Is there a limit on how much I can contribute to a pension plan?
You will be eligible for tax relief on any personal contributions up to the greater of 100% of your earnings and £3600 each year (this limit applies across all pension arrangements that you make contributions to in any year). We'll refund any contribution you make to this arrangement that doesn't qualify for tax relief.
If the total contributions paid by you and/or your employer to all your pension arrangements in any year are more than that year's annual allowance (for the tax year 2007/08 this is £225,000), you'll be taxed 40% of the amount paid over the annual allowance.
What happens if I die before I retire?
If you die before you retire we'll pay the value of your fund as a cash lump sum. If you've arranged your plan under trust, we'll pay the lump sum to the trustees. If it's not arranged under trust we'll decide who to pay the lump sum to. We take into account your circumstances when you die and anyone you've previously stated you want the money to go to.
The lump sum death benefits will be tested against the lifetime allowance and a tax charge of 55% will be payable on any excess.
You can opt to have your death benefits paid as a pension to your husband, wife, civil partner or dependant(s). If paid as a pension, it wouldn't be tested against the lifetime allowance and there would be no tax charge.
What happens to the cash in my pension fund at my retirement date?
At retirement, the money in your fund is used to buy an annuity, which gives you an income for life. This is based on your projected lifespan. If you die earlier, the payments may stop depending on the type of annuity you've chosen. However, if you live longer, you'll receive income above that covered by your initial payment.
This information is based on our understanding of current taxation law and Revenue practice, which may change.
Next steps
If you would like more information about our pensions, you should talk to your financial adviser.
Further information... Who should I talk to?
Speak to your financial adviser to find out more. If you don't have an adviser, the IFA Promotion Service or the Society of Financial Advisers can help you find one.
