Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

Transcription

1 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan Please read this document along with your personal illustration (if you have one) before you decide to buy this plan. It's important you understand how the Prudential Group Personal Pension Plan works, the benefits and associated risks.

2 Welcome Contents About the Prudential Group Personal Pension Plan for Salary Sacrifice members 3 Its aims 3 Your commitment 3 Risks 3 Other documents you should consider reading 4 Questions & Answers 5 How much can I pay into my Group Personal Pension Plan? 5 Where do you invest my money? 5 Can I switch my money between funds? 5 Can I take money out of my plan? 5 Can I transfer my plan? 6 Can I transfer money from another pension plan into this one? 6 What about tax? 6 What are the charges? 7 What is a Market Value Reduction? 8 Is this plan a stakeholder pension? 8 How will I know how my plan is doing? 8 What if I want to cancel my plan? 8 When can I start taking my benefits? 9 How do I turn the value of my pension fund into benefits? 9 How much will my income be? 9 Can I take any of the money invested in my pension plan as a lump sum? 9 What other benefits can I choose? 10 What happens if I die before I take my benefits? 10 What happens if I move abroad? 10 Illustrations 11 Other information 21 How to contact us 23 We would like everyone to find it easy to deal with us. Please let us know if you need information about our plans and services in a different format. All our literature is available in audio, large print or braille versions. If you would like one of these please contact us using the details on the last page. The Financial Conduct Authority is a financial services regulator. It requires us, Prudential, to give you this important information to help you decide whether our Prudential Group Personal Pension Plan is right for you. You should read this document carefully so that you understand what you are buying, then keep it safe for future reference. 2 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

3 About the Prudential Group Personal Pension Plan Our Group Personal Pension Plan gives you the chance to save for your retirement in a tax-efficient way. Its aims What this plan is designed to do To help you save for your retirement in a tax-efficient way. Your commitment What we ask you to do To allow your employer to reduce your salary to make payments into your pension on your behalf. To make at least one payment into your plan. To allow your fund to potentially grow until you take your benefits. You cannot normally take your benefits until age 55. Risks What you need to be aware of The value of your plan can go down as well as up and may even fall below the amount you invested what you get back is not guaranteed. Levels of risk and potential investment performance differ depending on the funds you choose. Please read your Fund Guide for more information. If money is taken out of the With-Profits Fund at any time other than your chosen pension date or on your death, the amount payable may be reduced to reflect the value of the underlying assets at that time. This is known as a Market Value Reduction (MVR). We explain this in the section ' Market Value Reduction'. Inflation will reduce what you can buy in the future. If you exchange your salary for pension payments, in certain circumstances, this may affect any future state benefits you may be entitled to. This may also affect any salary related benefits, such as death benefits, redundancy, mortgage applications or statutory payments. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 3

4 Other documents you should consider reading This document gives you key information about the Prudential Group Personal Pension Plan. If you want more detail on specific points, please read the following documents. We have highlighted when they are relevant throughout this document. They are all available from your adviser, or direct from us. Our contact details are on the last page. Policy Document Gives you the full terms and conditions of the contract. Fund Guide This explains your investment choices. Your With-Profits Plan a guide to how we manage the Fund This provides information on how our With-Profits Fund works, and our current approach to managing it. 4 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

5 Questions & Answers Is the Group Personal Pension Plan right for me? The Personal Plan for might be right for you if you are looking to save tax-efficiently for your retirement. Is this plan a stakeholder pension? No, stakeholder pensions are generally available and could meet your needs as well as this plan. How much of my salary can I give up? There is no limit to the amount that you can pay into your Group Personal Pension Plan. However there are limits on the tax relief you receive. For more information about tax relief, please read the section "What about tax?". As your employer is reducing your salary in exchange for pension payments, you should tell them of any changes you want to make. Where do you invest my money? You choose which funds you would like to invest your money in, from a fund range that we offer. We use your money to buy units in those funds. The price of each unit depends on the value of the investment in the fund and also whether more money is going into or out of the fund. Different funds offer different types of investment. For example, some only invest in property, some invest directly in the stockmarket, and other invest in a wide range of assets. Each fund has its own level of potential growth and risk. Usually, funds with more potential for growth carry more risk. The performance of the funds isn t guaranteed. The value of your units can go down as well as up. If it goes down, you could have less money in your plan than you paid in. For information about the funds you can choose from, please read the Fund Guide and Your With-Profits plan a guide to how we manage the Fund. Your employer may have chosen a default investment arrangement for your plan. If this is the case your money will be directed into this default arrangement unless you make an alternative investment choice. In April 2015 the Government introduced new quality standards for defined contribution schemes. This is part of the Government s Better Workplace Pensions initiative to give people confidence to save into good pension schemes. If your plan qualifies under these new standards a charge cap will apply to your default arrangement. For more information please speak to your scheme adviser and also read the section "What are the charges?". A default investment arrangement does not represent a recommendation on behalf of Prudential. For more information on our charges please refer to the Fund Guide. There may be exceptional circumstances that delay the buying, switching and selling of units in any fund. We would not expect these delays to be longer than six months for units that invest in property or land, and one month for units that invest in other asset types. However, we cannot guarantee that delays will never be longer. If a delay will apply to you, we'll let you know. Can I change my investments? You can switch your money between funds at any time. We currently don't charge you for this. If this changes in the future we will let you know. We may apply a Market Value Reduction if you switch money out of our With-Profits Fund. For more information about this, please read the section What is a Market Value Reduction?. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 5

6 Can I transfer money out? You may hold pension savings in different categories, such as money purchase and defined benefit pensions. Under new rules you are able to transfer different categories of pension savings separately and to different places, for example, keep a defined benefit pension where it is, but transfer any money purchase pension. You can transfer out your pension to another registered pension scheme or qualifying recognised overseas scheme before age 75 as long you have stopped making payments and haven t previously used any of your pension to buy an annuity or pension from your scheme. If you transfer pension savings within a category, you can still accumulate money within the category once the transfer has taken place. There may be additional circumstances where you can transfer your pension savings. Please speak to your employer/ scheme trustees for more information. To find more information on this subject, you may also speak to a financial adviser or visit The Pension Advisory service website at Can I transfer money from another pension plan into this one? If you have a pension plan with another provider, you can transfer the value of it to this plan. If the pension plan you are transferring money from allows you to take more than 25% of its value as tax-free cash when you take your benefits, you may lose this entitlement when you make your transfer. Transferring funds between pension plans is an important decision, so we recommend that you speak to a financial adviser first. What about tax? Tax Relief As you are giving up part of your salary in exchange for a pension payment from your employer, you will not pay tax or National Insurance contributions on the salary you have exchanged. This means if you normally pay tax you ll qualify for immediate tax relief on your payments, subject to HMRC limits. If you are not paying tax you will not qualify for tax relief, and should consider whether salary sacrifice is right for you. Your employer can give you further information on how much they will pay in to your pension for every 1 reduction in salary. You will normally receive tax relief on any additional payments up to 100% of your earnings. Annual Allowance The Annual Allowance is a limit to the total amount of payments that can be paid to defined contribution pension schemes and the total amount of benefits that you can build up in defined benefit pension schemes each year, for tax relief purposes. Tax is a complicated subject and you may wish to seek advice if you feel this will affect you. For more information please visit or visit the HMRC website at Money Purchase Annual Allowance The Money Purchase Annual Allowance (MPAA) will apply to you if you have flexibly accessed pension benefits on, or after, 6 April Your pension scheme administrator or provider paying these benefits will have informed you if you are subject to the MPAA at the time they paid the flexible benefits. In any year where you exceed the MPAA you may incur a tax charge and you should seek financial advice if you feel this may affect you. Examples of drawing benefits flexibly include taking income from flexi-access drawdown or taking a cash lump sum direct from your pension plan as an Uncrystallised Funds Pension Lump Sum. For more information visit or the HMRC website at 6 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

7 Lifetime Allowance The Lifetime Allowance is a limit on the amount of pension benefit that can be drawn from pension schemes, whether lump sums or retirement income, and can be paid without triggering an extra tax charge. If you think you would like to know more about this, you can find more information by visiting or the HMRC website at Tax rules require careful consideration and you should speak to a financial adviser if you feel this may affect you. Capital Gains Tax You don t pay Capital Gains Tax on your pension funds. Income Tax Any pension income will be taxed as earned income. This information is based on our understanding of current taxation, legislation and HM Revenue & Customs practice. These tax rules could change in the future without notice. The impact of taxation and any tax relief depends on your individual circumstances. For more information about tax, please go to HMRC s website: What are the charges? We make charges for managing your plan and your investments. The amount we charge depends on the funds you invest in. For more information, please read the Fund Guide. The charges per year shown are calculated as a percentage of the value of your investment in the fund. These are the charges we take for administering your plan and investments. For all funds (except the Prudential With-Profits Fund) additional expenses are incurred in the administration of the fund, such as custodian charges, regulatory fees and registrar fees. While we do not currently charge for these additional expenses we reserve the right to do so in future. Our charges may vary in the future and may be higher than they are now. Further details can be found in the Policy Document. For most funds we calculate the charge daily and take it monthly from your plan by cancelling units. We calculate the charge for the With-Profits Fund differently. Please remember that we'll keep taking our charges, even if you stop your regular payments. The charges per year shown are calculated as a percentage of the value of your investment in the fund. These are the charges we take for administering your plan and investments. If your employer is using your plan for qualification purposes under the Better Workplace Pensions initiative, there is currently a charge cap equivalent to 0.75% per year, excluding transaction costs, on the value of money held in the default arrangement. Please read the section Where do you invest my money? for more information. In addition to our Product Charges, there are additional costs which impact the overall performance of the fund. These costs are known as trading or dealing costs and property expenses. More information about these may be found in the Fund Guide. With-Profits Fund charge The With-Profits Fund s management charge depends on the performance of the With-Profits Fund, in particular the investment return and our expenses. If, for example, over time investment returns are higher then we would expect to increase the charge and if investment returns are lower we would expect to reduce the charge. We currently expect this charge to be 0.94% a year, based on the assumption that future investment returns from the With-Profits Fund will be 5% per year. We deduct this charge through the bonus mechanism. With-Profits guarantee charge There is a charge to pay for all the guarantees the With- Profits Fund supports. We guarantee not to apply a Market Value Reduction (MVR) in certain circumstances, e.g. when payments are made because of death or at your chosen pension date. Our current practice (which is not guaranteed) may include additional circumstances when an MVR is not applied. Please read the section What is a Market Value Reduction? for more details. You won t see this charge on your annual statement because we take it by adjusting regular and final bonuses. The total deduction for the guarantee charge over the lifetime of your plan is not currently more than 2% of any payment made from the fund. Our charge may vary in the future and may be higher than it is now. This charge may vary if, for example, the long term mix or type of assets held within the With-Profits Fund is changed. For more information about bonuses and charges, please read Your With-Profits Plan a guide to how we manage the Fund. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 7

8 What is a Market Value Reduction? If you take money out of the With-Profits Fund, we may reduce the value of your fund if the value of the underlying assets is less than the value of your plan including all bonuses. This reduction is known as a Market Value Reduction (MVR). It is designed to protect investors who are not taking their money out and its application means that you get a return based on the earnings of the With-Profits Fund over the period your payments have been invested. We apply the MVR to your plan s value including regular and final bonuses. Please read Your With-Profits Plan a guide to how we manage the Fund for more information on bonuses. An MVR will reduce the amount payable on full or partial withdrawals and if investment returns have been very poor, you may get back less than you have invested in your plan. We guarantee not to apply an MVR at your chosen pension date or on any claims due to death. Our current practice on applying an MVR We may apply a Market Value Reduction to full or partial withdrawals as a result of switches or transfers on all investments that have been running for less than five years. For investments that have been running for longer periods, we would consider applying an MVR when a withdrawal results in the total amount paid out, including any other payments in the previous 12 months, exceeding 25,000. We would only apply an MVR to the withdrawal amount in excess of 25,000 in these circumstances. As plans approach the chosen pension date, the size of any MVR that would apply could be expected to reduce gradually. We do not currently apply an MVR to withdrawals as a result of early or late retirements. We reserve the right to change our current practice on Market Value Reductions at any time, without prior notice, and this would apply to existing plans and any new plans or top-ups. Examples of reasons for a change would include significant changes in the investment marke t or because the number of people moving out of the fund increases substantially. How will I know how my plan is doing? We send you an annual statement, which shows how your plan is doing. You can also get an up-to-date valuation of your plan by logging into our website at We ll give you your login details with your Welcome Pack. What if I want to cancel my plan? You have 30 days from the date you receive your plan documents to cancel your plan. This is called a cooling-off period. To cancel it, please complete and return the Cancellation Notice that we send you with your plan documents, or write to us at: Prudential Customer Services Prudential Lancing BN15 8GB Please include your reference number. Once we receive your cancellation instruction, we'll normally give you all your money back. However, if you start your plan with a one-off payment, we will value your units on the date we receive your cancellation instruction. If the value of your units has fallen, you will get back less than you paid in. If you do not exercise your right to cancel within the 30 day statutory period, the contract will become binding. We will not return any money to you except in the form of a benefit payable in accordance with the rules. 8 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

9 When can I start taking my benefits? The Government currently allows people to start taking their benefit from the age of 55, even if you are still working. You may be able to start taking your benefits early if you re in ill health. The minimum age from which you can access your personal or occupational pension is expected to increase from 55 to 57 in 2028 and remain at 10 years below the State Pension age. State Pension age will increase from age 66 to age 67 for males and females between 6 April 2026 and 5 April These ages may change in future as result of changes in life expectancy and other factors. What choices will I have when I take my benefits? There are four main options which may be used in combination: Uncrystallised Funds Pension Lump Sum take a single or series of cash lump sums from your pension savings. Flexi-access drawdown a new form of drawdown which will allow you to take an unlimited amount of income or lump sums from your designated defined pension fund. This will replace flexible and capped drawdown, although existing capped drawdown plans will continue. A pension annuity an investment that guarantees to pay a secure income for the rest of your life, regardless of how long you live. Pension directly from a pension scheme occupational pensions schemes are not changing. You will still be able to draw a pension from any occupational pension scheme you are a member of. Please contact us as you approach retirement and we will let you know which of these options we may be able to offer you. You may have to transfer to another pension arrangement to take advantage of them all. Whatever you decide to do with your pension pot you don t have to stay with us. You should shop around and depending on the choices you make, you may find something more appropriate elsewhere, with alternative features, investment options or charges. Can I take any of the money invested in my pension plan as a lump sum? From age 55, you will be able to draw all or part of your pension fund as a cash lump sum 25% of each payment being tax free with the remaining 75% being added to your income for the year and taxed accordingly. This may affect the rate of tax you pay when added to any other income for that tax year. Tax rules require careful consideration and you should speak to a financial adviser on this subject. What might I get back? The size of your fund when you take your benefits will depend on how much you have paid in, for how long, in which funds and how those funds have performed. What other benefits can I choose? If your employer is making regular payments you can take out life cover which will increase the amount your plan pays out if you die before you start taking a pension. There are no limits on the amount of life cover that you can have. However, the amount you pay towards life cover and the lump sum paid out on death are subject to the Annual Allowance and Lifetime Allowance rules. When you apply for life cover, you ll have to answer some questions about your health, and we may also contact your doctor for a report. If we ask you to have a medical examination, we ll pay for it. The cost of any life cover you choose will be deducted from the payments made to your plan by your employer. This cost will normally increase each year as you get older. This may have the effect of reducing the payments made towards your retirement benefits. You should regularly review payments into your plan. If your employer's regular payments into the plan stop or are suspended, your life cover will end. If regular payments are reduced, your life cover may also have to be reduced. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 9

10 Where can I get guidance about what to do with my pension? In addition to the support from your adviser, two free and impartial services, set up by the Government, are available to give you more information about pensions. General guidance on all aspects of pensions is available from The Money Advice Service Telephone For people over 50, Pension Wise is also available. This Government service offers guidance to people with personal pensions on all the options available for their pension savings. You can have a free consultation online, over the phone and face to face. Find out more at Telephone What happens if I die before I take my benefits? If you die before you start taking your benefits, we will pay the value of your pension fund, plus any additional life cover bought. Benefits payable on death are not subject to Income Tax and are not normally subject to Inheritance Tax if you die before age 75. If you are age 75 or older when you die then income tax will be paid at the rate of the person who inherits the pension. If the value of all death benefits paid as a lump sum from this and any other scheme are more than the Lifetime Allowance, there will normally be a special tax charge. For further details please read section on Lifetime Allowance. The rules require us, as the Scheme Administrator, to decide who will receive the lump sum death benefits. We have discretion to choose, rather than you because if you control the benefit it may be liable to inheritance tax. As we have the choice of such payment the payment will usually be free of inheritance tax. We will take your circumstances and any stated wishes into account before we decide who receives the lump sum. You can let us know your wishes by completing a Nomination of beneficiaries form. For more information about inheritance tax rules, please go to HMRC s website: What happens if I move abroad? Please note Prudential is not able to accept new monies from customers living overseas. If you move abroad and are no longer a resident of the UK this will impact your ability to top up this product. 10 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

11 Illustrations The purpose of this illustration is to show you what you might get back at age 65 from the amount paid into your pension plan making certain assumptions. These illustrations assume investment into a unit-linked fund of a Prudential Group Personal Pension Plan, with a 1% a year charge on the value of the fund. The purpose of this illustration is to show what you might get back on your plan. The figures in the tables in this document are only examples and are not guaranteed they are not minimum or maximum amounts. These figures have been adjusted to allow for inflation. Inflation will reduce the buying power of what you could get back from your pension in the future. The figures are based on an assumed inflation rate of 2.5% per year. Actual inflation could be more or less than this and could reduce what you can buy in future with all your savings and investments. This projection shows an example of the pension you might get at age 65 in today s prices. This means the amounts shown give you an idea of what your pension income could be worth taking into account the effects of inflation. The actual buying power of your pension could be higher or lower than the amount shown. Your fund could be more or less than this and you may get back less than the amount paid in. Your pension will depend on how your investment grows and on interest rates at the time when you take your retirement benefits. A personalised illustration is available on request. The projections shown on the following pages are calculated using a middle growth rate, which we believe realistically reflects the investment potential of some of our products and funds. We are also required by our regulator to provide projections using assumed growth rates 3% either side of this middle rate. For some of our funds, the yearly growth rates would be limited, as required by our regulator, to 2% (lower rate) 5% (middle rate) and 8% (higher rate), before the effects of inflation. Some of the funds within our range may however be expected to return less than the middle growth rate used in these illustrations. We have also used standard pension rates to show how funds may be converted into pension income. Please note that charges may vary by provider. Our charges may vary in the future and could be higher than they are now. Further details can be found in the Policy Document. The pension illustrations on the following pages assume: Your pension is paid monthly from the date you retire Payment of your pension will be guaranteed for a minimum of five years even if you die after your chosen pension date and before the end of five years Your pension will increase each year in line with the Retail Prices Index (RPI) Payments remain level throughout the pension plan. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 11

12 Illustrations for a person using the amounts shown: 1. Aged 20 with a date of birth of 01/05/1998, making monthly salary sacrifice payments of 50 over 45 years, and retiring at age 65 Please note these illustrations do not apply to With-Profits. * The assumed lower, middle and high growth rates once the pension starts are negative. Essentially this means that the annuity payments will increase at less than the rate of inflation so the income level would decrease in real terms from year to year. This would reduce what you could buy with your income. However as the illustrated annuity payments are linked to RPI, the income payments provided will not suffer any reduction in real terms. Assumptions Assumed annual investment growth until the pension starts including the effects of inflation* 0.5% 2.5% 5.5% Assumed annual investment growth once the pension starts** 3.0% 2.0% 1.0% Benefits Your final fund value could be 11,100 24,000 57,100 Which could give you an annual pension of ,730 A tax-free cash sum of and A reduced annual pension of 2,790 6,020 14, , Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

13 The effect of charges The information on the previous page relates to and should be read in conjunction with the illustration shown on this page. During the early years your transfer value may be less than you paid in. The fourth column shows how much your plan would be reduced by, at the end of the years shown, after all deductions have been made. The last two columns assume that investments will grow at 2.5% per year (after allowing for the effects of annual inflation of 2.5%). 1. A person aged 20 with a date of birth of 01/05/1998, making monthly salary sacrifice payments of 50 over 45 years, and retiring at age 65 At the end of year Total paid to date Total actual deductions to date Effect of deductions to date What your transfer value might be , , , , , , , , , , , , ,460 1,150 1,350 11, ,181 1,780 2,180 13, ,701 2,540 3,260 16, ,046 3,440 4,620 18, ,233 4,460 6,280 21, ,283 5,620 8,300 24,000 A personalised illustration is available on request. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 13

14 Illustrations for a person using the amounts shown: 2. Aged 30 with a date of birth of 01/05/1988, making monthly salary sacrifice payments of 100 over 35 years, and retiring at age 65 * The assumed lower, middle and high growth rates once the pension starts are negative. Essentially this means that the annuity payments will increase at less than the rate of inflation so the income level would decrease in real terms from year to year. This would reduce what you could buy with your income. However as the illustrated annuity payments are linked to RPI, the income payments provided will not suffer any reduction in real terms. Assumptions Assumed annual investment growth until the pension starts including the effects of inflation* 0.5% 2.5% 5.5% Assumed annual investment growth once the pension starts** 3.0% 2.0% 1.0% Benefits Your final fund value could be 21,100 37,600 71,200 Which could give you an annual pension of 473 1,000 2,220 A tax-free cash sum of and A reduced annual pension of 5,270 9,410 17, , Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

15 The effect of charges The information on the previous page relates to and should be read in conjunction with the illustration shown on this page. During the early years your transfer value may be less than you paid in. The fourth column shows how much your plan would be reduced by, at the end of the years shown, after all deductions have been made. The last two columns assume that investments will grow at 2.5% per year (after allowing for the effects of annual inflation of 2.5%). 2. A person aged 30 with a date of birth of 01/05/1988, making monthly salary sacrifice payments of 100 over 35 years, and retiring at age 65 At the end of year Total paid to date Total actual deductions to date Effect of deductions to date What your transfer value might be 1 1, , , , , , , , , , , , ,027 1,310 1,470 16, ,920 2,310 2,710 22, ,361 3,570 4,370 27, ,403 5,090 6,530 32, ,091 6,880 9,240 37,600 A personalised illustration is available on request. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 15

16 Illustrations for a person using the amounts shown: 3. Aged 40 with a date of birth of 01/05/1978, making monthly salary sacrifice payments of 250 over 25 years, and retiring at age 65 * The assumed lower, middle and high growth rates once the pension starts are negative. Essentially this means that the annuity payments will increase at less than the rate of inflation so the income level would decrease in real terms from year to year. This would reduce what you could buy with your income. However as the illustrated annuity payments are linked to RPI, the income payments provided will not suffer any reduction in real terms. Assumptions Assumed annual investment growth until the pension starts including the effects of inflation* 0.5% 2.5% 5.5% Assumed annual investment growth once the pension starts** 3.0% 2.0% 1.0% Benefits Your final fund value could be 45,800 68, ,000 Which could give you an annual pension of 1,060 1,880 3,380 A tax-free cash sum of and A reduced annual pension of 11,400 17,000 26, ,410 2, Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

17 The effect of charges The information on the previous page relates to and should be read in conjunction with the illustration shown on this page. During the early years your transfer value may be less than you paid in. The fourth column shows how much your plan would be reduced by, at the end of the years shown, after all deductions have been made. The last two columns assume that investments will grow at 2.5% per year (after allowing for the effects of annual inflation of 2.5%). 3. A person aged 40 with a date of birth of 01/05/1978, making monthly salary sacrifice payments of 250 over 25 years, and retiring at age 65 At the end of year Total paid to date Total actual deductions to date Effect of deductions to date What your transfer value might be 1 2, , , , , , , , , , ,556 1,490 1,600 28, ,568 3,290 3,690 42, ,301 5,780 6,770 55, ,904 8,930 10,900 68,300 A personalised illustration is available on request. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 17

18 Illustrations for a person using the amounts shown: 4. Aged 50 with a date of birth of 01/05/1968, making monthly salary sacrifice payments of 300 over 15 years, and retiring at age 65 * The assumed lower, middle and high growth rates once the pension starts are negative. Essentially this means that the annuity payments will increase at less than the rate of inflation so the income level would decrease in real terms from year to year. This would reduce what you could buy with your income. However as the illustrated annuity payments are linked to RPI, the income payments provided will not suffer any reduction in real terms. Assumptions Assumed annual investment growth until the pension starts including the effects of inflation* 0.5% 2.5% 5.5% Assumed annual investment growth once the pension starts** 3.0% 2.0% 1.0% Benefits Your final fund value could be 40,100 50,600 64,300 Which could give you an annual pension of 974 1,440 2,140 A tax-free cash sum of and A reduced annual pension of 10,000 12,600 16, ,080 1, Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

19 The effect of charges The information on the previous page relates to and should be read in conjunction with the illustration shown on this page. During the early years your transfer value may be less than you paid in. The fourth column shows how much your plan would be reduced by, at the end of the years shown, after all deductions have been made. The last two columns assume that investments will grow at 2.5% per year (after allowing for the effects of annual inflation of 2.5%) 4. A person aged 50 with a date of birth of 01/05/1968, making monthly salary sacrifice payments of 300 over 15 years, and retiring at age 65 At the end of year Total paid to date Total actual deductions to date Effect of deductions to date What your transfer value might be 1 3, , , , , , , , , , ,867 1,780 1,920 34, ,081 3,950 4,430 50,600 A personalised illustration is available on request. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 19

20 What are the deductions for? The deductions include expenses, charges, profits and other adjustments. The figures shown also demonstrates the effects of inflation. The deductions will have the effect of reducing your investment growth. This is called the Reduction in Yield and can be a useful means of comparing charges of different pension products. The last line in each of the four tables above detailing the effect of charges, shows that over the full term to your retirement date, the effect of the total deductions could amount to: 1. Aged 20 with a date of birth of 01/05/1998, making monthly payments of 50 (including tax relief) over 45 years, and retiring at age 65: 8,300 in today s money 2. Aged 30 with a date of birth of 01/05/1988, making monthly payments of 100 (including tax relief) over 35 years, and retiring at age 65: 9,240 in today s money 3. Aged 40 with a date of birth of 01/05/1978, making monthly payments of 250 (including tax relief) over 25 years, and retiring at age 65: 10,900 in today s money 4. Aged 50 with a date of birth of 01/05/1968, making monthly payments of 300 (including tax relief) over 15 years, and retiring at age 65: 4,430 in today s money Putting it another way, this would have the effect of bringing the assumed annual investment growth, after inflation, down from 2.5% to 1.5% per year. 20 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

21 Other information Client category We classify you as a 'retail client' under Financial Conduct Authority (FCA) rules. This means you'll receive the highest level of protection for complaints and compensation and receive information in a straightforward way. Financial Strength Prudential meets EU standards for meeting its financial obligations. You can read our solvency and financial conditions reports at or if you contact us we can post some information to you. Compensation If we get into financial difficulties which may affect our ability to pay your claim, you may be eligible to receive compensation under the Financial Services Compensation Scheme (FSCS). The FSCS is an independent body set up by Government to provide compensation for people where their authorised financial services provider gets into financial difficulties and becomes unable, or unlikely to be able, to pay claims against it. This circumstance is widely referred to as being in default. It is important for you to be aware that you may not always be able to make a claim under the FSCS, and there are also limitations in the amount of compensation you may receive. Any compensation available will depend on your eligibility, the type of financial product or service involved, the investment funds selected (if applicable) and the circumstances of the claim. You can find out more information on the FSCS and examples of limits in the scope of FSCS cover for your plan at or you can call us. Information is also available from the Financial Services Compensation Scheme. Visit their website: Or write to: The Financial Services Compensation Scheme PO Box 300 Mitcheldean GL17 1DY Or call the FSCS. Telephone: Terms and conditions This Key Features Document gives a summary of your plan. Further details are set out in the Policy Document which is available on request using our contact information on the last page, and will also be sent to you when your plan starts. Conflict of Interest We want to make sure that we uphold our reputation for conducting business with integrity. If we become aware that our interests may conflict with yours we will take all reasonable steps to manage it in an appropriate manner. We have drawn up a policy to deal with any conflicts of interest. If you would like to know the full details of our Conflict of Interest Policy, please contact our Customer Service Team on the contact details on the back page. Law The law of England and Wales applies to this contract. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 21

22 Our regulators We are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Prudential Assurance Company Limited is entered on the Financial Conduct Authority (FCA) Register, FCA Reference Number The FCA Register is a public record of all the organisations that the FCA regulates. You can contact the FCA at: The Financial Conduct Authority 25 The North Colonnade London E14 5HS Telephone: or consumer.queries@fca.org.uk Prudential Regulation Authority details: The Prudential Regulation Authority Bank of England Threadneedle St London EC2R 8AH Telephone: enquiries@bankofengland.co.uk Communicating with you Our plan documents and terms and conditions are in English and all our other communications with you will be in English. How to make a complaint If you have a complaint, please get in touch with us and we will do everything we can to resolve it. You can also ask us for details of our complaints handling process. Our contact details are in the How to contact us section at the back of this document. If you re not satisfied with our response, you can take your complaint to the Financial Ombudsman Service who help settle individual disputes between consumers and businesses providing financial services: Financial Ombudsman Service Exchange Tower London E14 9SR Telephone: or Or visit the website: Help is also available from the following bodies: The Pensions Ombudsman 11 Belgrave Road London SW1V 1RB Telephone: The Pensions Ombudsman is an independent organisation, set up to investigate complaints about pension administration. The Pensions Advisory Service (TPAS) 11 Belgrave Road London SW1V 1RB Telephone: The Pensions Advisory Service is an independent, government funded body that gives free advice to members of the public about pensions. These services are free and using them won't affect your legal rights. 22 Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan

23 How to contact us If you want to contact us before you buy this plan, you can contact us in the following ways: Write to: Prudential Lancing BN15 8GB UK Phone: Monday to Friday, 8am to 6pm. We may record or monitor calls to improve our service. If you are a deaf customer, who is also a British Sign Language (BSL) user, you can contact us using a Video Relay service. The service, provided by SignVideo, connects customers to fully qualified, registered NRCPD interpreters who will relay your conversation with a member of our customer service team. There is no cost for using this service to call Prudential and we re available to help you Monday to Friday, 8am to 6pm. You'll also find more information at Keep in touch It s important that we keep in touch so, if you change your address or any of your contact details, please let us know. Key Features for salary sacrifice members of the Prudential Group Personal Pension Plan 23

24 Prudential is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group. Registered office at Laurence Pountney Hill, London EC4R 0HH. Registered number Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. GPPK /2018