Product information
If you’re serving less than thirty years (or
thirty-five years for members of the new Police Pension Scheme)
it’s likely you’ll have a big drop in your pension. Even if you’re
getting the full benefit, the thought of a fall in income at
retirement can be a worry.
A stakeholder pension can help boost your
retirement income and provide some reassurance for the future. It
can also be used to save for your partner or children.
When you choose to take your pension – any
time between 55 and 75, and you don’t even need to retire - you can
receive up to a quarter of the fund as a tax-free lump sum, and the
rest is converted into a regular income. You can start saving as
little as £20– but the more you put in, the more you get out.
Who’s it for?
- Police Officers – you have
your own excellent pension scheme, but 30/35 years is a long time
to work for one employer before you earn the maximum pension. A
stakeholder pension can go towards bridging the pension gap if
you’re not serving that long
- Retired Police Officers –
you can build up additional pension if you are still working after
leaving the Police. You can even have a stakeholder pension if you
don't go into further employment
- Families of Officers and Police
Staff – husbands, wives and partners who go out to work
may want to build up their own pension. Those who work in the home
may worry about having no pension provision of their own. Parents
worry about their children's futures. A stakeholder pension could
be the answer
You can find out if you can apply on
the are you eligible page of this
website. For tax reasons, residents of the Isle of Man and Channel
Islands are not eligible.
Why stakeholder?
Stakeholder pensions have low costs and are
very flexible. They have to meet certain Government
requirements including limits on how much we can charge, the
minimum amounts you can add, and so on. The PMAS Stakeholder
Pension charges a competitive 1% per year and pays no commissions –
meaning more of your money will be working for you.
Most people can benefit from a stakeholder
pension, whether they are employed, self-employed or not employed,
providing they are able to make sufficient contributions.
- Employed – you can
contribute to a stakeholder pension even if you’re part of an
occupational (company) pension scheme. It’s a good way to boost
your retirement income
- Self-employed - a
stakeholder pension could be particularly suitable for someone who
is self-employed, such as a Retired Police Officer or an Officer's
partner running their own business
- Not employed - even if
you’re not in work, you can put up to £3,600 gross (£2,880 net)
into a pension per year and still receive tax relief* – getting back tax you’ve
not even paid. Current favourable tax treatment may change in the
future.
- Children – there’s no lower
age limit to stakeholder pensions, so even children can have a
plan. You can help your children or grandchildren plan for their
long-term future – the pension must be taken between age 55 and
75
Saving tax
A stakeholder pension is a great way to make
tax-efficient savings.
- For every £80 you pay into your pension, £100
is invested. This is because the tax you’ve already paid on your
income – at 20% - is given back to you and put into your
stakeholder pension
- Non-earners also receive this tax benefit -
and so will get more tax relief than they've actually paid
- Higher rate taxpayers can claim further tax
relief through their tax return
- Pension funds also enjoy tax-efficient
growth, so your pension fund will grow at a higher rate than a
taxed investment
- When you retire you can take up to one
quarter of your fund as a tax-free lump sum. The remainder will go
to purchase a pension income, on which you may pay income tax
- This represents the current tax position but
legislation may change in the future
Life cover
If you die before you take your pension
benefits, your fund can be paid as a lump sum. The lump sum will be
tax-free if your total pension benefits are less than your
available lifetime allowance at the time of your death.
Not sure if it’s for you?
There’s a lot to think about when making
pension decisions. We’ve outlined some of the key points below, and
you can download decision
trees – a series of questions which will help you
make pension choices armed with all the facts. You should also make
sure you read the key
features and frequently asked questions.
If you've got another pension
You can start a PMAS Stakeholder Pension even
if you have other pension arrangements. However, HM Revenue
& Customs has set overall limits on the tax relief you can
receive:
- Annual allowance - you can
contribute the greater of £3,600 (gross) or 100% of your gross UK
earnings up to £235,000 per year (2008/2009 tax year) before you
are subject to tax penalties
- Lifetime allowance – you can
contribute a maximum of £1.65 million (2008/2009 tax year) to all
your pensions in your lifetime before you are subject to tax
penalties
Our stakeholder pension can run alongside the
Police Pension Scheme and other occupational schemes but isn’t a
replacement for them. The life insurance and ill health pension
offered by your occupational scheme are much higher than this
pension can offer – you should always consider the Police Pension
Scheme first.
This is compounded by the fact that in most
occupational pension schemes your employer makes contributions as
well.
If you’ve got any doubts, seek independent
financial advice.
How much do you have to contribute?
You can invest as little as £20 in the PMAS
Stakeholder Pension.
How do you pay?
Payments can be monthly or one off. Regular
payments are paid by Direct Debit from a bank or building society
account.
Your PMAS Stakeholder Pension can also accept
transfers from most other pension arrangements, although you will
need to check if your existing pension provider charges you for
this. You should also seek advice to see whether transferring is
the correct option for you. Transfers of this type do not normally
count towards the annual allowance. Contact us on
0845 88 22 999 for
details.
What if you’re worried about risk?
No pension is without risks, but we aim to
reduce those risks by offering a lifestyling investment option.
Your payments are initially invested into our
stakeholder pension fund. Five years before you’ve chosen to
receive your benefits, your investments and future contributions
are gradually moved over into a lower-risk lifestyling fund. You
can opt out of this if you wish.
There are no guarantees, and even if you
choose lifestyling the value of your investment can go down as well
as up.
How is the value of your pension
calculated?
Your contributions are used to buy units in
the fund. At any time, the value of the fund is the number of units
you hold multiplied by the unit price. The value of your plan
depends on the value of the investments we’ve made and it can go up
and down in value.
We will send you a statement every year
telling you what your fund is worth.
How to apply
Before applying make sure you’ve read the
product information and the
key features pages, and you
have National Insurance number and bank details to hand.
You can:
The application should take no more than ten
minutes to complete.
Proving your identity
To comply with money laundering regulations,
we may carry out an online identity check with a reference agency
when you apply. The agency will add a note to your credit record to
show that an identity check has been made, but this information
will not be available to anyone else and will not affect your
credit rating.
You can find out more about why we need to
check your identity on the
Financial Services Authority
website.
* Tax legislation may change.