Prudential Retirement Account
The Prudential Retirement Account is a flexible personal pension that offers you a wide range of investment options.
It allows you to make contributions, invest and transfer money in from other pensions including those already in drawdown. It lets you withdraw lump sums and/or income from the normal minimum pension age. Employers and third parties can also make contributions into this pension.
If you're at the stage where you're looking to take your pension benefits then information on accessing your investments is available on the Pension Income Account page.
- Pension Savings Account that allows you to make single and regular contributions.
- Accept a transfer of an existing pension plan into this Pension Savings Account.
- Access to a wide range of investment options.
- Flexibility on how you take your pension benefits.
Risks and considerations
- The value of your investment can go down as well as up and you may not get back the amount you originally invested.
- The impact of taxation on your contributions depends on your individual circumstances and is subject to change.
- Transferring pensions is an important decision as you may be giving up rights with your existing pension scheme.
- You can currently only apply through a financial adviser.
The Pension Savings Account is one part of the Retirement Account that allows you to contribute towards your retirement using a wide range of investments.
Are you eligible?
As long as you're a UK resident, you can take out this product. In addition, you can also open one on behalf of children under 18 – perfect for those longer-term financial solutions.
Paying into the Account
Making contributions into the account is easy and flexible:
- You, your employer or a third party can all contribute.
- You can also transfer money from other pensions.
- Contributions can be made by bank transfer, direct debit or cheque.
- Regular payments can be increased, decreased, stopped and re-started at any time.
Transferring pensions is an important decision as you may be giving up rights with your existing pension scheme. Please speak to your adviser if you're looking at this option.
The cash account
Contributions into your Pension Savings Account go through the cash account prior to investment. In addition, any income payments, non-PruFund product charges and adviser charges are paid from the cash account. Further information on this is available in the key features document.
The Retirement Account terms and conditions explain that we will invest your contributions, as instructed by you, on the dates we treat your contributions as received. The date we treat your contributions as received are the dates we invest your money in the trustee cash account.
For single and transfer contributions, we will make the investment within 3 business days of receiving the contributions.
For regular contributions, we will make the investment within 6 business days of receiving the contributions (to allow time for funds to clear through the banking system).
Rate of interest for the cash account
If we receive interest on the amount in your cash account, we will normally add the interest paid by the bank to your cash account monthly in arrears on the 10th of each month. The current rate of interest for the scheme bank is 0.07% below the Bank of England Base Rate, giving a current rate of 0.18% AER.
Tax relief limits
You can get tax relief on every penny you contribute, up to 100% of your annual earnings, with an upper limit of £40,000 (known as your annual allowance) in 2016/17. The government limits the amount that can be paid each year, to all your pensions, before incurring a tax charge. If you exceed this 'annual allowance' you may be liable to a tax charge and must tell HMRC through a tax return.
From the 2016/17 tax year, if your income exceeds certain thresholds in any tax year your annual allowance for pension savings in that tax year will be reduced – this is known as tapered annual allowance.
If you have flexibly accessed pension benefits on or after 6th April 2015 then your tax relief limits will be reduced to £10,000. This is known as the Money Purchase Annual Allowance.
This is a complicated subject and you may wish to speak to a financial adviser or further information may be obtained from HMRC.
What happens once you reach retirement age?
Investments from your Pension Savings Account can be moved into the Pension Income Account and you can then use some or all of the value of your savings to take benefits. Prior to moving investments into the Pension Income Account, you also have the option to take Uncrystallised Funds Pension Lump Sums (UFPLS). Information on taking your benefits is available on the Pension Income Account page or see the key features document.
You have access to a wide range of external funds and fund managers alongside access to Prudential’s Multi-Asset fund range for your Retirement Account. Information on the funds available and what you need to consider is shown in the following documents or see the Investment fund range section.
PruFund range of funds
These are with-profit investments which spread your money across a range of asset types. Importantly, they also have a smoothing process designed to protect investors against some of the extreme ups and downs of short-term investment performance associated with the underlying assets. You can see the expected growth rates for current and historical periods on our PruFund range of funds webpage which also explains our smoothing process.
CF Prudential Dynamic Portfolios
These are Funds of Funds that use the investment expertise of Fidelity, M&G, Artemis and Invesco to obtain exposure to a diversified portfolio of assets. There are a range of Dynamic Portfolios to suit different attitudes and you can read more about these funds available in the Investment fund range section.
CF Prudential Dynamic Focused Portfolios
There are five well-diversified Dynamic Focused Portfolios that each offer a different proportion of higher and lower risk assets to meet the needs of customers with different attitudes to risk. You can read more about these funds in the Investment fund range section.
You also have access to hundreds of collective investment funds from a wide variety of fund management groups. This allows you not only to choose funds with different managers but to choose funds that are managed in different ways. You can read more on this in the A Guide to the Prudential Retirement Account - Saving into your Pension.
Investment options through Stocktrade
For even wider investment choice we also offer you direct access to stock exchange investment options through Stocktrade who are stockbrokers that will buy and sell investments on your behalf. These investments include UK stocks and shares, investment trusts and exchange traded investments.
If you choose to invest through Stocktrade, then the following charges will apply:
Commission Registered telephone per trade
Commission Registered internet per trade
Nominee charges of £10 per quarter (payable January, April, July and October) will also apply. There is no charge for transfer in of UK stocks, but a £15 stock transfer out charge will apply. More detailed information can be found in our charges leaflet.
Your adviser can explain the fund options to you and what to consider. The value of your investment can go down as well as up and you may not get back the amount you originally invested.
You can only apply for the Retirement Account through your financial adviser. They can also provide more information and help you decide how much to contribute and where to invest your contributions.
Before you decide whether this product is right for you, please read the following documents as they explain the Retirement Account in detail and the options you need to consider.
A Guide to the Prudential Retirement Account - Saving into your Pension
A Guide to the Prudential Retirement Account - Flexi-Access Drawdown
Key Features of the Prudential Retirement Account
Terms and Conditions of the Prudential Retirement Account
Your With-Profits Plan – a guide to how we manage the Fund
Taking Your Pension Benefits
Guarantees available on PruFund investments in the Prudential Retirement Account
PruFunds Fund Guide - Prudential Retirement Account
Auto-increases to regular contributions
Regular contributions made by you, your employer and/or a third party can automatically increase every year. This is called indexation. The rate at which the amounts increase will be in line with the consumer price index or a fixed rate of your choice.
Escalation of payments from your retirement account
If you have asked for a regular payment to be a fixed monetary amount, you may choose for this to increase every year. You must do this through your adviser annually.
From time to time, changes can occur on funds you invest in – for example, changes to charges, fund mergers or changes in objectives. These are called “fund events”. If there are any changes to funds we will contact you.
If you have a query about the Retirement Account, please speak to your adviser first. You can also contact us on 0345 268 0488 (Mon-Fri 8.30am-6pm, calls may be recorded for security and quality purposes) and our customer services team will be happy to help.
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.