from MY PENSION PLAN?

Transcription

1 WORKSAVE PENSION PLAN EXAMPLE ILLUSTRATIONS. WHAT might I GET back from MY PENSION PLAN? WORKSAVE PENSION PLAN 1

2 2 WORKSAVE PENSION PLAN Please make sure that you read this document together with the WorkSave Pension Plan Key Features brochure. In this document, we ve given you some examples to show you what your pension pot may be worth when you come to retire and what pension benefits you might receive. Using these examples, you can think about your own goals: Will the amount that you re saving be enough to give you the income that you want or need when you retire? If it s not, then you may want to consider increasing what you pay into your pension plan and / or taking your pension benefits at a later date. As well as showing you what you might get from your pension plan, we also explain what charges will be made and how these could affect what your pension pot is worth. HOW MUCH WILL I BE CHARGED? If you invest in one or more of our investment funds, you will pay two types of charges: 1. Annual management charge (AMC) This charge covers the cost of running your pension plan. The charge that you will pay has been agreed with your employer. We show the AMC as a percentage of the value of your pension pot over a year. We work out the charge daily and take it once a month. We take these charges by selling units in the fund or funds that you re invested in. For example, if the AMC was 0.40% and the value of your pension pot was 5,000 throughout the year, we would charge you 20 over the course of the year. Your employer will be able to tell you the AMC that applies to your plan. If the AMC rate you pay increases, we will tell you about this before any change is made. For more information, please see the WorkSave Pension Member s Booklet. 2. Fund management charge (FMC) This charge covers the cost of running the investment funds. Different investment funds have different charges. In your WorkSave Pension Investment Options brochure you will see the FMC listed next to each of the funds. As an example, you could invest all your pension pot in the Legal & General (PMC) Multi-Asset Fund 3 which has an FMC of 0.13%. If your pension pot was worth 5,000 throughout the year, we would charge you 6.50 over the course of the year. The FMC is made up of two elements an Investment Management Charge (IMC) and Additional Expenses (AE). The FMC of any fund could change in the future. If this is as a result of changes to the IMC, we will tell you. To find out more about fund management charges, please see your WorkSave Pension Investment Options brochure. The Financial Conduct Authority is a financial services regulator. It requires us, Legal & General, to give you this important information to help you to decide whether our WorkSave Pension Plan is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference.

3 WORKSAVE PENSION PLAN 3 The FMC is reflected in the price of the units of each fund rather than being deducted from your pension pot. In the example illustrations, we have shown what you might get back based on investing in the Multi-Asset Lifestyle Profile. In this profile, your pension pot will be invested in one or more of three funds. To see how this works, please see the box on the right. How the Multi-Asset Lifestyle Profile works If you invest in this lifestyle profile, your pension pot will be invested in up to three different funds depending on how far you are from retirement. When you re more than 10 years from your selected retirement date, your pension pot will be wholly invested in the Legal & General (PMC) Multi-Asset Fund 3 (which has an FMC of 0.13%). As you reach 10 years from your selected retirement date, we will gradually move your money into the Legal & General (PMC) Over 15 Year Gilts Index Fund 3 (which has an FMC of 0.8%) and the Legal & General Cash Fund 3 (which has an FMC of 0.1%). When you invest in a lifestyle profile the total FMC you will pay will depend on the proportion of your pension pot is invested in each fund. When you reach your selected retirement date, 75% of the value of your pension pot will be invested in the Legal & General (PMC) Over 15 Year Gilts Index Fund 3 and 25% in the Legal & General Cash Fund 3. WHAT MIGHT I GET BACK FROM MY PLAN? Over the following pages, we ve given you some examples to show you what your pension pot may be worth when you come to retire and what level of pension income you might receive. Using these examples, you can think about your own goals: Will the amount that you re saving be enough to give you the pension income that you want or need when you retire? If not, then you may want to consider increasing what you pay into your plan and/or opening your pension pot at a later date. As well as showing you what you might get from your plan, we also explain how our charges could affect what your pension pot is worth. Please remember that these are just examples and the exact amount you ll get will depend on a number of things including: The actual amounts paid into your plan; How much the investment fund or funds that you invest into your pension pot grow; The actual charges taken from your plan; The cost of buying a pension income (called an annuity ) when you retire. It is also important to remember that inflation will reduce what you can buy with all of the amounts we show. HOW DO I USE THE ILLUSTRATIONS? There are three examples. Each one is based on a different regular amount which includes any applicable tax reliefs, that you and your employer pay into your pension plan. The examples are: a month (page 5 and page 6) a month (page 7 and page 8) a month (page 9 and page 10) You should think about how much is going to be paid into your plan and how long you ll be paying in for before you open your pension pot and take a pension income. You can then look at the example that most closely matches your situation. If none of these examples are close to what will be paid into your plan, you can always add or divide the figures we show to get to the level you and your employer will be paying in. For example, if the total amount being paid into your plan is going to be 100 a month, simply double what is shown in the example for 50. Although doing this won t give you an exact answer (because the effect of charges will be different for other amounts that you and your employer pay in) it will give you an idea of what you might receive.

4 4 WORKSAVE PENSION PLAN WHAT DO THE ILLUSTRATIONS SHOW ME? Each example is broken into two sections: 1. The first section is called What might my pension pot be worth when I retire?. Here, you will see a series of tables that show you how your pension pot might grow over time and what you might get back at the end. We show what you could receive if you were to start paying into your pension plan today starting at four different ages: 25, 35, 45 and 55 and take an income using the money in your pension pot when you reach age 66. As you will see, the earlier you start paying in, the higher the pension income you could get when you come to open your pension pot. We show examples for two options. The first option shows examples of what you might get if you were to use all your pension pot to buy a pension income. The second option shows examples of what you might get if you choose to take 25% of your pension pot as a tax-free cash sum and use the rest to buy a pension income. In each example, we have shown what level of pension income you might receive if you invested in an investment strategy called the Multi-Asset Lifestyle Profile. There is an explanation of how this lifestyle profile works on page 3. To show you what you might get back, we ve used three different annual growth rates: a lower rate, a mid rate and a higher rate. We ve done this for each of the three funds that the Multi-Asset Lifestyle Profile invests in. You can see what these rates are in the table below. Name of fund Legal & General (PMC) Multi-Asset Fund 3 2.5% 4.5% 6.5% Legal & General (PMC) Over 15 Year Gilts Index Fund 3 0.0% 2.0% 4.0% Legal & General Cash Fund 3 0.0% 2.0% 4.0% 2. The second section of each example is called How will the charges affect what my pension pot is worth?. Here we show how the value of your pension pot will be affected by the various charges. There are two columns: The first shows what the value of your pension pot could be if there were no charges; The second shows what the value of your pension pot could be when our charges are taken. For each example, we have assumed the following: That you will take your pension benefits when you reach age 66. You may choose to retire earlier or later than this. However, please remember that the sooner you open your pension pot, the less time there will be for your pension pot to build up. This could reduce the amount of pension income that you receive; That the amounts you and your employer pay in will remain the same throughout the term of your pension plan; That all the money paid into your plan will be invested in the Multi-Asset Lifestyle Profile and will remain invested in this strategy until the retirement age shown. Please remember that you can choose to invest in a different lifestyle profile or one or more investment funds. These may have different charges and assumed growth rates to the ones we ve shown here. For more information about the funds that you can choose from, please see your WorkSave Pension Investment Options brochure; That all charges taken from your plan will remain the same throughout the term of your plan. We have also assumed that when you retire: You will buy a pension income (an annuity) that will be paid at the start of each month, for the rest of your life and for no less than five years; Your pension income payments will remain the same each year; When you die, no income will be paid to any surviving spouse or registered civil partner. When you do come to retire and buy a pension income, you don t have to buy it from us. It s always best to shop around to get the deal that best meets your needs and circumstances.

5 WORKSAVE PENSION PLAN 5 EXAMPLE 1 PAYING IN 50 A MONTH In this example, we have assumed that the total amount that you and your employer pay in, including tax reliefs, will be 50 a month. We ve also assumed that these amounts will remain the same until you retire at age 66. The charges that we ve used are an AMC of 0.4% and an FMC for each of the three funds in the Multi-Asset Lifestyle Profile as described in the box on page 3. WHAT MIGHT MY PENSION POT BE WORTH WHEN I RETIRE? The table below shows how much your pension pot might be worth when you retire. The tables below show what level of pension income you might get if you take the benefits from your plan at age 66. Your total projected pension pot could provide you with: Option 1 A full pension every year for your lifetime of: 25th birthday 1,340 2,820 5,890 35th birthday 947 1,720 3,110 45th birthday ,510 55th birthday Total projected pension pot of: 25th birthday 33,500 53,800 89,600 35th birthday 22,800 32,100 46,300 45th birthday 14,000 17,500 22,100 55th birthday 6,740 7,550 8,460 Please remember that: These are examples and are not the minimum or maximum amounts that you could get back; It is possible that the value of the investment funds in your plan could go down. This means that you could get back less than you paid in; Inflation will reduce what you can buy with the amounts we show; The lower, mid and higher growth rates that we ve used are shown in the table on page 4. Option 2 A tax-free cash sum of: PLUS a pension every year for your lifetime of: OR 25th birthday 8,370 13,400 22,400 35th birthday 5,700 8,040 11,500 45th birthday 3,500 4,370 5,520 55th birthday 1,680 1,880 2,110 25th birthday 1,010 2,110 4,420 35th birthday 710 1,290 2,330 45th birthday ,130 55th birthday

6 6 WORKSAVE PENSION PLAN HOW WILL THE CHARGES AFFECT WHAT MY PENSION POT IS WORTH? The table below shows what your pension pot might be worth at the end of the first, third, fifth and final year of paying into your plan. The charges that we ve used are those that we described under the heading How much will I be charged? on page 2 and in the coloured box on page 3. WHAT YOUR PENSION POT COULD BE WORTH At the end of year Total paid in to date If no charges are taken After our charges are taken 1 25th, 35th, 45th and 55th birthday th, 35th or 45th birthday 1,800 1,920 1,910 55th birthday 1,800 1,920 1,900 25th, 35th or 45th birthday 3,000 3,360 3,310 55th birthday 3,000 3,310 3,260 25th birthday 24,600 61,600 53,800 When you reach retirement at age 66 35th birthday 18,600 35,400 32,100 45th birthday 12,600 18,600 17,500 55th birthday 6,600 7,770 7,550 The figures above use a growth rate that takes into account the mid growth rate for each of the funds used in the Multi-Asset Lifestyle Profile. The growth rate varies depending on what age you start your plan. These growth rates are shown in the table below. Additionally, the charges we ve taken into account in the last column of the table above effectively reduce the investment growth rate each year. These reduced rates are also shown in the table below. If you started your Composite growth rate Reduced growth rate after our charges are taken 25th birthday 4.0% 3.5% 35th birthday 3.9% 3.3% 45th birthday 3.6% 3.0% 55th birthday 2.9% 2.4% WARNING The charges mean that the value of your pension pot could be less than has been paid in, particularly if payments stop during the early years of your pension plan.

7 WORKSAVE PENSION PLAN 7 EXAMPLE 2 PAYING IN 150 A MONTH In this example, we have assumed that the total amount that you and your employer pay in, including tax reliefs, will be 150 a month. We ve also assumed that these amounts will remain the same until you retire at age 66. The charges that we ve used are an AMC of 0.4% and an FMC for each of the three funds in the Multi-Asset Lifestyle Profile as described in the box on page 3. WHAT MIGHT MY PENSION POT BE WORTH WHEN I RETIRE? The table below shows how much your pension pot might be worth when you retire. The tables below show what level of pension income you might get if you take the benefits from your plan at age 66. Your total projected pension pot could provide you with: Option 1 A full pension every year for your lifetime of: 25th birthday 4,040 8,460 17,600 35th birthday 2,840 5,180 9,330 45th birthday 1,800 2,890 4,530 55th birthday 898 1,280 1,770 Total projected pension pot of: 25th birthday 100, , ,000 35th birthday 68,400 96, ,000 45th birthday 42,000 52,500 66,300 OR 55th birthday 20,200 22,600 25,300 Please remember that: These are examples and are not the minimum or maximum amounts that you could get back; It is possible that the value of the investment funds in your plan could go down. This means that you could get back less than you paid in; Inflation will reduce what you can buy with the amounts we show; The lower, mid and higher growth rates that we ve used are shown in the table on page 4. Option 2 A tax-free cash sum of: PLUS a pension every year for your lifetime of: 25th birthday 25,100 40,300 67,200 35th birthday 17,100 24,100 34,700 45th birthday 10,500 13,100 16,500 55th birthday 5,060 5,660 6,340 25th birthday 3,030 6,340 13,200 35th birthday 2,130 3,890 6,990 45th birthday 1,350 2,170 3,400 55th birthday ,320

8 8 WORKSAVE PENSION PLAN HOW WILL THE CHARGES AFFECT WHAT MY PENSION POT IS WORTH? The table below shows what your pension pot might be worth at the end of the first, third, fifth and final year of paying into your plan. The charges that we ve used are those that we described under the heading How much will I be charged? on page 2 and in the coloured box on page 3. WHAT YOUR PENSION POT COULD BE WORTH At the end of year Total paid in to date If no charges are taken After our charges are taken 1 25th, 35th, 45th and 55th birthday 1,800 1,840 1, th, 35th or 45th birthday 5,400 5,780 5,730 55th birthday 5,400 5,760 5,710 25th, 35th or 45th birthday 9,000 10,000 9,940 55th birthday 9,000 9,930 9,800 25th birthday 73, , ,000 When you reach retirement at age 66 35th birthday 55, ,000 96,500 45th birthday 37,800 55,800 52,500 55th birthday 19,800 23,300 22,600 The figures above use a growth rate that takes into account the mid growth rate for each of the funds used in the Multi-Asset Lifestyle Profile. The growth rate varies depending on what age you start your plan. These growth rates are shown in the table below. Additionally, the charges we ve taken into account in the last column of the table above effectively reduce the investment growth rate each year. These reduced rates are also shown in the table below. If you started your Composite growth rate Reduced growth rate after our charges are taken 25th birthday 4.0% 3.5% 35th birthday 3.9% 3.3% 45th birthday 3.6% 3.0% 55th birthday 2.9% 2.4% WARNING The charges mean that the value of your pension pot could be less than has been paid in, particularly if payments stop during the early years of your pension plan.

9 WORKSAVE PENSION PLAN 9 EXAMPLE 3 PAYING IN 250 A MONTH In this example, we have assumed that the total amount that you and your employer pay in, including tax reliefs, will be 250 a month. We ve also assumed that these amounts will remain the same until you retire at age 66. The charges that we ve used are an AMC of 0.4% and an FMC for each of the three funds in the Multi-Asset Lifestyle Profile as described in the box on page 3. WHAT MIGHT MY PENSION POT BE WORTH WHEN I RETIRE? The table below shows how much your pension pot might be worth when you retire. The tables below show what level of pension income you might get if you take the benefits from your plan at age 66. Your total projected pension pot could provide you with: Option 1 A full pension every year for your lifetime of: 25th birthday 6,740 14,100 29,400 35th birthday 4,730 8,640 15,500 45th birthday 3,000 4,820 7,560 55th birthday 1,490 2,130 2,950 Total projected pension pot of: 25th birthday 167, , ,000 35th birthday 114, , ,000 45th birthday 70,000 87, ,000 55th birthday 33,700 37,700 42,300 Please remember that: These are examples and are not the minimum or maximum amounts that you could get back; It is possible that the value of the investment funds in your plan could go down. This means that you could get back less than you paid in; Inflation will reduce what you can buy with the amounts we show; The lower, mid and higher growth rates that we ve used are shown in the table on page 4. Option 2 A tax-free cash sum of: PLUS a pension every year for your lifetime of: OR 25th birthday 41,800 67, ,000 35th birthday 28,500 40,200 57,900 45th birthday 17,500 21,800 27,600 55th birthday 8,430 9,440 10,500 25th birthday 5,050 10,500 22,100 35th birthday 3,550 6,480 11,600 45th birthday 2,250 3,620 5,670 55th birthday 1,120 1,600 2,210

10 10 WORKSAVE PENSION PLAN HOW WILL THE CHARGES AFFECT WHAT MY PENSION POT IS WORTH? The table below shows what your pension pot might be worth at the end of the first, third, fifth and final year of paying into your plan. The charges that we ve used are those that we described under the heading How much will I be charged? on page 2 and in the coloured box on page 3. WHAT YOUR PENSION POT COULD BE WORTH At the end of year Total paid in to date If no charges are taken After our charges are taken 1 25th, 35th, 45th and 55th birthday 3,000 3,070 3, th, 35th or 45th birthday 9,000 9,630 9,550 55th birthday 9,000 9,600 9,520 25th, 35th or 45th birthday 15,000 16,800 16,500 55th birthday 15,000 16,500 16,300 25th birthday 123, , ,000 When you reach retirement at age 66 35th birthday 93, , ,000 45th birthday 63,000 93,100 87,500 55th birthday 33,000 38,800 37,700 The figures above use a growth rate that takes into account the mid growth rate for each of the funds used in the Multi-Asset Lifestyle Profile. The growth rate varies depending on what age you start your plan. These growth rates are shown in the table below. Additionally, the charges we ve taken into account in the last column of the table above effectively reduce the investment growth rate each year. These reduced rates are also shown in the table below. If you started your Composite growth rate Reduced growth rate after our charges are taken 25th birthday 4.0% 3.5% 35th birthday 3.9% 3.3% 45th birthday 3.6% 3.0% 55th birthday 2.9% 2.4% WARNING The charges mean that the value of your pension pot could be less than has been paid in, particularly if payments stop during the early years of your pension plan.

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12 Legal & General (Portfolio Management Services) Limited Registered in England and Wales No Registered office: One Coleman Street, London EC2R 5AA We are authorised and regulated by the Financial Conduct Authority. W /13 H138638