pay you compensation in the event of the failure of any of the associated financial services firms. Pension funds transferred into our Deposit Funds are protected through the FSCS up to 85,000 per deposit taker*. This means that, currently, up to 170,000 of investment into a Primetime Retirement Fixed Term Drawdown Plan could be covered by the FSCS if a pension fund is split between both of our Deposit Fund partners. Additionally, we have an Investment Fund option that could provide an additional 50,000 of FSCS protection*. Although the maximum investment allowed in our Investment Fund is normally 50,000, we will allow larger investments subject to receiving written confirmation that you are happy to invest beyond this protection limit. *It is important to note that any money you already hold with any of our Deposit Fund and Investment Fund partners will affect the level of FSCS protection you may be entitled to. While the protection limits quoted represent our understanding of the current compensation scheme rules and limits, as at January 2017, you should check the FSCS website ( as scheme rules may change from time to time. Income options If you choose to take an income from your plan, our SIPP wrapper gives you added flexibility over how and when you do this. Any income you receive is paid to you net of tax. You can choose to receive this income from the SIPP either monthly, quarterly, half-yearly or annually. You could even choose to turn the income stream on and off, depending on your changing needs in retirement - so unlike a traditional annuity that pays out a regular income regardless of your requirements, with our plan you are in control. Once you have chosen a maximum income level at the start of the plan, you cannot subsequently increase the amount. Income Maturity Maximum Income More Less Income + Maturity Less More Maximum Maturity 5

6 The Primetime Retirement Fixed Term Drawdown Plan Suitability A Primetime Retirement Fixed Term Drawdown Plan may be suitable for you if you can answer yes to any of the following questions:- Do you want a guaranteed income and a known maturity lump sum in the future? Are you worried about exposing your pension fund to fluctuating investment performance? Do you want to keep your options open for the future rather than locking in to a lifetime annuity now? Do you worry that your health may deteriorate in the future which could result in you receiving a higher income later on in retirement? The risks explained Future income - Annuity rates can go up and down depending on market conditions, although we guarantee the amount payable at maturity, we cannot guarantee what income this will provide in the future. Inflation - Inflation will reduce what you can buy in the future. Taxation - Tax treatment depends on individual circumstances and could change in the future. Annual allowance - Your plan will be set up as Flexi-access Drawdown unless you tell us otherwise. Where you have chosen to take an income from your plan, the amount you can contribute to other money purchase pension schemes without incurring a tax charge is reduced from 40,000 to 4,000 in a Pension Input Period. You will also have 91 days from starting drawing income to inform the trustees of any schemes you are contributing to, that you have commenced Flexi-access Drawdown. Capital security In the event of a deposit taker or investment taker failure or insolvency, your investment will not be guaranteed and you must rely on your right of recourse to the Financial Services Compensation Scheme (FSCS). Deposit taking business is currently covered under the FSCS up to a maximum of 85,000 per authorised institution. The equivalent figure for an investment taker is 50,000. These levels are subject to review with the next review due in January Quotation validity For Deposit Funds, the plan benefits shown in your Personal Quotation are guaranteed for 14 days. However, if the rate decreases before this date then the quotation will be held at the original higher rate for a further 14 days from the date of the rate decrease. For these quoted benefits to apply, we must receive all funds from your pension scheme(s) before the end of the validity period. If funds are received after the validity period, the benefits and deposit takers may change. You will receive a final quote for your acceptance prior to investment of funds. For the Investment Fund these guarantees do not apply. Important Information Your investment is held in a SIPP and the assets of the SIPP are owned by Primetime Trustees Limited, a nontrading Trustee company which acts purely as a Trustee of the Primetime SIPP. This ensures that your assets are protected by being held separately from the business activities of either Primetime Retirement Limited or Astute Trustee Services Limited who administer The Primetime SIPP. For further information on FSCS (including the amounts covered and eligibility to claim) refer to the FSCS website You must remain in the plan for the full term and you cannot change the benefits during that time. The plan runs for a fixed term of 3-6 years. 6

7 Next steps Seek free guidance and professional advice The government offers a Free Guidance Guarantee which can be accessed face to face from the Citizens Advice Bureau, online or over the phone from the Pension Advisory Service. More information is available from You may wish to seek professional advice if you haven t already done so. If you haven t got an Adviser, you can find one near you at Get a personal quotation Your Adviser or Financial Intermediary will be able to provide you with a personal quotation that will specify the plan benefits depending on your level of investment. What other information can I obtain on the plan options? A range of additional information is available that explains all of the features, benefits and risks of the different plan options available, including: Key Features Document A Guide to the Financial Services Compensation Scheme (FSCS) Policy conditions Partner Guides Glossary of Terms Annuity: A plan that pays an income for life or for a fixed term. If for a fixed term, a maturity amount may be payable at the end of the term. Drawdown: A pension plan arrangement where income is taken from the fund. There are two types:- (a) An arrangement where the benefits are known in advance and guarantees are provided. The Primetime Retirement Fixed Term Drawdown Plan falls in to this type. (b) An arrangement where the benefits are dependent on the future performance of the fund and hence there is no certainty of outcome. Self-Invested Personal Pension (SIPP): A type of personal pension scheme that allows you to draw income in a tax efficient way. Your Primetime Retirement Fixed Term Drawdown Plan is set up in this way. Financial Services Compensation Scheme (FSCS) This is a compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading, the FSCS may be able to pay compensation to its customers. 7

8 The Primetime SIPP ( The Plan ) is a registered pension scheme, administered by Astute Trustee Services Limited. Registered in England No Astute Trustee Services Limited is authorised and regulated by the Financial Conduct Authority. FCA Number Astute Trustee Services have delegated the day to day running of the scheme to Primetime Retirement Limited (Registered in England No ) and Primetime Trustees Limited is the Scheme Trustee (Registered in England No ). Primetime Retirement Limited is authorised and regulated by the Financial Conduct Authority. FCA Number Registered address: Primetime Retirement Limited, Baines House, 4 Midgery Court, Fulwood, Preston PR2 9ZH. Telephone: info@primetimeretirement.co.uk CPT /17