Are the charges of my present plan reasonable?
If you have a pension that was set up several years ago, they may not be. In 2001, the Government introduced the concept of stakeholder pensions, which capped charges at 1.0%, increasing to 1.5% from June 2005, of the fund value a year. Most pension plans now have lower charges.
Are there any risks involved?
There are risks involved in any investment. It's possible that the value of the fund may go down as well as up for reasons such as investment performance. Pension benefits are not guaranteed.
If you have protected tax-free cash or a low pension age, you may lose this entitlement on transferring to another arrangement. If you've registered for enhanced protection, you may lose this entitlement once you've transferred to another arrangement if you contract out, and/or pay contributions to it. Your financial adviser will be able to tell you if this applies to you.
Do all pensions offer a choice of retirement date?
Yes, benefits may be taken between 50 (rising to 55 on 6 April 2010) and 75.
Can I take a tax-free lump sum on retirement?
You may be able to choose to take up to 25% of your fund as a tax-free lump sum. This amount may be restricted, because there's a maximum limit for the amount of tax-free lump sum anyone can normally have from all of their registered pension schemes. This limit is 25% of the standard lifetime allowance (standard lifetime allowance is the total value of all pension savings that can benefit from tax-relief). In some circumstances you may be entitled to take more than 25% of your fund as tax-free cash. Your financial adviser will be able to tell you if this applies to you.
If you decide not to take your pension from the plan before age 75 then when you reach age 75, you can either buy a pension from a pension company, or transfer your fund to a more flexible retirement plan and take income withdrawals, within limits set down by the Government, from your fund. You wouldn't be able to take any of your fund as a tax-free lump sum.
This information is based on our understanding of current taxation law and Revenue practice, which may change. The value of tax relief depends on your financial circumstances.
Do all schemes offer investment options tailored to individual preferences?
There are enormous differences between the choices offered. If you want to make sure the balance between risk and return in your pension investments reflects your own preferences, you should make sure you have a pension that offers a full range of investment funds.
Do all pension plans have the same arrangements if someone dies before retirement?
Yes.
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.
Do all pension plans offer similar levels of service?
No. With some providers, it can be a lengthy and frustrating process getting all the information you need. Others make the information available online. You should make sure that you can have the information you want when you want it. It is, after all, your money.
What's special about AEGON Scottish Equitable pensions?
Over 170 years, we've built a reputation for expert and effective money management. Both our fund management and our personal service are designed to meet the needs of our customers and our exceptional performance has been recognised by several awards.
Next steps
Even if you don't want to transfer immediately, you should review your pension arrangements regularly.
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.
