Royal London is the UK’s largest mutual life and pensions company, providing award-winning products and services which allow customers to save for the future, purchase protection, and invest with confidence and clarity.

Royal London is a proud mutual and exists for members to benefit from its services.

In the event of your death before you have drawn any benefits from your plan, the full value will be paid to your dependants or other nominated beneficiaries.

The notional retirement age for the scheme is 65 but, under current legislation, you may take all or part of your benefits at any time from the age of 55. This minimum age will rise to 57 from 2028. No contractual penalties will be applied if you take your benefits early. You will have paid contributions for a shorter time and your fund will have had less time to grow.

Your pension will, therefore, be lower than you would expect to receive if you invested for longer. You may take up to 25% of your accumulated fund as a tax-free lump sum. The balance of your fund can be used to provide an income; Income may be provided by purchasing an annuity (a guaranteed income for life). The annuity can be level or increasing in payment and you may include a spouse’s pension if required. The annuity may also be guaranteed for up to 30 years even if you were to die within that period.

The annuity may be purchased from any company. It pays to shop around as rates vary considerably. As an alternative to an annuity you may leave your pension fund invested (net of any tax-free lump sum) and draw an income directly from your funds. This is known as Income Drawdown. You can also withdraw the entire residual fund, but care should be taken as this would be taxable. It is strongly recommended that you seek independent financial advice when considering your options at retirement.

No initial charges apply to your plan. All contributions are invested without deduction in the default investment fund or fund(s) of your choice. No penalties will apply if benefits are transferred away in the future.  The annual management charge in the default fund is only 0.75%. Additional charges will also apply to some internal and external funds if they have been selected.

In order to provide a balanced spread of investments, all contributions will be invested 100% into the scheme’s default profile.

The default profile offers investment into a diversified range of UK and International Equities, Fixed Interest Securities, Commercial Property, and Cash. In the lead up to the Scheme retirement date (age 65) the fund is progressively switched into more cautious funds to reduce possible fluctuations in fund value as retirement approaches. This is known as “lifestyling”.

If you do not wish to invest in the default fund you may select your own investment portfolio from the wide range of funds available.

Learning Unlimited will contribute 4% of your basic pay as long as you contribute a minimum of 5% of your basic pay.

Salary Exchange, which is also known as Salary Sacrifice, is an agreement between Employer and Employee to give up an amount of pay in return for another benefit – in this case, a pension contribution.

When receiving pay/salary (as a basic rate taxpayer), much of your pay suffers tax (currently 20%) and Employee National Insurance (currently 8%). This means that you ‘lose’ 28% of your gross pay before receiving it as net/take-home pay.

By agreeing to give up an amount of pay/salary, no tax or Employee National Insurance is payable… because it hasn’t been paid to you.

This can best be shown by way of an example:

In this example, if you agree to ‘give up’ £100.00 of gross pay, your employer would pay the full £100.00 into your pension.  Your employer will also pass onto you their saved Employer National Insurance contribution of 13.8%.

Meaning that for a net cost of £72.00, £113.80 is paid into your pension (as opposed to £90.00 by conventional funding).

Note: Different figures apply to higher rate taxpayers. If applicable, please contact us so that we can provide calculations based on your circumstances.

If you would like more details or to take up salary exchange, please contact us.