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Group Personal PensionThe Skandia Group Personal Pension is a group of individual Personal Pensions that an employer can set up for employees. Who can take out a personal pension?Any UK resident, subject to our age limits and scheme criteria. Minimum and maximum agesThe minimum age is 16 years and the maximum is 72 years. Minimum contributionsThe average member contribution is £150 monthly. Total scheme contribution £10,000 monthly. Maximum contributionsSkandia will only accept personal contributions that qualify for tax relief. This means you can personally contribute up to £3,600 gross each year into a Personal Pension Plan regardless of your earnings. If your UK earnings chargeable to UK income tax exceed £3,600 you can pay personal contributions each year up to 100% of these earnings. Your employer can also make contributions into your Group Personal Pension Plan. The Annual Allowance is the maximum amount that you can build up in all registered pension schemes before you become liable for tax. If your earnings are greater than the Annual Allowance you may still contribute 100% of your earnings and receive full tax relief, however any contributions exceeding the Annual Allowance will be subject to a tax charge. The Annual Allowance has been set for the tax years shown as follows: 2008/09 – £235,000 If the total amount built up in all your registered pension schemes exceeds the Annual Allowance you will be personally liable to a tax charge of 40% on the excess amount. Your financial adviser will be able to provide you with more information. TermThe minimum term is two years. Benefits must be taken by age 75. All payments into the plan must cease by age 75. AdvantagesTax efficiencyThere are a number of reasons why a personal pension can be a tax-efficient way of saving. These include:
There may be a tax liability in some circumstances, for example where:
FlexibilityThe Plan can accept regular contributions and single contributions and, in conjunction with these, can be used to contract out of the State Second Pension (S2P). S2P normally only applies to employed individuals and is in addition to the basic state pension. By contracting out you give up your future S2P entitlement and in return the National Insurance Contributions Office rebates some of your National Insurance contribution into your pension plan to help you build up a replacement. If you have benefits in other UK-registered pension schemes, these can also be transferred into the Plan. You’ll need to contact your previous product provider for details on any charges that you may incur. Regular contributions can be stopped, reduced or increased at any time without incurring extra costs or penalties. Previous versions of the Skandia personal pension contract may also incur penalties. If your employment status changes, you may be able to continue with your plan or switch to another Skandia pension product. Your Member’s Guide will provide you with more details. Inflation-proofWe have options which allow you to increase your contributions each year to keep pace with inflation. Flexible benefit optionsSkandia offers you a number of ways to use your fund to provide benefits at your pension age. Normally, 25% of your fund value used to provide benefits can be taken as a tax-free cash sum and with the remainder of the fund you can:
Death benefitIf you die before taking your pension benefits, we will normally pay out 100% of your fund value. This is paid at the discretion of the Scheme Administrator, Skandia Life Assurance Company Limited, so you should tell them who you would like to receive the benefits. If your fund includes Protected Rights, however, that element must be used to provide a pension income for your spouse or civil partner. If you outlive your spouse or civil partner, the Protected Rights fund can be paid as a lump sum to a person named by you, or to your estate if you have not named anyone. If you have a Safeguarded Rights fund, it can be paid as a lump sum to a person named by you, or to your estate if you have not named anyone. Cash sums paid to a nominated beneficiary on death will normally be free from inheritance tax. Regular reviewsEach year Skandia will send you a statement showing the current value of your pension fund and your projected benefits at your pension date. Your projected figures will include an estimate of what your pension could be worth in today’s terms, to illustrate the effect of inflation. If you wish, your annual statement can also include details of your State Pension entitlement. Additional facilitiesLifestyle OptionThis option enables you to protect any investment gains, and reduce the impact of stock market fluctuations. Five or ten years (whichever your Group Personal Pension Scheme chooses) before your Selected Pension Age, we gradually switch your pension fund automatically into funds which carry less risk, such as those that invest in gilts and cash. When you join an employer’s scheme, your employer will be able to tell you whether this option is available to you and provide you with more information. GroupViewGroupView is Skandia’s efficient online administration system. You can register online to view details such as your fund value, switch funds online and change your fund choice for future contributions. RisksYou need to be aware that there are risks involved in taking out a personal pension and we cannot guarantee the value of your pension fund and resulting benefits for a number of reasons. Some of these are detailed below:
This web page is only intended as a general introduction to the Skandia Group Personal Pension. Full details of the product can be found in the Skandia Group Personal Pension Member’s Guide, available from your financial adviser. |
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Information on this website is not intended for Hong Kong residents. Information on this website about Skandia Group Companies is intended for UK residents only, unless it relates to Royal Skandia, Skandia Life Norge or Suomen Sivuliike. Skandia Group companies do not offer investment advice and no information on this website should be construed as such.
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