Key Features. Pension Annuity. This brochure outlines the key features of the Just Retirement Pension Annuity. Contents

Transcription

1 Pension Annuity Key Features This brochure outlines the key features of the Just Retirement Pension Annuity. The Financial Conduct Authority is a financial services regulator. It requires us, Just Retirement, to give you this important information to help you to decide whether our Pension Annuity 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. Please read this document together with your personal quotation which shows the benefits available to you. If you have any questions please speak to your financial intermediary. Contents Key features of the Pension Annuity 2 Its aims 2 Your commitment 2 Risks 2 Questions and answers 3 Further information 5 Glossary 6 Compensation 7 What to do if you are unhappy 7 About Just Retirement Limited 7

2 Key features of the Pension Annuity Key features of the Pension Annuity Its aims To pay you a secure income that is guaranteed for life. To give you the opportunity to arrange retirement benefits suited to your personal and family circumstances. Please see the questions and answers section for details of the options available. To provide a higher income than a standard annuity based on your personal, health and lifestyle information. Your commitment To use your pension fund to buy the Just Retirement Pension Annuity. To make a once-and-for-all decision about the amount of guaranteed lifetime income and the type of retirement benefits you want. To answer all personal, health and lifestyle questions truthfully, accurately, and to the best of your knowledge so we can pay you the amount of income you are entitled to. Risks Once the 30 day cancellation period has expired and your Pension Annuity has been set up you cannot change your payment options, even if your personal circumstances change. You will not be able to cash in your Pension Annuity. If you die in the early years of retirement and you have not selected a dependant s income and/or one of the other death benefit options, the income will stop and the total income you receive may be less than the pension fund used to purchase the Pension Annuity. Please see the questions and answers section for details of dependant s income and the other death benefit options available. Depending on the income option you choose, inflation may reduce the real spending power of your income payments over time. Please see the questions and answers section for details of the income options available. If we find out that the personal, lifestyle or health information provided to us is incorrect we may reduce your income to recover any extra amount we have paid to you, or if reasonable, cancel the policy and cease payments. 2

3 Questions and answers What is a pension annuity? A pension annuity is a way of turning your pension fund into a secure income that is guaranteed for life. What is the difference between a standard and enhanced pension annuity? Just Retirement s Pension Annuity is an enhanced annuity, also known as an individually underwritten annuity. This aims to provide you with a higher level of guaranteed lifetime income than you would get from a standard annuity by taking into consideration detailed personal, health and lifestyle information. How much income will you pay me? We have enclosed a personal quotation with this Key Features Document. This shows how much income you might expect to receive based on an assumed value of your accumulated pension fund and the combination of options you have selected. If the final value of your pension fund is higher or lower than the amount shown, the level of your retirement income will change accordingly. What income options do I have? You can have an income that remains the same for the rest of your life, or you can choose one of the following income escalation options: Income which increases each year by a fixed percentage. Income which increases or decreases in line with inflation. Income which increases in line with inflation, but will not decrease. If you choose an income escalation option, you will start off with a smaller income. How often can I receive my income payments? You can choose to receive your income payments monthly, quarterly or annually. You can receive your income in advance or in arrears. Can I take a tax-free lump sum? You are able to take a tax-free lump sum of up to 25% of the value of your pension fund, as long as you have not already received this from your existing pension provider. The tax-free lump sum is also known as a Pension Commencement Lump Sum, or PCLS. What if I need access to a larger amount? If you need access to a larger amount you can also take a taxable lump sum, although you must leave at least 2,000 with which to purchase guaranteed lifetime income. The taxable lump sum will be taxed as earned income. Please be aware that if you take a taxable lump sum, you will be deemed to have accessed your pension flexibly, and this will reduce your ability to make further contributions to a money purchase or hybrid pension scheme. For further information, please read our Annual allowance factsheet available at If you take a tax-free lump sum and/or a taxable lump sum, the amount of guaranteed lifetime income you ll be able to purchase will be lower than if you hadn t taken a lump sum payment. Can I protect my spouse, civil partner or other dependant? You are able to do this by selecting the dependant s income option: You can choose for all or part of your income to be paid to a named dependant in the event of your death. This could be your spouse, partner or someone else who is financially dependent on you. You can specify how much income they will receive, up to 100% of your income level. Selecting dependant s income will reduce the amount of guaranteed lifetime income you receive each year. 3

4 Key features of the Pension Annuity Can I pass on my pension fund when I die? You are able to choose one of the following death benefit options: By selecting the value protection option, you can protect a chosen percentage of your pension savings so that when you die the unused portion will be paid as a lump sum to a beneficiary or beneficiaries. Alternatively, by selecting a guaranteed payment period, you can guarantee your income so that in the event of your death it will continue to be paid for a specified period of time between one and 30 years. (The maximum length will be 10 years if your income is being paid as scheme pension, we will inform you if this is the case.) Selecting one of the death benefit options will reduce the amount of guaranteed lifetime income you receive each year. How can I be sure I am selecting the combination of options that best suits my personal circumstances? Most of the options described above will change the amount of guaranteed lifetime income you receive each year. You should take this into account and balance it with your personal circumstances and needs. To help you find the right combination of options, you can ask for several different quotes to see how much difference each option makes to the guaranteed lifetime income payable. Please note that some types of pension fund may require certain options to be included automatically because of legislation. For example, if your pension fund includes Guaranteed Minimum Pension (GMP) you may have to include an income for a spouse or civil partner at a set rate. Can I cancel if I change my mind? You can cancel your application before the annuity is set up, and up to 30 days after receiving an Important information about your right to cancel form, which we will send with your policy documents. If you decide to cancel your annuity, you must return the Important information about your right to cancel form, and any tax-free lump sums and income already paid to you. Once the 30 day cancellation period has expired, you will not then be able to cancel your annuity. On receipt of your request to cancel, we will attempt to return your money to your original pension scheme provider, but if this company is not willing to accept a refund, it is your responsibility to gain agreement from another company to accept your money and inform us who this is. What are Just Retirement s charges? The charges to set up and administer the policy will be calculated at the start of the policy and will be reflected in the income provided. What advice charges or commission do I pay? Adviser charge. If you have received advice from a financial adviser, and want Just Retirement to facilitate the adviser charge from your policy, this charge will be reflected in your personal quotation. If this is the case, your financial intermediary should have discussed and agreed this with you before asking you to sign the application form. Commission. If you haven t received advice, but have received help and information from an intermediary in arranging your policy with us, then we may pay commission to them. The details of any commission due will be shown in your personal quotation. 4

5 Further information Tax Your guaranteed lifetime income and, if applicable, your taxable lump sum will be taxed according to instructions from your local tax office. Income of this type is taxed under the Pay As You Earn (PAYE) system. Any death benefits payable may be subject to tax. We set out below an overview of the tax position. The tax treatment of death benefits is subject to legislation. Tax treatment depends on individual circumstances and may be subject to change in the future. Please speak to your financial intermediary for further details. Any value protection lump sum may be subject to tax: If you die Before age 75 Then The lump sum will be free of tax. Aged 75 or above If you die before 6 April 2016, the lump sum is subject to a tax charge of 45%. If you die on or after 6 April 2016, the lump sum is subject to tax at the recipient s marginal rate of income tax. Any income paid after your death to your dependant or other beneficiary may also be subject to tax: If you die Before age 75 Aged 75 or above Then The income will be free of tax unless your benefits were paid as scheme pension. If your benefits were paid as scheme pension, income payments following your death will be subject to tax at the recipient s marginal rate of income tax. The income will be subject to tax at the recipient s marginal rate of income tax. Tax treatment depends on individual circumstances and may be subject to change in the future. Law The law applicable to the terms and conditions of the contract shall be English Law. The contract will be written in English. The information set out in this Key Facts document represents our understanding of the law and HM Revenue and Customs practices as at the date of publication. Changes to tax rules and other laws may affect the contract terms Client categorisation There are various categories of client set out under financial regulations. Just Retirement will treat you as a retail client which gives you the greatest level of protection, and ensures you get full information about any products you buy. Queries For further information about the Pension Annuity please contact: Just Retirement Limited Vale House Roebuck Close Bancroft Road Reigate Surrey RH2 7RU Tel: Fax: (Lines are open Monday Friday 8:30am to 5:30pm, local call rates apply) customer@justretirement.com 5

6 Key features of the Pension Annuity Glossary Adviser Charge The amount you agree to pay your financial intermediary for the advice they have provided. This will be reflected in your personal quotation. Annual Allowance The maximum amount you can make in pension savings each year before a tax charge applies. Please ask your financial intermediary for more details. Commission If you have not received advice from your financial intermediary, but have received help and information from them, we may pay commission to them. The details of any commission to be paid will be shown in your personal quotation. Death benefit options The collective name used to describe the dependant s income, value protection and the guaranteed payment period options. You can choose dependant s income and/or one other option when you purchase a Pension Annuity. Facilitated Adviser Charge A way of paying your Adviser Charge. If you ask us to facilitate your Adviser Charge, we will pay this to your financial intermediary before using the remaining funds to purchase guaranteed lifetime income. Marginal Rate Marginal rate means that you pay a specified rate of tax on a certain portion of salary. For example, for most people who earn 45,000 the income between 42,385 and 45,000 ( 2,615) will be taxed at the rate of 40% (for the 2015/16 tax year). The lower part of your income will be taxed at the lower tax rates. Pay As You Earn (PAYE) The system for paying income tax and national insurance contributions. Tax and national insurance are automatically deducted by your employer or pension scheme before your wages or pension income are paid to you. National Insurance Contributions are not currently due on pension income. Retirement benefits The name used to describe the different payment options available from the Pension Annuity. These are: guaranteed lifetime income a tax-free lump sum a taxable lump sum dependant s income value protection a guaranteed payment period of up to 30 years, and income escalation. 6

7 Compensation Just Retirement is covered by the Financial Services Compensation Scheme (FSCS). You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim. Further information about compensation arrangements is available from the FSCS, or at What to do if you are unhappy The first step is for us to understand the problem. You can share your concerns with our staff either in person, by telephone, fax, or letter as follows: Tel: Fax: (Lines are open Monday Friday 8:30am to 5:30pm, local call rates apply) Or write to: The Customer Service Manager Just Retirement Limited Vale House Roebuck Close Bancroft Road Reigate Surrey RH2 7RU Should you feel that your complaint is not dealt with to your satisfaction, you can take the matter up with the Financial Ombudsman Service at: Exchange Tower London E14 9SR Tel: Making a complaint will not prejudice your right to take legal proceedings. A copy of our complaints procedure is available in the Customer Support section of our website. Please visit to find out more. About Just Retirement Limited Just Retirement Limited is incorporated as a company limited by shares. Registered in England No Just Retirement s registered Office is at Vale House, Roebuck Close, Bancroft Road, Reigate, Surrey RH2 7RU. Just Retirement is a UK authorised insurance company authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our Financial Services Register number is You can ask us for full details of the contractual terms and conditions. Our address and contact details are below. Just Retirement Limited Vale House Roebuck Close Bancroft Road Reigate Surrey RH2 7RU Tel: Fax: (Lines are open Monday Friday 8:30am to 5:30pm, local call rates apply) Departmental support@justretirement.com Customer support customer@justretirement.com 7

8 For more information contact: Telephone: Lines are open Monday to Friday, 8.30am to 5.30pm. us: Or log onto our website for further information: Just Retirement Limited. Registered Office: Vale House, Roebuck Close, Bancroft Road, Reigate, Surrey RH2 7RU. Registered in England Number Just Retirement Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Please note your call may be monitored and recorded, and call charges may apply. Please contact us if you would like this document in an alternative format. All copyright works and trade marks are owned by their respective proprietors /2015