RETIREMENT ACCOUNT

ONE PENSION PLAN FOR LIFE

ADVISER TECHNICAL GUIDE
This information is for UK financial adviser use only
and should not be distributed to or relied upon by any other person.
 Retirement Account

PAGE 4 PAGE 20

RETIREMENT ACCOUNT – OVERVIEW ADVISER REMUNERATION

PAGE 6 PAGE 24

INVESTMENT OPTIONS CHANGE TO ADVISER

PAGE 10 REMUNERATION BASIS
PAYMENTS – RETIREMENT PLANNING PAGE 25

PAGE 12 CONTROL ACCOUNT

PENSION ENCASHMENTS – PAGE 27

RETIREMENT PLANNING TRADING

PAGE 13 PAGE 28

PAYMENTS – RETIREMENT INCOME DEATH BENEFITS

PAGE 14 PAGE 29

INCOME DRAWDOWN COOLING OFF

RETIREMENT INCOME
PAGE 30
PAGE 15 ONLINE FUNCTIONALITY
INCOME DRAWDOWN PAGE 31
DRIP FEED DRAWDOWN
GLOSSARY
PAGE 16

CLEAR, COMPETITIVE CHARGES

SERVICE CHARGE
INVESTMENT CHARGES

For guaranteed help and support, contact our dedicated Retirement Account IFA servicing team

0800 096 4364

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Retirement Account
Retirement Account

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 Retirement Account
Retirement Account

CHOOSING RETIREMENT ACCOUNT

HELPING YOU MEET YOUR CLIENTS’ NEEDS TO AND
THROUGH RETIREMENT, WITH A WIDE RANGE OF INVESTMENT
OPTIONS FOR BOTH RETIREMENT PLANNING AND INCOME.

Retirement has changed – it doesn’t RETIREMENT ACCOUNT

necessarily mean stopping work, and can
bring the opportunity to do new things.
Rules around pensions have also changed
and now that clients have greater freedom
and flexibility with their retirement
savings, they need a pension product
that lets them make the most of this.
Here’s why Retirement Account is the
right choice for you and your clients.
RETIREMENT ACCOUNT
FOR ADVISERS
• A wide range of investment
options with robust governance –
investment solutions for a variety
of clients and competitively priced
core portfolio funds
• Clear and competitive charges –
that are easy to explain to your clients
and can help you provide a full advice
model at low cost
• We’re easy to do business with –
our online services and offline support
means you can get on with advising
your clients
• One plan flexibility – plans change,
which is why Retirement Account
offers ultimate flexibility for you
and your clients
• Experience and expertise –
with over 200 years’ experience,
you can rely on us
FOR YOUR CLIENTS
Flexible options for retirement saving
• Your clients can access our wide
range of investment choices, including
Governed Investment Strategies and
Pension Portfolios, as well as shares
and commercial property.
• From age 55, they can partially or
fully encash, or move seamlessly
into Retirement Income and take
flexible drawdown.
Flexible options for retirement income
Gives your clients full pension freedom
flexibility in how they take their money
– as much as they like, when they like –
keeping the rest invested in our range
of investment options including our
Retirement Portfolio funds, which are
designed to help manage volatility
and make your clients’ pension pots
last longer.
This guide should be read in
conjunction with our other
Retirement Account literature.
If you have any further questions,
please speak to your Scottish Widows
Account Manager, or visit our website –
https://adviser.scottishwidows.co.uk/
products/individualpensions/html

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 Retirement Account

RETIREMENT ACCOUNT – OVERVIEW

RETIREMENT ACCOUNT – SINGLE PLAN

RETIREMENT PLANNING RETIREMENT INCOME

Scottish Widows Fixed Term Discretionary Fund Commercial

Pension Funds Cash Deposits Management Property

Governed Investment Solution Fund Share

Strategies and Funds Supermarket Dealing
Premier Governed
Investment Portfolio Scottish Widows Scottish Widows
Strategies* Management Service Pension and Retirement
Premier Pension Portfolio Funds
Portfolio Funds

CONTROL ACCOUNT CONTROL ACCOUNT

* Governed Investment Strategies and Premier Governed investment Strategies

are available for Retirement Planning only.

A LIFETIME OF FLEXIBILITY • Up to six payers are allowed on a Retirement

Retirement Account is designed to support clients
throughout saving for their retirement AND while
taking benefits.
• It has two distinct elements –
• Basic rate tax relief at 20% is applied immediately
–– Retirement Planning (RP) – holds pension
savings pre-retirement and
–– Retirement Income (RI) – holds pension
savings post-retirement AND allows clients
to take income drawdown.
• It’s easy to designate amounts from the Retirement
Planning element to the Retirement Income element.
• Each element has its own Control Account which
is used to administer the Retirement Account – for
example, certain charges and expenses are taken
from the Control Account(s).
Account:
–– One customer.
–– Two employers.
–– Three others.
to your clients’ payments to the Retirement Planning
element including any payments made on their
behalf by other individuals. Clients who pay more
than 20% tax on some of their income can claim
additional tax relief either by contacting HMRC or via
their self-assessment tax return. Transfer payments
and payments made by an employer won’t receive
basic rate tax relief.

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 Retirement Account

WIDE INVESTMENT CHOICE ENTRY AGES

• The investment range includes:
–– Scottish Widows Pension Funds.
–– Governed Investment Strategies and Premier
Governed Investment Strategies (using
Scottish Widows Pension Funds) – for Retirement
Planning only.
–– Access to a wide range of funds via a
Fund Supermarket.
–– Any Fixed Term Cash Deposits we make available.
–– A panel of Discretionary Fund Managers (DFM).
–– Share Dealing.
–– Commercial Property
–– Portfolio Management Service.
There’s no requirement for a minimum investment in
Scottish Widows Pension Funds.
INCOME DRAWDOWN SOLUTIONS
Income drawdown has become an increasingly popular
retirement option as an alternative to the purchase of an
annuity. It offers clients potential advantages in terms of
value, flexibility and the ability to pass pension savings
on after death, but also carries a number of risks.
The selection of an income drawdown solution requires
care, diligence and guidance. All of this creates an
excellent growth opportunity for your business, and
we believe Scottish Widows is ideally placed to help
you provide retirement income solutions for your
drawdown clients.
Our Retirement Portfolio Funds are designed to manage
significant volatility to help your client’s pension pot
last longer.
• There is no minimum age for Retirement Planning.
• Retirement Income can generally be accessed from
age 55, unless the client is in serious ill-health or has
a protected pension age.
• The maximum age at entry for Retirement Planning
is 74 and 98 for Retirement Income. This must be
at least one full year before your client’s chosen
retirement age.
FLEXIBLE RETIREMENT AGES
Your client must choose a retirement age at the
beginning of the Retirement Account, although this can
be changed at any time.
• The minimum retirement age is normally 55.
• The maximum retirement age your client can
choose is 75 for Retirement Planning and 99 for
Retirement Income.
Please note: Scottish Widows annuities are only
available to buy up to age 75, however, it may be
possible to purchase an annuity after this by
transferring to another provider.
Pensions are a long-term investment. The retirement
benefits clients receive from their pension plan will
depend on a number of factors including the value of
their plan when they decide to take their benefits which
isn’t guaranteed and can go down as well as up. The
value of the plan could fall below the amount(s) paid in.
The value of the tax benefits of a Retirement Account
depend on a client’s circumstances. Tax rules and
circumstances can change in the future.

CLEAR, COMPETITIVE CHARGES

• A simple, unbundled charging structure that
separates the different types of charges, so clients
can see exactly what they’re paying.
• Comprehensive remuneration options designed to suit
your business model and allow choice and flexibility.

WE’RE EASY TO DO BUSINESS WITH

• Our online service offers you access to illustrations
and applications, as well as daily valuations and the
ability to buy, sell and switch most investments. Your
clients can also view their Retirement Account online.

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 Retirement Account

INVESTMENT OPTIONS

TO AND THROUGH RETIREMENT, WE OFFER A RANGE OF INVESTMENT SOLUTIONS FOR YOUR CLIENTS.
INCLUDING OUR CORE PENSION AND RETIREMENT PORTFOLIO FUNDS.

Retirement Account

Retirement Planning Retirement Income

Premier Governed Scottish Widows Pension Portfolio Fund Discretionary

Investment Strategies Pension Funds Funds 0.1%* Supermarket Fund Management

Governed Investment Retirement Portfolio Fixed Term Share Dealing

Strategies Funds 0.2%* Cash Deposit
Commercial
Premier Pension Property
Portfolio Funds 0.4%*
Portfolio Management Service
* Total Annual Fund Charges, correct as at August 2018 and may change in the future.

  Simple personal pension   Personal pension with extended choice   Personal pension with self investment

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 Retirement Account

SCOTTISH WIDOWS PENSION FUNDS

• O
ver 150 funds covering a wide range of asset classes, geographical locations, sectors and
management styles.
• No minimum investment required.
• Currently no charge for switching between our Pension Funds.
• Investments to help your clients achieve their goals, and help your business thrive, including our
multi-asset fund ranges tailored to meet different needs:
–– Pension Portfolio Funds – multi-asset solutions at passive fund prices
–– Premier Pension Portfolios – more asset classes with specialist fund managers, including absolute
return strategies, providing wider choice and diversification.
• Our Premier and original Pension Portfolios are also core components of our Governed and Premier
Governed Investment Strategies lifestyling options.
• Our Governed Investment Strategies gradually move the Retirement Account into lower risk
investments as clients approach their selected retirement date. At five years from this date, the
chosen strategy will automatically adjust so that the Account is invested in one of three ways,
depending on whether clients want to purchase an annuity, keep their funds invested (including
income drawdown), or take a cash lump sum.
• Our Premier Governed Investment Strategies are slightly more expensive but aim to provide better
potential returns for broadly the same level of volatility.
• Governed Investment Strategies and Premier Governed Investment Strategies are available
for Retirement Planning only.
For more details, please see –
• The Retirement Account Scottish Widows Pension Fund Charges (45422)
• Governed Investment Strategy Adviser Guide (49970)
• Premier Lifestyling Options Guide (55117)
• Core Portfolio Funds (56436)

FUND SUPERMARKET
• O
ffers a range of funds from a variety of fund management groups, with different fund services, sizes
and costs.
• Access to approximately 2,900 funds.
• There’s the potential to benefit from lower charges on some funds than if they were to be bought direct.
• No initial charge.
For more details, please see –
• the Retirement Account Fund Supermarket List and Charges (19145)
• Fund Supermarket Investor’s Guide (48432)

Our Portfolio Management Service enables you to construct and store investment portfolios made up from
Scottish Widows Pension Funds and the Fund Supermarket funds, with scheduled rebalancing if required.
For more details, see the Advisers’ Guide to the Portfolio Management Service (24917).

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 Retirement Account

INCOME DRAWDOWN SOLUTIONS

To help you address the challenges of investing for retirement income, our Retirement Portfolio funds
are multi-asset funds which use our innovative Dynamic Volatility Management process to automatically
reduce the risk of capital loss during significantly volatile markets.
We also offer a wide range of other funds.
For more details, please see –
• Retirement Portfolio Funds Adviser Guide (56357)
• Retirement Portfolio Funds Customer Guide (56358)
• Core Portfolio Funds (56436)

FIXED TERM CASH DEPOSIT (SUBJECT TO AVAILABILITY)

• A
ims to provide an alternative to cash funds and may be suitable for those who are risk-averse or
wish to avoid short term market volatility.
• Allows clients to benefit from competitive terms negotiated with deposit-takers.
• Each Fixed Term Cash Deposit will be available for investment during its Offer Period,
at a fixed level of interest, payable at the end of the term.
For more details, please see the Retirement Account Fixed Term Cash Deposit Guide (48856)

DISCRETIONARY FUND MANAGEMENT

• We offer access to a panel of Discretionary Fund Managers, who will construct an investment
portfolio specific to your client’s requirements from a range of permitted investments
–– Brewin Dolphin Securities
–– Brooks Macdonald
–– Cazenove Capital Management
–– Charles Stanley
–– Tilney Investment Management
–– Investec Wealth & Investment
–– Quilter Cheviot
–– Rathbone Investment Management.
• More than one manager can be selected if required.
• Investments are made via a privately managed fund.
For more details, please see the Discretionary Fund Managers Guide to services and charges (25361)

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 Retirement Account

SHARE DEALING
• The share dealing facility allows your clients to invest in securities traded on an HM Revenue &
Customs recognised stock exchange.
• These include –
–– Company shares and bonds
–– Government, public and local authority bonds
–– Exchange traded funds listed on the London Stock Exchange, or on the official list of a competent
authority in another European Economic Area state
–– Investment trusts including Real Estate Investment Trusts.
For more details, please see the Retirement Account Share Dealing Guide (47937)

COMMERCIAL PROPERTY
• Clients can invest in their existing business premises or other property, subject to our approval,
with consolidated valuations available online.
For more details, please see the Retirement Account Commercial Property Administration Guide (22926)

The range of investments available can change.

Where investments are held on deposit, such as a Control Account or Fixed Term Cash Deposit, there is a
possibility that the provider(s) of those deposits may fail to meet their obligations. However, we believe there is
only a small risk that some or all of the value of that investment would be lost.

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 Retirement Account

PAYMENTS – RETIREMENT PLANNING

MINIMUM PAYMENTS (AFTER TAX RELIEF HAS BEEN ADDED) –

NEW RETIREMENT ACCOUNTS
Payment Frequency Monthly Yearly Single Transfer

Minimum Payment
(Gross) £200 £2,400 £10,000 £10,000
• Each minimum applies to the total payments
from all payers who are making payments at the
same time. Please see page 4 for the number of
payers allowed.
• If there is more than one payer, each payer
must pay a minimum of £10 per month, £120 per
year, or £2,000 for single payments and transfers.
For example, if three monthly payments are being
made in respect of one client, each payer must pay at
least £10 and the total of all three payments must be
at least £200.
• Where a single payment and transfer payment are
being made at the same time the minimum payment
is a total of £10,000. Each payment must be at
least £2,000.
For example, if a client wants to make a single
payment and transfer £9,000 from another pension
policy, the minimum single payment would be
£2,000. However, if the transfer payment was less,
e.g. £5,000, then the minimum single payment
would need to be £5,000.

If the minimum for one payment type is met, a client need only meet the additional payment amount for other payment
types. For example, if there is a transfer of £10,000, the client need only pay a regular payment of £50 per month.

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 Retirement Account
ADDITIONAL PAYMENTS (AFTER TAX RELIEF HAS BEEN ADDED) TO EXISTING
RETIREMENT ACCOUNTS
Payment Frequency Monthly Yearly
Minimum Payment
(Gross) £50 £600
Clients can ask us to automatically increase their payments each year – there is no minimum limit for automatic increases
to monthly or yearly payments.
MAXIMUM PAYMENTS
There is no maximum limit on the amount that can be
invested in a Retirement Account. However, limits do
apply to the amount of tax relief that your client can
receive on payments into the Retirement Planning
element. This is the greater of 100% of their relevant UK
earnings or £3,600 (gross) each year.
We will refund payments made by a client, or by another
individual on behalf of a client, which do not qualify for
tax relief.
You should ensure that your clients do not exceed their
Annual Allowance for pension payments in any one year.
(The annual allowance is reduced for higher earners –
this is called the Tapered Annual Allowance).
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Single Transfer
£2,000 £2,000
If your client has taken a pension encashment
(Uncrystallised Funds Pension Lump Sum) from any
pension, or income from Flexible Access Drawdown,
they will be subject to the Money Purchase Annual
Allowance. This means that your client will only be
entitled to obtain tax relief on contributions to all
money purchase pensions up to £4,000, after which
they will be subject to a tax charge.
A Lifetime Allowance, set by the Government, will apply
to the total value of pension benefits that your clients
can receive from all of their pension arrangements.
Tax charges may apply if the Government’s Annual
Allowance, Tapered Annual Allowance, Money Purchase
Annual Allowance or Lifetime Allowance is exceeded.
 Retirement Account

PENSION ENCASHMENTS – RETIREMENT PLANNING

Your client can take one or more pension encashments PAYMENT OF PENSION ENCASHMENTS
(Uncrystallised Funds Pension Lump Sums) from the
Retirement Planning element of their Account, subject Payments are made from the Retirement
to the following conditions: Planning Control Account(s) via BACs.

• normally they must be age 55 or over, and You will need to ensure there is sufficient
balance in each relevant Control Account or
• they must have sufficient Lifetime Allowance.
no payment will be made. Please see ‘Control
Your clients cannot take pension encashments Account(s)’ on page 25 for details.
if they have:
• either primary or enhanced protection with TAX
protected lump sum rights greater than £375,000, or
For all pension encashments, 25% of the value will be
• a lifetime allowance enhancement factor and the tax-free. The remainder of the value will be taxable as
available portion of their lump sum allowance is less income in the tax year of payment. We will deduct tax
than 25% of the proposed encashment. using your client’s PAYE tax code (or the PAYE Emergency
It isn’t possible to give up primary protection but Tax Code if HMRC has not told us your client’s tax code).
your clients can contact HMRC about giving up
The tax deducted may not be the right amount due,
enhanced protection.
when all of your client’s income for the year is taken
into account. After the following 5th April, HMRC will
PENSION ENCASHMENT OPTIONS deal with any additional tax or refund due.
There are two options for taking pension encashments: If your client thinks they have paid too much tax,
Partial Pension Encashment – where part of they can ask HMRC for a tax refund.
the value of the Retirement Planning element
is taken as a cash lump sum;
Full Pension Encashment – where the full
value of the Retirement Planning element
is taken as a cash lump sum.
25% of each encashment will be tax-free (regardless of
whether your client has protected tax-free cash) and the
remainder taxable. Following a full pension encashment
we will close your client’s Retirement Account if there is
no remaining value.
Partial pension encashments must be at least £5,000.

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 Retirement Account

PAYMENTS – RETIREMENT INCOME

MOVING AMOUNTS INTO The £30,000 fund can be made up of:

RETIREMENT INCOME • Funds built up in Retirement Planning, before
Amounts can be moved into Retirement Income by: being moved across to Retirement Income.
• Funds transferred, or single premium contributions
• Designating funds from the Retirement Planning
into Retirement Planning, for partial or full
element(s) of a Retirement Account when required.
immediate vesting to Retirement Income.
• Making a drawdown to drawdown transfer from
For drawdown to drawdown transfers, the minimum
some existing income drawdown arrangements.
payment to Retirement Income is £22,500.
• Drip Feed Drawdown (see page 15).
Single contributions and transfer payments into ADDITIONAL PAYMENTS OR
Retirement Planning can also be immediately vested
DESIGNATIONS TO EXISTING
to Retirement Income
RETIREMENT ACCOUNTS
MINIMUM PAYMENTS – NEW The minimum additional payment into the Retirement
Income element is £2,000 (before any tax-free lump
RETIREMENT ACCOUNTS AND
sum). This allows your client to phase their money into
FIRST DESIGNATION Retirement Income. Even if they end up with a lower
The minimum initial payment from Retirement Planning remaining balance in the Retirement Planning element,
to Retirement Income is £10,000, provided that there they can move the balance into Retirement Income.
is at least £30,000 in the Retirement Planning element
before monies are designated to Retirement Income
(before any tax-free lump sum).

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 Retirement Account
INCOME DRAWDOWN – RETIREMENT INCOME
TAX-FREE LUMP SUM
For designations and immediate vesting, clients can
normally choose to take up to 25% of the value as a tax-
free lump sum. A higher amount may be available if your
client has a protected tax-free cash entitlement.
CONTROL ACCOUNT
Where funds are being designated, there must be
sufficient in the Control Account to cover the tax-free
lump sum and any Initial Adviser Charge.
If there isn’t enough, and your client hasn’t provided us
with a disinvestment instruction, and they are invested
in Scottish Widows Pension Funds, then we’ll disinvest
proportionately from those funds to cover the tax-free
lump sum and any Initial Adviser Charge.
(Your client should also let us know which assets
should be re-registered from Retirement Planning
to Retirement Income to cover the balance of the
designation amount (75%)).
MINIMUM WITHDRAWAL
• No minimum limit – tax-free cash can be taken
and a zero income selected.
• You can ask us to change your client’s level of
income at any time.
INCOME WITHDRAWAL BASIS
• Retirement Income elements set up before 6th April
2015 will be on a ‘Capped Drawdown’ basis and
Retirement Income elements set up on or after
6th April 2015 will be on a ‘Flexible Access
Drawdown’ basis.
• If your client is on Capped Drawdown, they can stay
on this basis or choose to switch to Flexible Access
Drawdown, but will not be able to switch back to
Capped Drawdown at a later date.
• If your client asks to take an income higher than the
maximum allowed under Capped Drawdown, they
will switch to a Flexible Access Drawdown basis, but
will not be able to switch back to Capped Drawdown
at a later date.
• Transfers in on a Capped Drawdown basis can stay
on Capped Drawdown.
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CAPPED DRAWDOWN
• Maximum yearly income limit of 150% of the basis
amount determined by reference to Government
Actuary’s Department (GAD) tables.
• Income limits applicable for three years (or one year
after age 75), or until a review is triggered if earlier.
Certain events, such as an additional designation or
an annuity purchase, will trigger a recalculation of
the basis amount.
FLEXIBLE ACCESS DRAWDOWN
• There is no restriction on the amount that your
client can withdraw as income each year, up to the
full value of the Retirement Income element of
their Account.
• Income can be set up either as a percentage of fund
value or as a fixed monetary amount.
• If income is based on a percentage of the fund value,
the monetary amount quoted will only be valid until
the next anniversary of the date the Income element
of the Account was set up. At this point it will be
recalculated on the Retirement Income fund value
at that time, so the amount could change.
• If the Retirement Income element of your client’s
Retirement Account reduces to zero (and there is
no remaining value in Retirement Planning and no
regular contributions are being paid), we will close
the Account.
The value of the Retirement Income element of the
Account will change:
• each time an amount is moved into the Retirement
Income element
• when an amount is used to buy an annuity
• when income is taken
• as the value of investments rise and fall
• when charges are deducted.
PAYMENT OF INCOME
• Income can be paid on a monthly, quarterly,
half-yearly or yearly basis. Ad hoc payments
can also be made. The frequency and amount of
income payments can be varied at any time.
• Payments are made from the Retirement Income
Control Account(s) via BACS, net of tax using PAYE.
• There must be sufficient balance in each relevant
Control Account or sufficient units in Scottish Widows
Pension Funds to cover the income payments due.
If not, a partial payment or no payment will be made.
See ‘Control Account(s)’ section on page 25 for
more details.
 Retirement Account
INCOME DRAWDOWN – DRIP FEED DRAWDOWN
In addition to ad hoc designations, we also offer
Drip Feed Drawdown, an automated phased drawdown
option. Drip Feed Drawdown allows customers to
designate regular amounts on a monthly, quarterly
half yearly or yearly basis, and each payment will be
a crystallisation event. They can take just the tax-free
cash entitlement or a combination of their tax-free
cash and taxable income to give control over the level
of income they receive and the amount of tax they pay.
This facility is only available to customers on a flexible
access drawdown basis.
INVESTMENTS
Assets to be crystallised must be held within the
Retirement Planning Control Account or within
Scottish Widows Pension Funds, from where our
system will automatically designate benefits.
This option is not available to customers who
are invested in Commercial Property.
MINIMUM PAYMENTS
There is no minimum designation amount,
and the amount of Drip Feed Drawdown can
be varied upon request.
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DESIGNATION AND PAYMENT OF
DRIP FEED DRAWDOWN
The tax-free cash element of any Drip Feed Drawdown
payment will be paid from the Retirement Planning
part of the Retirement Account. The residual designated
amount will be re-registered into Retirement Income,
either into the Retirement Income Control Account,
or into Scottish Widows Pension Funds in the same
proportion that they were disinvested from
Retirement Planning.
Any income payment required as part of the Drip
Feed Drawdown designation will be paid from the
Retirement Income element of the Retirement Account,
either from the Retirement Income Control Account or
if there insufficient funds held in the Control Account,
proportionately from any Scottish Widows Pension
Funds held in Retirement Income.
As with the standard Income Drawdown functionality,
payments will be made via BACS, net of any tax
using PAYE.
Note, when setting up Drip Feed Drawdown at new
business stage we do not offer the ability for advisers
to take a charge on a fixed monetary amount basis.
This can be added at a later stage if necessary.
All other remuneration options are available.
For full details of the eligibility criteria and how
the process works, please see the Adviser Guide
to Accessing Income with the Drip Feed Drawdown
Option (27253) and the Customer Guide to Accessing
Income with the Drip Feed Drawdown Option (27254).
 Retirement Account

CLEAR, COMPETITIVE CHARGES

OUR COMPETITIVE CHARGES ARE BROKEN DOWN INTO THEIR COMPONENT PARTS,
GIVING A CLEAR PICTURE OF THE COSTS THAT’S EASY TO EXPLAIN TO YOUR CLIENTS.

Charges Charges
under under
Retirement Retirement
Planning Income

There are three charges which will

apply to the Retirement Account:

  Investment Charges

Service Charge

  Adviser Remuneration

There’s no additional charge for drawdown and with one Service Charge, we won’t charge you for additional transactions
so you can service your clients’ needs without worrying about additional costs.

MONTHLY CHARGING DATE

There is a Monthly Charging Date on which we will deduct charges from the Control Account(s).
The first charging date will be one month after the ‘Start Date’ of the Retirement Account. The Start Date is:
• For single or transfer payments – the date the payment is received.
• For regular payments (Retirement Planning only) – the date we process all the relevant paperwork.
Where more than one type of payment is being made, for example a single payment and a regular payment at the same
time, the Start Date will be the earliest of the dates described above.
There is no change to the Monthly Charging Date on designating existing assets.

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 Retirement Account

SERVICE CHARGE

SERVICE CHARGE
We deduct a Service Charge from the Retirement Account for setting up and managing your client’s Retirement Account.
The charge is calculated as a percentage of the total value of all assets (Retirement Planning and Retirement Income) and
the percentage can reduce as this value increases and increase if the value reduces*. Please see the table for more details.
The Service Charge will be split proportionally between each Control Account, and will be deducted on the Monthly
Charging Date.
The first Service Charge will be deducted one month after the Retirement Account Start Date.

Service Charge rate table

The table directly below shows the standard rates that apply for new Retirement Account applications.

Total value of
Retirement Account £0k - <£30k £30k - <£50k £50k - <£250k £250 - £500k £500 - £1m £1m and above

Service Charge
(per year) 0.90% 0.40% 0.30% 0.25% 0.20% 0.1 0%
If the total value of a client’s Retirement Account moves from one tier to another, so will the rate of the Service Charge.
For example, if the value of a Retirement Account increases from £29,000 to £31,000, the rate of the Service Charge will
decrease from 0.90% to 0.40%. However, if the value of the Retirement Account decreases from £510,000 to £490,000,
the rate of the Service Charge will increase from 0.20% to 0.25%.
*Please note, mortgage amounts in respect of Commercial Property are excluded from the calculations to determine the
Service Charge.

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 Retirement Account

INVESTMENT CHARGES

Investment charges depend on the type of investments chosen, and can include charges made by fund managers,
Discretionary Fund Managers, the share dealing provider, and the Property Management Charge. Other charges and
expenses can apply – for example, professional fees and certain third party administration costs.

SCOTTISH WIDOWS PENSION FUNDS

• There’s no initial charge under the Scottish Widows Pension Funds.
• A Fund Management Charge, which comprises –
–– the annual management charge (including any external fund management charge and any multi-
manager fund management charge) and,
–– if applicable, an allowance (which can change on a regular basis) for any other expenses such as
trustees’ fees, auditor’s fees and regulator’s fees)
is taken directly from the funds selected. The annual management charge is allowed for in the fund pricing.
• Core Portfolio Funds –
–– 0.1%* Pension Portfolio Funds – multi-asset solutions at passive fund prices
–– 0.2%* Retirement Portfolio Funds – designed to help your drawdown clients’ pension pots
last longer, with our innovative Dynamic Volatility Management process which aims to reduce
sequence of return risk during periods of significant volatility
–– 0.4%* Premier Pension Portfolio Funds – more asset classes with specialist fund managers
• Governed Investment Strategies –
–– 0.1%*^ original Governed Investment Strategies
–– 0.4%* Premier Governed Investment Strategies which aim to provide better potential returns for
broadly the same level of volatility
*Total Annual Fund Charges: correct as at September 2018, and may change in future.
^A Total Annual Fund Charge (TAFC) of 0.1% normally applies when your client is fully invested in the
Pension Portfolios. If your client has selected the ‘Targeting Annuity’ retirement outcome, in the last five
years before their selected retirement date they will gradually be moved into the Pension Protector and
Cash funds, and a 0.2% TAFC would apply to that proportion of their investment.
For more details, please see –
• The Retirement Account Scottish Widows Pension Fund Charges (45422)
• Governed Investment Strategy Adviser Guide (49970)
• Core Portfolio Funds Sales Aid (56436)
• Premier Lifestyling Options Guide (55117)

18
 Retirement Account

FUND SUPERMARKET
• No initial charges apply to the selection of funds available.
• A Fund Management Charge, which comprises -
–– the annual management charge (including any external fund management charge and any multi-
manager fund management charge) and,
–– if applicable, an allowance (which can change on a regular basis) for any other expenses such as
trustees’ fees, auditor’s fees and regulator’s fees)
is taken directly from the funds selected. The annual management charge is allowed for in the fund pricing.
• There is also a Fund Supermarket Platform Charge, which is deducted monthly by cancelling units
or shares and is based on the total value your client’s Account holds in those funds. If the Account
is invested in more than one Supermarket fund, this Charge will be deducted from the fund in which
your client has the highest value at the charge date.
• There’s the potential to benefit from lower charges on some funds than if they were to be bought direct.
Please refer to the Retirement Account Fund Supermarket List and Charges (19145) for the charges
that apply to funds currently available

FIXED TERM CASH DEPOSIT (SUBJECT TO AVAILABILITY)

For more details of the charges that can apply, please see the Retirement Account Fixed Term Cash
Deposit Guide (48856)

DISCRETIONARY FUND MANAGEMENT

• Charges will be taken by the Discretionary Fund Manager from the sums and assets they hold – this
will be allowed for in the valuation of your client’s DFM portfolio.
For details of the charges that can apply, please see the Discretionary Fund Managers Guide to
services and charges (25361)

SHARE DEALING
• Please refer to the Retirement Account Share Dealing Guide (47937) for details of the charges
that can apply

COMMERCIAL PROPERTY
• Please refer to the Retirement Account Commercial Property Administration Guide (22926) for
details of the charges that can apply

The range of investments available and investment charges can change.

A personal illustration will provide an indication of the investment charges that can apply to your client’s
Retirement Account.
Scottish Widows will not normally make any charge for changing investments, whether switching between
investment funds, or moving between different asset classes. Costs may, however, be incurred in the sale or
purchase of certain investments.

19
 Retirement Account
ADVISER REMUNERATION
Adviser remuneration is intended to cover the cost of
any advice and/or services that you provide to your
client in relation to their Retirement Account. In line
with the Retail Distribution Review, whether we deduct
Adviser Charges or Commission will depend on when
your client’s Retirement Account was set up and whether
advice was given. Each of the two Retirement Account
elements (Retirement Planning and Retirement Income) is
independent and can be set-up on a different basis (e.g.
Retirement Planning could be on a Commission basis
and Retirement Income on Adviser Charges). Please see
page 24 for details on changing the remuneration basis.
ADVISER CHARGE(S)
Adviser Charge(s) can be paid when you have given
your client either ‘independent’ or ‘restricted’ advice,
and must be agreed between you and your client.
Illustrations will be required for any new Adviser
Charge(s) or increases to existing Adviser Charge(s)
so that your client can see the impact on their projected
Retirement Account value.
Once we have received your client’s signed consent to
the Adviser Charge(s) on the appropriate form, we can
facilitate the payment.
Adviser Charge options
• Initial Adviser Charge
• Ongoing Adviser Charge(s) (at element level)
–– Percentage of Account
–– Fixed Monetary Amount
• One-off Adviser Charge
Initial Adviser Charge
• For single contributions and transfer payments,
the charge is deducted immediately from
contributions made to the Retirement Account.
• For regular contributions, the charge will be taken
either monthly or yearly, to match the contribution
frequency. We will spread the Initial Adviser
Charge by paying you up to 50% of each regular
contribution, until the charge is paid in full. This
limit allows us to deduct any Fixed Monetary Amount
Ongoing Adviser Charges, from the Control Account(s),
that you may have agreed with your client at the same
time (please see page 21, example 1).
20
• Where the illustration shows multiple payers of the
same contribution type, any Initial Adviser Charge
will be apportioned across that contribution type
(please see page 21, example 2).
If any of these contributions are not received, we will
not facilitate payment for that part of the Initial Charge.
• For payments designated to Retirement Income,
any Initial Adviser Charge(s) are deducted from
the designated amount after the payment of any
tax-free lump sum.
Ongoing Adviser Charge(s)
These can be added, removed or changed at any time
during the term of the Account. Remember, that when
moving from Retirement Planning to Retirement Income
you will need to give us a new instruction for Ongoing
Adviser Charging - it won’t automatically carry over into
the Retirement Income element.
Percentage of Account
• This is taken as a percentage of the total value of
all the assets held within an element of your client’s
Retirement Account (different percentages can apply
to each element).
• It can be deducted monthly or yearly in arrears.
• It will be deducted on the charging date, for the
lifetime of the Account.
Fixed Monetary Amount
• This can be set up for a fixed number of payments
or for the lifetime of the Account.
• It can be paid monthly or yearly in arrears.
• It is possible to have multiple Fixed Monetary
Amount charges on the same element (for example,
you can have £5 per month for the lifetime of the
Account plus £100 per year for the first five years).
• If multiple yearly charges exist, each charge can have
its own ‘anniversary’ when the charge is deducted.
One-off (Ad hoc) Adviser Charge
You might agree a One-off Adviser Charge with your
client for additional advice that falls outside the
services that you have already agreed in respect of the
Retirement Account. You should request an illustration
from us so that your client can see the impact of the
additional charge and they must sign and return the
consent form.
 Retirement Account

ADVISER CHARGE EXAMPLES

Example 1 – Regular contributions with an Initial Adviser Charge and a Fixed Monetary Amount Ongoing
Adviser Charge
You set up a Retirement Account for your client with a £500 per month gross (£400 per month net) regular premium.
You agree to an Initial Adviser Charge of £1,100 for setting up the Retirement Account and a £20 per month Fixed
Monetary Amount Ongoing Adviser Charge for ongoing services.
£500 per month is paid into your client’s Control Account, £250 of which is deducted and paid to you as an Initial
Adviser Charge. The remaining £250 is invested according to your client’s investment instructions.
At the end of the month, on the charging date, £20 will be deducted from the Control Account to pay you the first Fixed
Monetary Amount Ongoing Adviser Charge.
Each following month, £250 will be deducted from the regular payment(s) until the Initial Adviser Charge is paid in
full. An additional £20 will also be deducted from the Control Account on each monthly charging date to cover the
Fixed Monetary Amount Ongoing Adviser Charge.

Amount Fixed Monetary Amount

Total Initial Adviser Charge
Month paid in by Tax relief Ongoing Adviser Charge
paid in amount paid to adviser
client paid to adviser

1 £400 £100 £500 £250 £20

2 £400 £100 £500 £250 £20

3 £400 £100 £500 £250 £20

4 £400 £100 £500 £250 £20

5 £400 £100 £500 £100 £20

6 £400 £100 £500 – £20

7 £400 £100 £500 – £20

8 £400 £100 £500 – £20

9 £400 £100 £500 – £20

10 £400 £100 £500 – £20

Example 2 – Initial Adviser Charge where there are multiple payers of the same contribution type
John is setting-up and paying a single contribution of £8,000 and a regular contribution of £200 per month into his
new Retirement Account.
His employer has also agreed to pay a £4,000 single contribution, and his wife another £4,000 single contribution
into the same Retirement Account at the same time.
John agreed with his adviser to pay an Initial Adviser Charge of £2,000, split £1,000 from the regular contributions
and £1,000 from the singles.
We will therefore apportion £1,000 of the Initial Adviser Charge across the three single premiums, taking £500 from
John’s single contribution, £250 from his employer’s contribution and £250 from his wife’s contribution.

21
 Retirement Account

Example 3 – Drawdown transfer with Initial Adviser Charge and Ongoing Adviser Charges (Percentage of Account
and Fixed Monetary Amount)
You transfer your client’s existing drawdown plan with a value of £150,000 into a new Retirement Account.
You agree to take an Initial Adviser Charge of £3,000 for the initial advice. For ongoing services you also agree to take
a £50 per month Fixed Monetary Amount Ongoing Adviser Charge for 24 months, and a 0.5% (per year) Percentage of
Account Ongoing Adviser Charge to be paid monthly for the lifetime of the Account.
£150,000 is transferred into the Retirement Income Control Account.
£3,000 is deducted from the Retirement Income Control Account and paid to you as an Initial Adviser Charge.
£147,000 is invested according to your client’s investment instructions.
Assuming the value remains the same, a Percentage of Account Ongoing Adviser Charge of £61.25 (£147,000 x
0.5%/12) and a Fixed Monetary Amount Ongoing Adviser Charge of £50 are deducted from the Control Account
and paid to you at the first Monthly Charging Date.
The Percentage of Account Ongoing Adviser Charge will continue to be deducted from the Control Account and paid to you
for the lifetime of the Account. The Fixed Monetary Amount Ongoing Adviser Charge of £50 will stop after 24 months.

COMMISSION
Commission can be paid when you have provided a service to your client but have not given them advice.
Please note that our personalised correspondence will refer to Commission as an ‘Adviser Payment Charge’. However, the
term ‘Adviser Payment Charge’ is also used in the policy provisions, schedules, and endorsements to cover both Adviser
Charges and Commission.

Commission options

OR

Scaled Commission Fund Based Commission

Commission details

Scaled Commission – Scaled Commission – single Fund-based Commission

regular payments to and transfer payments to
Retirement Planning Retirement Planning and
payments to Retirement
Income

0–50% (in steps of 0.01%)

0–1% pa paid monthly
Commission limits of the regular payments made 0–8% (in steps of 0.01%)
or yearly
in the first year

Between 1 and 5 years Between 1 and 5 years

Claw-back Term (in whole years), chosen (in whole years), chosen Not applicable
by adviser by adviser

Scaled Commission
This is paid to you immediately and then recovered each month from your client’s Retirement Account, over an agreed
period known as the Claw-back Term (please see example 2).

Claw-back Term for Scaled Commission

• The Claw-back Term can be any number of whole years between one and five. This will be reduced where the term to
the chosen retirement age is less than five years, subject to a minimum term of one year.

22
 Retirement Account

• Claw-back will be triggered in the following circumstances:

–– Any transfer to another pension provider before the end of the Claw-back Term.
–– Any transfer to another Scottish Widows pension policy before the end of the Claw-back Term.
–– Any reduction in regular payments to the client’s Retirement Planning element of the Retirement Account during
the Claw-back Term.
–– Any pension benefits being taken before the end of the Claw-back Term.
–– Designation (either full or partial) of funds to Retirement Income. This triggers claw-back on the Retirement
Planning element, if the designation takes place within the Claw-back Term.
• Claw-back is applied to each payment made to the Retirement Account that is still within the Claw-back Term.
• Claw-back will not be triggered on death of the Retirement Account holder, or a change of chosen retirement date
(except where pension benefits are taken, or designated at a date which falls within the Claw-back Term).
• Adviser payments will be clawed-back from the adviser to whom the original Scaled Commission was paid.
• For part claims, claw-back will apply pro rata across all payments to the Retirement Account still within their Claw-back
Term. For regular payment reductions, claw-back will apply first to the latest payments to the Retirement Account in
their Claw- back Term.
• The Claw-back Term will cease on funds that are fully designated. If benefits are partially designated, the Claw-back
Term will continue for the balance of the original period. The Scaled Commission will be reduced accordingly.
There are a number of factors which can change the claw-back calculation. Please contact your Scottish Widows Account
Manager for further details.

COMMISSION EXAMPLES
Example 1 – Scaled Commission
A client wants to make regular payments of £1,000 a month.
The client agrees to the adviser receiving £6,000 Commission for the services they’ve provided in setting up the Retirement
Account (equivalent to 50% of first year’s payments). The adviser chooses a Claw-back Term of four years (48 months).
£1,000 is placed in the Retirement Planning Control Account each month awaiting investment instructions.
£6,000 is paid to the adviser by Scottish Widows on commencement.
The deduction to cover the Commission payment will be £6,000/4/12 = £125.00 per month.
£125.00 per month starts to be deducted from the Retirement Planning Control Account with effect from the next
Charging Date for four years.

Example 2 – Claw-back
A client wants to take pension benefits from part of their Retirement Account. The total value of their Retirement
Account is £250,000. £62,500 is settled to provide pension benefits.
At the time of taking their pension benefits, a single payment of £25,000 is within its Claw-back Term of three years
(36 months).
The adviser received a payment of £1,250 for that single payment. There are eight monthly Commission payments remaining.
Claw-back will be £1,250 x 8/36 x £62,500/£250,000 x 1 = £69.44

Fund Based Commission

• This is taken as a percentage of the total value of all the assets held within an element of your client’s Retirement
Account (different percentages can apply to each element).
• It can be deducted monthly or yearly in arrears.
• It will be deducted on the charging date, for the lifetime of the Account.
• Once chosen, the Fund Based Commission percentage cannot be increased but it is possible to decrease and remove
it. Please speak to your Scottish Widows Account Manager for further details.
Pensions Advice Allowance
You can take a Pensions Advice Allowance for giving your client advice on retirement planning. The maximum amount
allowed is £500 a year across all your client’s pension plans (up to three times over their lifetime). You should request an
illustration from us so that your client can see the impact of the charge, and they must sign and return the consent form
before the charge can be taken.

23
 Retirement Account

CHANGE TO ADVISER REMUNERATION BASIS

EACH RETIREMENT ACCOUNT ELEMENT CAN BE SET UP ON
A DIFFERENT BASIS (E.G. RETIREMENT PLANNING COULD BE PAYING
COMMISSION AND RETIREMENT INCOME COULD BE PAYING ADVISER CHARGES).

With client consent, however, it is possible It is not possible to convert an Adviser

to convert a Commission-paying element to Charge-paying element to a Commission-
an Adviser Charge-paying one if you want paying one, and any new Adviser Charge(s)
to be remunerated for any advice you have can only be deducted with client consent,
given on, for example, an increment. This and if advice has been given, or ongoing
consent will be requested on the increment services are to be provided.
application or charge change form.
Where Fund Based Commission is currently
being paid, we will require specific consent
to convert this to a Percentage of Account
Ongoing Adviser Charge. Once this
conversion has taken place no further
Commission can be paid for services in
relation to that element.

24
 Retirement Account

CONTROL ACCOUNT

THE CONTROL ACCOUNT ACTS AS A CLEARING AND TRANSACTIONAL ACCOUNT

FOR ALL PAYMENTS MADE TO AND FROM A RETIREMENT ACCOUNT.

Adviser, service
and other charges

RETIREMENT ACCOUNT
Tax-free cash
CONTROL
ACCOUNT
Income payments

Regular, single or
transfer payments

Tax relief

If a Control Account has a positive balance it can receive If your client wishes to make a pension encashment,
positive balance adjustments. You can contact us for you need to ensure that there is a sufficient balance in
the current rate or go to www.scottishwidows.co.uk/ the relevant Retirement Planning Control Account to
adjustmentrates cover this in full. We will not automatically sell units
from any Scottish Widows Pension Funds held or make
The Service Charge(s), Adviser Charge(s) or Commission,
any payment and a Deferred Charge will not be applied,
and certain investment-related charges and expenses are
and this may result in a partial or non payment.
deducted from the Control Account(s). Please refer to
pages 16-20 for further details on charges. If your client wishes to take a regular income or an ad
hoc income payment, a sufficient balance in each
If the Control Account balance is insufficient and the
Retirement Income Control Account or sufficient units in
Retirement Account is invested in any Scottish Widows
Scottish Widows Pension Funds will need to be
Pension Funds (even if the Account holds other
maintained in Retirement Income to meet the value of
investments), we’ll automatically sell units proportionately
the payments due. If there’s insufficient balance in the
from the Scottish Widows Pension Funds held to cover
Control Account to cover the income payment, and no
the charges and/or income. Alternatively, to ensure that
disinvestment instruction has been provided, and there’s
a sufficient balance in the Control Account is maintained,
an element of Scottish Widows Pension Funds, then we’ll
you can contact us to arrange a regular disinvestment
disinvest proportionately across these funds from the
from specified Scottish Widows Pension Funds.
Retirement Income element to cover the income payment.
We will not automatically sell other types of investments
A Deferred Charge will not be applied to cover income
to cover charges and/or income.
payments and this may result in a partial or non-payment.
If, at any time, the balance of a Control Account and the units
available in Scottish Widows Pension Funds are insufficient
to meet the Service Charge(s), any Commission, and any
investment-related charges, these charges will become a
Deferred Charge. Please see the ‘Deferred Charge’ section
on the next page for more details. Please note that a Deferred
Charge will not be applied to cover Adviser Charges.

25
 Retirement Account
ADVISER CHARGES AND THE CONTROL
ACCOUNT
Where we are unable to deduct an Adviser Charge in full,
that instance of the charge won’t be paid, not even in part.
If an Adviser Charge fails, a letter will be sent to you and
your client explaining this. The failed charge will not be
carried forward to the next charging date.
26
DEFERRED CHARGE
Each day a Deferred Charge cannot be collected, we
will increase its amount by a percentage of the Deferred
Charge. You can contact us for the current rate or go to
www.scottishwidows.co.uk/adjustmentrates
A Deferred Charge can be settled by selling investments
held under the relevant Retirement Account element,
with the proceeds paid to the relevant Control Account.
Alternatively, where possible, a single payment or
transfer payment may be paid to the Control Account to
settle a Deferred Charge. Regular payments, in respect of
Retirement Planning, will not be automatically used to
settle a Deferred Charge, but can be redirected by your
client to the Control Account for this purpose.
If a part or total claim is requested, any Deferred Charge
will be settled from the proceeds of disinvestments
before any benefits or income payments are paid out.
We will write to you and your client if a Deferred
Charge occurs.
 Retirement Account
TRADING
SCOTTISH WIDOWS PENSION FUNDS
• If a request to buy or sell units is received by us
before midday, the trade will normally be subject to
the following day’s unit prices. Requests received
after midday will normally be subject to the unit
prices applying two days in the future.
• Switches between Scottish Widows Pension Funds
are carried out as simultaneous transactions,
involving both sell and buy trades. The trades are
subject to the pricing rules described above.
FUND SUPERMARKET
• If a trade request is received online, the request
will normally be passed to the Fund Supermarket
provider in real-time, who will aim to have the
trade completed at the price determined at the next
available pricing point.
• Where a request is submitted on paper, we will try to
pass the request to the Fund Supermarket provider in
time for the next available pricing point. On receipt
of the request, the Fund Supermarket provider will
aim to complete the trade at the price determined at
the next pricing point.
Switches involve both a sell and a buy trade. The sell
trade will be priced as described above. The buy trade
will normally be priced at the next available pricing
point following the completion of the sell trade.
Switches between Fidelity Onshore Funds will be
processed simultaneously.
Please note that pricing points may vary according
to the funds being traded.
FIXED TERM CASH DEPOSITS
Each Fixed Term Cash Deposit that we make available
will have an Offer Period during which your client can
ask you to invest. There must be sufficient funds
available in the relevant Control Account on the day
the request is made.
At the Investment Start Date, provided there are still
sufficient funds available in the Control Account, we’ll invest
the requested amount in the Fixed Term Cash Deposit.
27
At the Investment End Date, we’ll arrange to switch
the value of your Fixed Term Cash Deposit investment,
including the interest earned, back to the Control
Account. The proceeds will be available in the Control
Account on the working day following the Investment
End Date.
DISCRETIONARY FUND MANAGEMENT
• We will aim to transfer money to the Discretionary
Fund Manager on the date of receipt of an instruction.
• The timing of disinvestments from DFM assets to the
Control Account(s) will generally be dependent on
the liquidity of the DFM portfolio.
SHARE DEALING
• Before trading can commence, you must move
sufficient funds into the Share dealing account.
• Trading is available both online and by telephone.
You will be quoted a price for the transaction, which
can then be agreed and carried out in ‘real time’.
Processed trades will be confirmed and contract
notes issued subsequently.
There is more information about Share dealing in
‘The Retirement Account Share Dealing Guide’ (47937).
COMMERCIAL PROPERTY
• We will aim to transfer money to the third party
administrator, Curtis Banks, on the date of receipt of
an instruction.
• Typically, a property purchase can take anything
from 8–12 weeks to complete. However, there
is no guarantee a purchase will take place in
these timescales.
• The timing of disinvestments to the Control
Account(s) depends on the nature and size of
the request, the amount of available cash and, if
necessary, the time taken to sell the property.
Any payments received for which we have not received
an investment instruction will be held in the relevant
Control Account(s).
 Retirement Account

DEATH BENEFITS

If your client dies, the value of their Retirement • Where the lump sum option is applicable, there
Account can be used to provide benefits, as follows: is no tax charge if it is paid to a charity nominated
by a client.
• If they die before age 75:
• If a Retirement Account is arranged under an
–– Lump sum – any beneficiary can take the value
individual trust, we will pay any lump sum death
of the fund as a tax-free lump sum.
benefit to the trustees.
–– Income Drawdown – any beneficiary can take
• Some investments may take longer to sell than
the value of the fund through income drawdown.
others, and we may therefore pay the death
The income will be tax-free.
benefits in stages.
–– Annuity – any beneficiary can use the value of
• No inheritance tax will normally be payable on
the Retirement Account to buy an annuity.
the value of the Account because we will choose
Please note, however, that Scottish Widows can
the beneficiary, taking into account any nomination
only currently provide an annuity for a spouse or
your client makes.
any other dependant who must be under 75 at
the time of purchase. Income from any annuity • Where your client has not made a nomination and
will be tax free. there are no dependants, then we can nominate
a beneficiary.
• If they die on or after age 75:
–– Lump sum – any beneficiary can take the value
ACCIDENTAL DEATH BENEFIT –
of the fund as a lump sum. This will normally be
taxed at their marginal rate of income tax.
RETIREMENT PLANNING ONLY
–– Income Drawdown – any beneficiary can take If your client dies as a direct result of an accident before
the value of the fund through income drawdown. their Retirement Account has been running for five years,
The income will normally be taxed at their the amount we will pay will be the greater of 120% of the
marginal rate of income tax. total payments received, or the value of the investments
within Retirement Planning on the date that we receive
–– Annuity – any beneficiary can use the value of
notification of death.
the Retirement Account to buy an annuity.
Please note, however, that Scottish Widows can Please note that Accidental Death Benefit does not apply
only currently provide an annuity for a spouse or to Retirement Income.
any other dependant who must be under 75 at
No charge is made for the Accidental Death Benefit.
the time of purchase. The income will normally
be taxed at their marginal rate of income tax.
• A beneficiary could be a dependant, a nominee or
a successor.
–– A dependant is someone who is a spouse, civil
partner, or financially dependent on your client.
–– A nominee can be any other person that your
client chooses to nominate, even if they are not
dependant on them, and can also be a charity.
–– The beneficiary can pass on any unused
drawdown funds on their death to their own
beneficiary, known as a successor.

28
 Retirement Account

COOLING OFF

Your client can change their mind within 30 days of receiving their cancellation notice.
• For elements on an Adviser Charge basis, we’ll return • For elements set up on a Commission basis, we’ll
all payments less any Initial Adviser Charges already return all payments less, for single and transfer
paid to you and, for single and transfer payments, payments, any fall in their value.
any fall in their value.

29
 Retirement Account

ONLINE FUNCTIONALITY – WE’RE EASY TO DO BUSINESS WITH

WORKING WITH US IS EASY, SO YOU CAN GET ON

WITH ADVISING AND SUPPORTING YOUR CLIENTS
• Signature-free processing – No wet signature
required for new applications and increments to
existing business, saving you unnecessary delays.
• 48 hour policy set up for new business – Giving
you the confidence your requests are being actioned
with no need to chase.
• Digital self service and support – Fast, efficient
service for your key requests allowing you to spend
more time with clients. Services such as Portfolio
Management Service and End State Switching take
the hard work out of managing clients’ funds.
• Dedicated telephone servicing – Quicker and easier
to reach someone who can really help, so you can get
issues resolved quickly for your clients.
• One and done case ownership – Empowered,
multi-skilled colleagues delivering excellent service
to advisers and clients in shorter timescales.
END STATE SWITCHING makes it simple for you to
restructure your clients Scottish Widows and Fund
Supermarket funds. It allows you to -
• Input your clients’ desired investment split,
our system will then calculate the individual
sells, switches and buys required to create
this ‘end state’
• Manipulate the monetary holding in the
Control Account as part of the transaction
• Have the option of whether to include the Control
Account as part of the investment mix
• Mirror the investment split across to any existing
regular premiums
Our PORTFOLIO MANAGEMENT SERVICE provides a
simple way of creating and managing your own Adviser
Portfolios. The service allows you to:
• Manage clients with similar investment aims and
objectives consistently
• Link new and existing policies to an Adviser Portfolio
• Define investment content for your own Adviser
Portfolio to use for illustrations and applications
• Rebalance client assets held within an Adviser
Portfolio back to the target asset allocation
• Manipulate the monetary holding in the Control
Account as part of the transaction
• Adviser Portfolios can be made up of Scottish Widows
and Fund Supermarket funds, exclusive to your clients.

BACK OFFICE LINKS

• Assyst • IFAMS
• Iress • Intelliflo
• Best Practice • JCS
• Capita • Plum
• Durrell • True Potential

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 Retirement Account

GLOSSARY

Term Description
Accidental Death Benefit The payment made by Scottish Widows if a client dies as a direct result of an accident before their
Retirement Account has been running for five years. This will be the higher of 120% of the total
payments received into the Retirement Planning, or the realisable value of the assets held within
Retirement Planning.
Adviser Charge(s) Agreed between you and your client and facilitated by Scottish Widows. Paid when you have given
your client either ‘independent’ or ‘restricted’ advice.
Capped Drawdown Drawdown where there are limits set by the Government on the amount of income your client can
take each year.
Claw-back Term The agreed period over which Scaled Commission is paid to you and recovered each month from
your client’s Retirement Account.
Commission Paid when you have provided a service to your client but have not given them advice.
Our personalised correspondence will refer to Commission as an ‘Adviser Payment Charge’.
However, the term ‘Adviser Payment Charge’ is also used in the policy provisions, schedules,
and endorsements to cover both Adviser Charges and Commission.
Control Account(s) The Control Account acts as a clearing and transactional account, for example for all payments
made to and from a Retirement Account. The Retirement Account can have up to two Control
Accounts, one for Retirement Planning and one for Retirement Income.
Deferred Charge A Deferred Charge occurs where Scottish Widows is unable to deduct any Scottish Widows
charges, Commission, or certain investment related charges due from a Control Account because
there is an insufficient balance. A Deferred Charge will not apply if we are unable to deduct any
Adviser Charges.
Designate To move assets from Retirement Planning to Retirement Income.

Elements The Retirement Account can have two elements: Retirement Planning and/or Retirement Income

Fixed Monetary Amount Set up for a fixed number of years or for the lifetime of the Retirement Account element, and paid
Ongoing Adviser Charge monthly or yearly in arrears.

Flexible Access Drawdown Drawdown where there is no restriction on the amount that your client can take as income each
year, up to the full value of the Retirement Income element of their Account.

Full Pension Encashment Where the full value of the Retirement Planning element is taken as a cash lump sum withdrawal.
25% will be tax-free and the remainder taxable. Pension encashment is also known as
Uncrystallised Funds Pension Lump Sum (UFPLS).
Fund Based Commission Taken as a percentage of the total value of all assets held within a Retirement Account element.
Deducted monthly or yearly in arrears, for the lifetime of the Retirement Account element.

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Term
Immediate Vesting Transfer
Initial Adviser Charge
Investment Charge
Monthly Charging Date
One-off Adviser Charge
Ongoing Adviser Charge(s)
Partial designation
Partial Pension Encashment
Percentage of Account
Ongoing Adviser Charge
Positive balance adjustments
Property Management Charge
Scaled Commission
Service Charge
Retirement Account
GLOSSARY (CONTINUED)
Description
Uncrystallised pension funds transferred to the Retirement Planning element before a full or
partial designation to the Retirement Income element is made.
Deducted from contributions, and paid for advice and services received in setting up a new
Retirement Account or making an increment to an existing one.
Charges made by Fund Managers, the Discretionary Fund Managers, the Scottish Widows
Property Management Charge and any Share Dealing provider charges.
The date from which Scottish Widows deducts certain charges from the Control Account(s).
An ad hoc charge, paid for any additional advice that falls outside the services that you have
already agreed in respect of your client’s Retirement Account.
Deducted from the Control Account(s) and paid for ongoing advice and services received during
the lifetime of the Retirement Account. Taken as a percentage of the Retirement Account element
or as a fixed monetary amount.
To move a partial Retirement Planning element to the relevant Retirement Income element.
Where part of the value of the Retirement Planning element is taken as a cash lump sum
withdrawal. 25% will be tax-free and the remainder taxable. Pension encashment is also known
as an Uncrystallised Funds Pension Lump Sum (UFPLS).
Taken as a percentage of the total value of all assets held within a Retirement Account element.
Deducted monthly or yearly in arrears, for the lifetime of the Retirement Account element.
A positive adjustment on the Control Account(s).
Covers certain purchase and ongoing administration costs of a Commercial Property.
Paid to you immediately and then recovered each month from your client’s Retirement Account
over the Claw-back Term.
A monthly charge to the Retirement Account for setting up and managing your client’s Retirement
Account. This charge is based on the value of assets held in both Retirement Planning and
Retirement Income.
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 Retirement Account

INFORMATION

https://adviser.scottishwidows.co.uk/products/
individual-pensions.html

Contact our dedicated Retirement Account IFA servicing team

0800 096 4364

or get in touch with your Telephone Account Manager
or Business Development Manager

The information in this guide is based on Scottish Widows’

understanding of current tax rules and pension legislation.
These may change in the future.
Charges, terms and limits may change.
Full terms and conditions are available on request.
For up to date information and literature supporting
the Retirement Account, visit our website.

This information is for UK financial adviser use only

and should not be distributed to or relied upon by any other person.

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 Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN.
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.

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