PENSION ENCASHMENTS AND SMALL POTS ADVISED NON-GMP CASES

PENSION ENCASHMENTS AND SMALL POTS ADVISED NON-GMP CASES

IMPORTANT INFORMATION Please read this section carefully before completing this application form. This form can only be used where you are taking a pension encashment or a small pot. Only 25% of the payment you receive will be tax-free, with the remainder of the payment being taxed. If you want to take only your tax-free cash from your pension plan just now (and put the rest of your pension plan into flexible drawdown), you or your adviser should contact us directly. Scottish Widows pensions 0131 655 6000 Halifax pensions 0345 030 6244 Clerical Medical pensions 0345 030 6243 Please complete this form if you want to take some or all of your pension plan as a lump sum payment and your financial adviser is advising you about this. You cannot use this form if your plan has an element of Guaranteed Minimum Pension (GMP) your adviser should be able to confirm this for you. If your plan does have a GMP, you or your adviser should contact us directly on the numbers given above. You should answer each question fully and accurately with your financial adviser. Taking some or all of your pension savings in cash is an important decision that could affect the rest of your life. You can t change your mind once you have requested the payment. Your plan may have important features with valuable benefits it s important that you discuss your options with your financial adviser before you make a decision. If your plan is worth more than 30,000 and has a Guaranteed Annuity Rate or Guaranteed Conversion Option, and you are taking a full or partial pension encashment, you or your financial adviser will need to attach a copy of the written statement s/he is required to give you to confirm that you have received appropriate financial advice about your retirement options and the decision you are about to make. We will not be able to process your request without this, as it s a legal requirement. If you take a full or partial pension encashment, you will be subject to the Money Purchase Annual Allowance (MPAA). This means that the amount you can contribute to all money purchase pensions will be further limited to 4,000 after which you will be subject to an annual allowance charge. (If you first flexibly accessed your pension before 9th July 2015, transitional arrangements apply for the 2015/2016 tax year only ask your financial adviser for details). Note that the MPAA does not apply if you take your pension under the small pots rules. FULL PENSION ENCASHMENT (FPE) AND PARTIAL PENSION ENCASHMENT (PPE) Full pension encashment is available under all plans that do not have a Guaranteed Minimum Pension. There are some restrictions which apply to taking partial pension encashments with us, including minimum amounts. These restrictions are explained on our website, www.scottishwidows.co.uk/pension-encashments Partial pension encashment may not be available under your current plan. If so, you will need to transfer your plan either to another pension product with us, called Retirement Account, or to another provider. Your financial adviser will be able to tell you if you need to transfer your policy. If your plan is worth 10,000 or less, and you have not taken payments under the small personal pension lump sum rules on more than two previous occasions, we will treat a full pension encashment request as a small pot request. If you transfer your plan, the charges on the new product you choose may be higher than on your existing policy, and you may lose important features with valuable benefits. You ll need to make a separate application for each pension encashment you request. If you re taking a full or partial pension encashment, 25% will normally be tax-free and the remainder will be taxed as income. If this is the first time you have taken an encashment, you will be subject to emergency tax which means you could be paying much more tax initially. Subsequent encashments will be taxed using your tax code, where it has been provided. To ensure that you pay the correct tax for the tax year, it is your responsibility to contact your local tax office or HM Revenue & Customs. SMALL POTS If your plan is worth less than 10,000 and you have not taken payments under the small personal pension lump sum rules on more than two previous occasions, your encashment will be treated as a small pot. If you re taking a small pot, 25% will be tax-free and the remainder will be taxed at 20%. You could also have a further liability if you re already a higher or additional rate tax-payer or become one through taking the small pot. 1

NOTE TO SECTION A (1) Your National Insurance Number can be found on a pay slip, a P60 or a tax return. If you have a National Insurance Number, you must provide it, as we can t process your request without it. If you can t find your National Insurance number, please phone HM Revenue & Customs General Enquiries 0300 200 3500. SECTION A: YOUR DETAILS Policy number Your title Mr/Mrs/Miss/Ms/Other (please specify) Your first name(s) Your surname Sex Male Female Date of birth (DD MM YYYY) Your address Postcode Telephone number (useful if there is a query) National Insurance No. (See note 1) Nationality SECTION B: BANK ACCOUNT DETAILS FOR PAYMENT OF CASH LUMP SUM If you don t provide your bank details, we ll write a cheque in your name and send it to your home address. We cannot pay this sum to another person. Name of bank Address Postcode Sort code Account number Name of account to be credited Roll number (Building Society) If bank is overseas, please provide the IBAN number 2

SECTION C: SMALL POTS I want to take my pension plan as a small pot lump sum payment. I confirm that I have not taken a payment under the small personal pension lump sum rules on more than two previous occasions. Please tick the boxes below to confirm you ve read the following statements After taking advice from my financial adviser, I have opted for a cash sum rather than an income. I realise that, in the absence of any other income in retirement, this may increase my likelihood of relying on the state pension and benefits in retirement. I know the value of my pension plan and confirm that I am instructing Lloyds Banking Group to pay me the total value of my pension plan in cash (less any tax) to my bank account. I understand that the sum I receive will be paid into my bank account less tax and that if I choose to reinvest the money the charges applying to the new investment may be higher. I understand that tax will be deducted at 20% on the difference between the value of the lump sum payment and the available tax-free cash sum, and that further tax may be due if I am already a higher or additional rate tax-payer or become one as a result of taking the small pot. I realise that it is my responsibility to contact my local tax office or HMRC to ensure I pay the right tax for the tax year. NOTE TO SECTION D (1) MPAA The Money Purchase Annual Allowance (MPAA) is currently 4,000. The MPAA applies to you if you have flexibly accessed your pensions from us or any other provider and have received any of the payments listed below from 6th April 2015 onwards: a payment from a flexible access drawdown fund (also known as a flexi-access drawdown fund); a payment from a capped drawdown fund which would exceed existing capped drawdown limits; a pension encashment (also known as an uncrystallised funds pension lump sum); a payment under a flexible annuity contract; a pension payment from a money purchase scheme which has fewer than 11 other pensioner members; a stand-alone lump sum from a money purchase arrangement where you were entitled to primary protection with a right to take a lump sum of greater than 375,000. The MPAA applies to all contributions you pay (or that are paid on your behalf e.g. employer contributions and death-inservice premiums) each year to all money purchase pension schemes of which you are a member. If the MPAA applies to you and your overall contributions exceed it, you will be liable to pay a tax charge based on your highest rate of income tax. The MPAA does not apply if you have taken only income from a capped drawdown plan; tax-free cash (pension commencement lump sums) when using your plan to purchase an annuity or drawdown plan; or small pots taken as a cash lump sum. In these circumstances, the higher annual allowance applies to you. SECTION D: FULL PENSION ENCASHMENT (FPE) Remember that only 25% of an FPE will be tax-free, with the remainder of the payment being taxed. If you want to take only your tax-free cash from your plan just now (and put the rest of your plan into flexible drawdown), you or your adviser should contact us directly on the numbers given at the beginning of this form. It s important that you understand the tax implications of taking an FPE. If this is the first time you have taken an encashment, tax will be deducted on an emergency basis. Subsequent encashments will be taxed using your tax code, where this has been provided. You can use our interactive tax calculator on our website www.scottishwidows.co.uk/options to get more information. I want to take my pension plan as a lump sum payment. Please tick the boxes below to confirm you ve read the following statements and complete the Lifetime Allowance Questionnaire in section G After taking advice from my financial adviser, I have opted for a cash sum rather than an income. I realise that, in the absence of any other income in retirement, this may increase my likelihood of relying on the state pension and benefits in retirement. I realise that cashing in my plan will mean my future pension contributions that receive tax relief will normally be limited to the Money Purchase Annual Allowance (MPAA). (see note 1) If this is the first time I have taken an encashment, I will notify the providers of any other money purchase or hybrid pension plans I have and that I am currently contributing to or will contribute to in the future that I am subject to this, within 91 days of receiving notification from you that I have encashed my pension and will notify the provider of any new plan I take out when I apply for such a plan. I understand that failure to do this may incur a fine by HM Revenue & Customs. I know the value of my pension plan and confirm that I am instructing Lloyds Banking Group to pay me the total value of my pension plan in cash (less any tax) to my bank account. I understand that the sum I receive will be paid into my bank account less tax and that if I choose to reinvest the money the charges applying to the new investment may be higher. I understand that tax will be payable on the difference between the value of the lump sum payment and the available tax-free cash sum and if this is the first time I have taken a pension encashment, this will be on an emergency tax code basis. Subsequent encashments will be subject to tax using my tax code where this has been provided. I realise that it is my responsibility to contact my local tax office or HMRC to ensure I pay the right tax for the tax year. 3

NOTE TO SECTION E (1) MPAA The Money Purchase Annual Allowance (MPAA) is currently 4,000. The MPAA applies to you if you have flexibly accessed your pensions from us or any other provider and have received any of the payments listed below from 6th April 2015 onwards: a payment from a flexible access drawdown fund (also known as a flexi-access drawdown fund); a payment from a capped drawdown fund which would exceed existing capped drawdown limits; a pension encashment (also known as an uncrystallised funds pension lump sum); a payment under a flexible annuity contract; a pension payment from a money purchase scheme which has fewer than 11 other pensioner members; a stand-alone lump sum from a money purchase arrangement where you were entitled to primary protection with a right to take a lump sum of greater than 375,000. The MPAA applies to all contributions you pay (or that are paid on your behalf e.g. employer contributions and death-inservice premiums) each year to all money purchase pension schemes of which you are a member. If the MPAA applies to you and your overall contributions exceed it, you will be liable to pay a tax charge based on your highest rate of income tax. The MPAA does not apply if you have taken only income from a capped drawdown plan; tax-free cash (pension commencement lump sums) when using your plan to purchase an annuity or drawdown plan; or small pots taken as a cash lump sum. In these circumstances, the higher annual allowance applies to you. SECTION E: PARTIAL PENSION ENCASHMENT (PPE) Remember that only 25% of a PPE will be tax-free, with the remainder of the payment being taxed. If you want to take only your tax-free cash from your plan just now (and put the rest of your plan into flexible drawdown), you or your adviser should contact us directly on the numbers given at the beginning of this form. 1. I want to take gross from my pension plan as a lump sum payment (If you decide to take a gross amount from your plan, the amount you receive will be reduced by any tax that applies.) OR 2. I want to take net from my pension plan as a lump sum payment (If you decide to take a net amount from your plan, we ll need to encash a larger proportion of your pension plan to allow for the immediate tax deduction.) It s important you understand the tax implications of taking a PPE. If this is the first time you have taken an encashment, tax will be deducted on an emergency code basis. Subsequent encashments will be taxed using your tax code, where this has been provided. You can use our interactive tax calculator on our website www.scottishwidows.co.uk/options to get more information. Please tick the boxes below to confirm you ve read the following statements and complete the Lifetime Allowance Questionnaire in section G - After taking advice from my financial adviser, I have opted for a partial cash sum rather than an income. I realise that, in the absence of any other income in retirement, this may increase my likelihood of relying on the state pension and benefits in retirement. I realise that taking a cash sum will mean my future pension contributions that receive tax relief will normally be limited to the Money Purchase Annual Allowance (MPAA). (See note 1) If this is the first time I have taken an encashment, I will notify the providers of any other money purchase or hybrid pension plans I have and that I am currently contributing to or will contribute to in the future that I am subject to this, within 91 days of receiving notification from you that I have encashed my pension and will notify the provider of any new plan I take out when I apply for such a plan. I understand that failure to do this may incur a fine by HM Revenue & Customs. I know the value of my pension plan and confirm that I am instructing Lloyds Banking Group to pay me the lump sum I have requested above in cash (less any tax) to my bank account. I understand that the sum I receive will be paid into my bank account less tax and that if I choose to reinvest the money the charges applying to the new investment may be higher. I understand that tax will be payable on the difference between the value of the lump sum payment and the available tax-free cash sum and if this is the first time I have taken a pension encashment, this will be on an emergency tax code basis. Subsequent encashments will be subject to tax using my tax code where this has been provided. I realise that it is my responsibility to contact my local tax office or HMRC to ensure I pay the right tax. I understand I can take further lump sum payments, however restrictions may apply as to the minimum amounts and number I can take in any one year. Lloyds Banking Group will reasonably decide which units to cancel to provide the encashment. 4

NOTE TO SECTION F (1) Written statement requirements where you are required to take advice, it must be given by someone who is independent of the employer and/or trustees/ manager of the scheme. The adviser can be an independent or restricted financial adviser. The adviser has to give you a written statement about the advice in relation to safeguarded benefits which include Guaranteed Annuity Rates and Guaranteed Conversion Options. We will need to see this statement and check the FCA register to verify that the adviser is authorised to advise on the transaction. The statement MUST include the following detail: your name, address and policy number (or scheme name) confirmation that the adviser has the relevant permissions to give the advice along with their firm reference number confirmation that the advice given is specific to the proposed transaction and the decision you are about to make. It must be provided within 3 months of requesting the transaction. After this date, the advice will no longer be considered as valid and the original request cannot proceed. (These requirements also apply to policies with Guaranteed Minimum Pensions.) SECTION F: DECLARATION I request to take all or part of the value of my pension plan as specified above as a lump sum payment. I understand that tax will be payable as described above on the difference between the value of the lump sum payment and the available tax-free cash sum. I am solely responsible for any additional tax charges or any penalties which arise if the information I have provided is incorrect or if I have failed to comply with any aspect of this request. If I am taking a partial pension encashment, I understand I can take further lump sum payments, however restrictions may apply as to the minimum amounts and number I can take in any one year. Lloyds Banking Group will deduct units for these withdrawals appropriately as the contract allows. I confirm that if my plan is worth more than 30,000 and has a Guaranteed Annuity Rate or Guaranteed Conversion Option, and I am taking a full or partial pension encashment, I have attached a copy of the written statement my financial adviser has given me, confirming that I have received appropriate financial advice about my retirement options and the decision I have made. We will not be able to process your request without this, as it s a legal requirement. (see note 1) Signed Date (DD MM YYYY) 5

SECTION G: LIFETIME ALLOWANCE You must complete this section if you are taking a Full or Partial Pension Encashment. You do not need to complete this section if you are taking a small pot. What is the Lifetime Allowance? A Lifetime Allowance (also referred to as standard Lifetime Allowance), set by the Government, will apply to the total value of pension benefits you can receive from all your pension plans. The Lifetime Allowance for the 2017/2018 tax year is 1m. The State Pension does not count against the Lifetime Allowance. What happens if I exceed this limit? A Lifetime Allowance tax charge must normally be deducted from any pension benefits that exceed the Lifetime Allowance. This charge can either be applied at a rate of 55% if the excess is taken as a lump sum or a rate of 25% if the excess benefits are taken as income. Any benefits taken as income will be taxed at your marginal rate of income tax. What about Protection from the Lifetime Allowance tax charge? It is possible to apply for various forms of protection from the Lifetime Allowance charge. If your application for one or more forms of protection has been successful you should receive a certificate from HM Revenue & Customs (HMRC). For further information on whether you have or should apply for protection please speak to your financial adviser. If transitional protection applies, please provide copies of the relevant certificate(s) issued by HMRC. If you have Primary Protection, we also require confirmation of your remaining Tax Free Cash entitlement. Please complete the relevant sections and sign the declaration. 1. Unused Lifetime Allowance Please tick this box if you have sufficient unused Lifetime Allowance to enable the value of the pension benefits to be provided from this plan to be paid without deduction of a Lifetime Allowance tax charge. 2. Pensions in payment as at 5th April 2006 Please tick this box if you have no pensions in payment which began before 6th April 2006 OR Confirm the total gross annual amount(s) of pension benefits currently payable from pensions taken before 6th April 2006, or if this pension is in the form of income drawdown, the current maximum yearly income you could take (calculated at the last review date). 3. Lifetime Allowance used up Please tick this box if you have not taken any other pension benefits since 6th April 2006 OR Confirm the total percentage of your Lifetime Allowance used up by taking pension benefits on or after 6th April 2006. % 4. Declaration I confirm that, to the best of my knowledge, the information provided above, whether in my own handwriting or not, is correct. I understand that any delay in providing the required information and documentation will delay settlement of the pension benefits I have selected, and could result in a Lifetime Allowance tax charge being applied when benefits are taken. Your name Your signature Date (DD MM YYYY) WARNING A penalty or other fine may be imposed by HMRC if false or misleading information is provided on this form. 6

Clerical Medical is a trading name of Scottish Widows Limited. Halifax Financial Services is a trading name of Scottish Widows Limited. Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655. 54858 05/17