Flexible Retirement Plan
As the name suggests, the Flexible Retirement Plan offers a wide range of solutions to meet your changing needs.
It is designed to help you save towards your retirement in a tax efficient way and, with average life expectancy increasing, it could help in funding the lifestyle you want in retirement.
- Contributions to a Flexible Retirement Plan qualify for tax relief.
- Access to a wide range of investments.
- Access to the Self-Invested Personal Pension (SIPP) option and the flexi-access drawdown option
Risks and considerations
- This product is only available through a financial adviser.
- The value of any investment can go down as well as up and so you may not get back what you put in.
- Tax relief will depend on your individual circumstances and is subject to change in the future.
There are various reasons why you could consider saving into a Flexible Retirement Plan. For example:
- You can make flexible payments - regular or one-off payments or a combination of both. Invest a minimum of £100 each month or a £5,000 initial contribution.
- There is a wide range of investments to choose from - you'll have access to our:
- Core multi-asset funds, including With-Profits and PruFund, with guarantees available.
- PruSelect range, chosen by independent research company, Morningstar OBSR.
- Five Dynamic Portfolios targeting different levels of risk and potential return and our unique combination of experts - Prudential's Portfolio Management Group for asset allocation and Morningstar OBSR for fund selection and recommendation.
- There is also a lifestyle option to help you manage risk by automatically switching into funds with lower risk profiles as you approach your selected retirement age.
- Tax relief - your contributions are paid into your plan after your income has already been taxed. Subject to HM Revenue & Customs (HMRC) limits, for every £80 you invest in your pension, the government will pay an extra £20 tax relief. If you earn above the basic rate of tax, you can claim additional tax relief through your tax self-assessment form.
- If you are a Scottish Rate tax payer, your personal allowance is the same as the rest of the UK as well as your rate of income tax. However, the amount you can earn before paying higher rate tax will be £31,500 (totalling £43,000 which includes the £11,500 personal allowance) compared to £33,500 in the rest of the UK (totaling £45,000 which includes the £11,500 personal allowance). For more details on the Scottish Rate of Income Tax, please visit www.gov.uk/scottish-rate-income-tax
- Self-Invested Personal Pension options - if you invest in our SIPP options you have an even greater choice of investments through our SIPP fund range. You can choose funds through the Cofunds supermarket with our lower cost Fund SIPP (up to 20 funds) or the full range of investments through the Full SIPP. The SIPP option can be switched on or off at any time so you pay only for what you use.
- Flexi-access Drawdown option - this lets you take an income from your pension fund from age 55 as and when you want to. You can also choose how the rest of your fund remains invested.
Pensions and tax
Paying into a pension plan attracts tax relief (which is restricted), this is known as the annual allowance. You usually pay tax if savings in your pension plan go above the annual allowance. When you're ready to take your pension benefits, if all of your benefits exceed a lifetime allowance you may be subject to a tax charge. You may also have to pay tax when you start taking an income from your pension.
Understanding all of the tax rules can be very complicated so we’ve prepared a guide to show how this may affect you. Our Questions & Answers document provides information such as:
• Tax relief on pension contributions and the limits
• Annual Allowance
• Tapered Annual Allowance
• Money Purchase Annual Allowance
• Lifetime Allowance
• Pensions Protection
You can also get more information on the gov.uk website by visiting www.gov.uk/tax-on-your-private-pension.
Choice of how to take your benefits
If you are age 55 or over, you can take up to 25% of your pension savings as tax-free cash and there are three main options for how you draw the rest of your pension savings. They can also be used in combination.
- Flexi-access drawdown - you can take an income as and when you want it while the rest remains invested.
- An annuity - this guarantees to pay a secure income for the rest of your life, regardless of how long you live.
- Cash option - You could take your pension pot as cash, either in one lump sum or as a series of smaller lump sums over a period of time.
To learn more about the Flexible Retirement Plan please see the following:
- Flexible Retirement Plan/Self-Invested Personal Pension Key Features
- Flexible Retirement Plan Transfer Key Features
- PruFund Range of Funds: Guarantee Options
- Full Fund Guide
- Investment Alteration Form
- Flexible Retirement Plan Personal Pension Technical Guide
- Flexible Retirement Plan Client Brochure - A guide to your Flexible Retirement Plan
Are you an existing customer?
If you are an existing customer please visit our dedicated Flexible Retirement Plan page in the customer section of our website.
Advice from The Man from the Pru
Meet with a Prudential financial adviser in your area. We can review your retirement plans, advise on where to save your money and help make your finances more tax efficient. We can recommend options for you from a range of carefully selected products from Prudential and other providers.Meet with The Man from the Pru
A specialist product that allows more flexibility over where your money is invested. These pensions suit people who want to make their own investment decisions and are comfortable with taking on the higher associated risk.
The UK government encourages you to save for your retirement by giving you tax relief on pension contributions. Tax relief works by reducing your tax bill or increasing your pension fund.
We are not recommending one product over another. We recommend you seek financial advice if you’re unsure about what product could be right for you. The information above is based on our understanding of current taxation, legislation and HM Revenue & Customs practice, all of which is liable to change without notice. For more information please visit www.hmrc.co.uk.