RETIREMENT TIMETABLE. With effect from 6 April 2015, changes to pensions law gives people greater freedom over how they access their pension savings.

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1 RETIREMENT TIMETABLE abcdef Important Note: With effect from 6 April 2015, changes to pensions law gives people greater freedom over how they access their pension savings. Everyone retiring from 6 April 2015 with a defined contribution pension scheme will be offered free and impartial guidance. We strongly recommend you take advantage of this guidance service to help you understand your retirement options. The service is called Pension Wise, however not all of the contact details have been finalised by the Government yet. When we receive the contact details we will update the Pension Wise section of our website. Pension Wise will give you: Tailored guidance on how you can take your pension savings. An appointment with a pensions expert (either face to face or over the telephone) to explain what options you have. Information on how much tax you will pay. Tips on shopping around for the best deal. The Pension Wise guidance will be provided by: The Pensions Advisory Service (TPAS) over the telephone. The Citizens Advice Bureau (CAB) by face to face appointments. HM Treasury via online guidance. We recommend you register your interest for early access to the service. Go to to find out about free guidance from the government. Pension Wise will provide you with guidance only. If you feel you need further help, you should seek advice from a financial adviser. Abbey Life cannot give and is not authorised to give you any financial Nearing retirement Each year we send you an annual statement on your policy anniversary. Although it seems like a long time, it is sensible to consider your retirement options and requirements at least 5 years before your selected retirement date. If your policy allows it, 63 months before your selected retirement date, we will send you an option to begin a gradual transfer of your funds into the Abbey Life Pensions Security Fund which is a lower risk fund. This is known as Phased Switching and it is designed to help protect your fund against any potential falls in the stock market, although you should consider if this is right for your financial circumstances. A fraction of the units in the fund(s) will be switched without charge each month commencing 60 months prior to the retirement date. The fraction switched will be determined as one over the remaining term in months to the relevant date with 1/60 th switched in the first month, 1/59 th in the second month and so on until the entire fund has been switched by the relevant date. Page 1 of 7

2 Contributions received after the transfer process has begun will continue to be allocated according to your original investment choice. The transfer of units from the original funds to low risk funds will not apply to units already invested in low risk fund(s) for which Abbey Life considers it unnecessary, for example the Protected Growth Fund. This investment strategy can have a major impact on your investment fund. As retirement approaches, the fund is likely to be at its largest and small percentage variations will make a significant difference. Transferring into a lower risk fund too early can limit potential growth. However, using this strategy can ensure that gains made from higher risk funds are locked in consolidating the fund at a time when any losses incurred would be hard to make up. In the same way any losses incurred in recent years would also be locked in. Switching into lower risk funds in preparation for buying an annuity may also limit your options at retirement. Alternatives, such as keeping your fund invested in growth assets into retirement whilst taking an income via drawdown, may be more suitable. If you have not already done so and if you feel that you need help, speak with a financial adviser to consider your options and retirement plans. Abbey Life cannot provide you with any financial When you are nearer your selected retirement age, or are thinking of retiring, you might start considering the points below. Six months before your Selected Retirement Date Six months before your Selected Retirement Date we will send you a pre-retirement information pack. At this point, if you have not already, you may want to start considering your retirement options. Your preretirement pack will include a number of quotations which will show the retirement benefit options available to you. Options Defer taking your benefits to a later age (up to age 75 with Abbey Life). Small Lump sum (Commutation) Payment depending on the size of the retirement fund and other eligibility criteria you may be able to take the entire retirement fund as a lump sum (part of which is taxable). Flexible Access Payments you can take your whole fund as a cash lump sum. This is called an Uncrystallised Funds Pension Lump Sum. This is usually made up of a 25% tax free lump sum with the remaining 75% subject to income tax. A Tax-free lump sum Up to 25% of your retirement fund can be taken tax free. If you are in an occupational pension scheme you may be able to take more than 25%. An Abbey Life Annuity an income based on Abbey Life s annuity rates. Shopping around/open Market Option an amount which can be used to buy an annuity with another pension provider. Transfer Value an amount to transfer to another pension plan with another provider. Quotations Included These quotations will also show you a few different Abbey Life annuity options as follows: payments remaining level; Page 2 of 7

3 Page 3 of 7 abcdef payments escalating at 5% per year; years and lifetime thereafter, with payments remaining level; and years and lifetime thereafter, with payments escalating at 5% per year. The Open Market Option and the Transfer Value amounts that could be available for you will also be provided so you can purchase a retirement annuity product with another pension provider. You can use these when you shop around to see what an Abbey Life annuity might give you compared to other providers, and also what other types of annuity options different providers can give based on your own circumstances and requirements. By shopping around, you could get a higher retirement income; this is not always the case but it is always worth checking before you buy. If you have a health problem or your lifestyle may shorten your life, you may be able to buy an annuity that pays more than a standard annuity product. These are known as enhanced or impaired annuities. Abbey Life does not offer this type of annuity; therefore you would need to buy this from another provider. Your pre-retirement information pack will confirm whether your policy includes a Guaranteed Minimum Annuity Rate. If it does, this will be included in the quotations. This is a valuable feature since it often means you would get a higher income from us than you would from another pension company. If you are not ready to retire and are under the age of 75, you also have the option to defer taking your retirement benefits until a later date. Your pre-retirement information pack will include details on how to do this. Nine weeks before your Selected Retirement Date If you have not already done so and if you feel that you need help, speak with a financial adviser to consider your options and retirement plans. Abbey Life cannot provide you with any financial Unless you have told us that you wish to defer taking your benefits, nine weeks before your retirement date we will send you your retirement pack. This will include more detailed information regarding your retirement options. It will also contain up to date quotations. Options Defer taking your benefits to a later age (up to age 75 with Abbey Life). Small Lump sum (Commutation) Payment depending on the size of the retirement fund and other eligibility criteria you may be able to take the entire retirement fund as a lump sum (part of which is taxable). Flexible Access Payments you can take your whole fund as a cash lump sum. This is called an Uncrystallised Funds Pension Lump Sum. This is usually made up of a 25% tax free lump sum with the remaining 75% subject to income tax. A Tax-free lump sum Up to 25% of your retirement fund can be taken tax free. If you are in an occupational pension scheme you may be able to take more than 25%. An Abbey Life Annuity an income based on Abbey Life s annuity rates. Shopping around/open Market Option an amount which can be used to buy an annuity with another pension provider. Transfer Value an amount to transfer to another pension plan with another provider.

4 Quotations Included These quotations will also show you a few different Abbey Life annuity options as follows: payments remaining level; payments escalating at 5% per year; years and lifetime thereafter, with payments remaining level; and years and lifetime thereafter, with payments escalating at 5% per year. The Open Market Option and the Transfer Value amounts that could be available for you will also be provided, so you can purchase a retirement annuity product with another pension provider. You can use these when you shop around the Open Market to see what an Abbey Life annuity might give you compared to other providers, and also what other types of annuity options different providers can give based on your own circumstances and requirements. By shopping around, you could get a higher retirement income; this is not always the case but it is always worth checking before you buy. If you have a health problem or your lifestyle may shorten your life, you may be able to buy an annuity that pays more than a standard annuity product. These are known as enhanced or impaired annuities. Abbey Life does not offer this type of annuity; therefore you would need to buy this from another provider. Your retirement pack will confirm whether your policy includes a Guaranteed Minimum Annuity Rate. If it does, this will be included in the quotations. This is a valuable feature since it often means you would get a higher income from us than you would from another pension company. If you are not ready to retire and are under the age of 75, you also have the option to defer taking your retirement benefits until a later date. Your pre-retirement information pack will include details on how to do this. The retirement pack will also contain instructions to enable you to take any of the available options. By now you will probably have a reasonable idea of what your options are and the type of annuity you need, for example a joint life annuity. Make sure you look at a number of different annuity scenarios and the affects different choices might have on the level of income you will receive. This will allow you to see clearly what your options are and how much you could get, both today and in future years. The Open Market Option and Transfer Values allow you to shop around and choose the pension provider from which to purchase your retirement income product. Annuity rates can vary considerably between providers; and a provider s rates can differ according to the annuity options you choose. The top provider for one set of options may not come out on top for another set. You may therefore want to seek guidance from a financial adviser who can assist you in looking at the options available to you. What to do next If you want to take the Open Market Option or a Transfer Value, speak to your preferred provider to establish their requirements and call our Client Line on for the relevant forms. Page 4 of 7

5 If you are interested in an Abbey Life Annuity, call our Client Line on and ask for a quotation on the basis you require, for example an annuity that pays you monthly, that includes your partner and that is guaranteed for a certain period of time. This quotation will tell you what you can expect to receive and the forms required to be completed to do this. If you have chosen to buy an Abbey Life Annuity, you will have a period of time during which you can change your mind, a cancellation period. A cancellation notice will be sent with your quotation and annuity application. The cancellation notice explains that you have 37 days during which you can change your mind, which includes a 30 day period of reflection plus a further 7 days to allow for any postal delays. We cannot start to pay your annuity until this period has ended. This period may extend beyond your Selected Retirement Date and cannot be overridden. Each retirement quotation and annuity application form will be accompanied by a new cancellation notice. You'll need to consider your options carefully as you cannot change your annuity once it has been purchased. Once you make a decision to buy an annuity it normally takes a few weeks for your retirement fund to be converted into an income and for you to receive your first payment. If you want to take your full fund as an Uncrystallised Funds Pension Lump Sum, call our Client Line on for a quotation and application form. Six weeks before your Selected Retirement Date If you have not already done so and if you feel that you need help, speak with a financial adviser to consider your options and retirement plans. Abbey Life cannot provide you with any financial No Reply Received: If we have not received your full instructions and the correctly completed required paperwork 6 weeks before your selected retirement date we will send you a retirement reminder letter detailing what will happen if we have not received your instructions or our full correctly completed requirements by your retirement date. Reply Received: If you have chosen to take the benefits with Abbey Life and all necessary requirements have been received and correctly completed before the selected retirement date and the 37 day cancellation period has ended: Any tax-free lump sum, if applicable, will be paid no later than 2 weeks after the selected retirement date. Confirmation of your benefits will be issued no later than 2 weeks after your selected retirement date. Confirmation will include an explanation of how your benefits will be taxed. If you have chosen to take the benefits with another provider and all necessary requirements have been received before your selected retirement date we will aim to send the Open Market Option/Transfer Value to your chosen provider no later than 2 weeks after your retirement date. Page 5 of 7

6 One day after your Selected Retirement Date (We will wait until the next business day (excluding bank holidays and week-ends) so that we can use the unit prices at the close of business on your Retirement Date) If you have chosen to take the benefits with Abbey Life, either as an annuity, as an Uncrystallised Funds Pension Lump Sum or as a small lump sum payment, and all necessary requirements have been received and completed correctly before the selected retirement date, we will begin to process your retirement instructions. What happens if you DO NOT contact us, or have not returned your Retirement Choice? If you have not already done so and if you feel that you need help, speak with Pension Wise and / or a financial adviser to consider your options and retirement plans. Abbey Life cannot provide you with any financial If we have not received a reply or the correct and completed requirements by your selected retirement date, depending on your plan s original terms and conditions, your entire retirement fund will either: 1. Be used to buy an Abbey Life annuity for you (known as Contractually Vesting). Warning: If your policy is contractually vested it would mean that we will use your whole retirement fund to set up an annuity using the default Abbey Life annuity basis, which is a single life basis annuity, payable monthly in advance with a 5 year guaranteed period. Or If your policy is contractually vested, you would lose the options listed below: the ability to elect to defer the payment of the benefits to a later age the ability to take a small retirement fund as cash the ability to take flexible access payments the ability to elect to take a tax-free lump sum the ability to elect to choose the frequency and type of annuity the ability to elect to buy an annuity from another provider/company (Open Market Option) the ability to transfer their benefits to another provider/company 2. Be contractually deferred until age 70 or 75 as described in your Retirement Pack. Help with Shopping Around/the Open Market Option There are a number of websites that can help you with shopping around, general advice and finding a financial adviser. A few examples are: Page 6 of 7

7 PENSION WISE abcdef Pension Wise is a new government service that will offer you: Tailored guidance (online, over the telephone or face to face) to explain what options you have and help you think about how to make the best use of your pension savings; Information about the tax implications of different options and other important things you should think about; and tips on getting the best deal, including how to shop around. In your retirement pack you ll find important details about your pension. Use them and Pension Wise to help you make the decision that s right for you. If you feel you need further help, you should seek advice from a financial adviser. Abbey Life cannot give and is not authorised to give you any financial Early Retirement You do not have to wait until the retirement date that you originally chose at the start of your pension plan. If you want to take your retirement benefits now and are 55 or older then please contact us for an early retirement pack. If you are in serious ill health, or are unable to work due to incapacity, then you might be able to take your benefits before age 55. If you are in ill health then we recommend that you seek financial advice on the options available to you. All our literature is available in large print, Braille and on audio tape or CD. RET/Timetable (08/2015) Abbey Life Assurance Company Limited Registered in England Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered Office: Winchester House 1 Great Winchester Street London EC2N 2DB For quality control and training purposes telephone calls may be recorded and randomly monitored. Page 7 of 7