Pensions and annuities FAQs

You need your own pension because the state pensions paid by the government aren't that generous.

If you qualified for the full basic state pension (like most people who work full time from their late 20s)*, you would get £102.15 a week in 2011/2012, which works out at just over £5,300 a year.

Compare this to your salary now - and the increases you'd like in the future. This is why you need your own pension.

(You may also be entitled to an additional State Pension, which depends on your income. Pension Credit may also be available. The rules for these are complex - you can find out more at Directgov.)

* Source is Directgov - you need 30 years to qualify.

Relying on your property to fund your retirement income could be risky.

For a start, to release any cash you would need to move home and downsize. This could involve a lot of cost, such as paying stamp duty. Another alternative is equity release, which could prove an expensive way to raise the funds you need.

And having all your investments in one asset, a house, is risky. If your money is tied up in a house, you are at the mercy of the property market when you need to sell.

Good question - the answer, of course, depends on inflation.

If inflation averaged 2.5% over the next 30 years, the price of goods would approximately double, So an income of £1,000 in 30 years time would buy the same as what £468 buys you today.

http://www.whatsthecost.com/cpi.aspx

For full details of the risks please read the Stakeholder Key Features Document (PDF, 205kb).

We strongly recommend that you speak to a financial adviser if you need help. There may be a cost for this. You can call Standard Life Client Management on 0845 272 8810. Call charges may vary. Or alternatively use our find an adviser tool to help you locate an adviser near to you.

Standard Life Client Management advises on, and sells products from, subsidiaries of Standard Life plc and some external providers.

Yes. This plan can accept payments from your employer or from other third parties (spouse/civil partner, parents etc). Their payments would count towards your Annual Allowance total (£50,000 for tax year 2011/12).

Yes, but you need to be aware of the rules regarding payments that exceed the Annual Allowance. Standard Life will not accept payments which are not eligible for tax relief.

We recommend that you find out if your new employer has a company pension scheme and whether they make payments to it. If they do it is likely to be a good idea to join your employer's scheme so that you do not miss out on the payments they make. If you are unsure, we strongly recommend you seek financial advice.
You can keep your Stakeholder plan and still make payments to it, again ensuring that you don't go over the Annual Allowance.

Even if you're not earning you can still make payments to your Stakeholder plan up to £2,880 each year - which the tax man will top up to £3,600.

We know it's not always possible to make payments - so we're flexible.

You can take a payment holiday until you're in a position to restart payments. We'll continue to take charges each year even if you stop making payments. This could mean that if you stop making payments and don't restart them, our charges could reduce your plan value by the time you retire.

You can take a payment holiday at any time for as long as you need. We'll continue to take charges each year even if you stop making payments. This could mean that if you stop making payments and don't restart them, our charges could reduce your plan value by the time you retire.

6 weeks before your chosen retirement date you will receive a letter advising you that the date is approaching.

In this letter we detail the different options available to you. In simple terms you should have built up a sum of money. You can normally take 25% of that money out in one go, tax-free. For example, if your fund is worth £60,000 you can take out £15,000 as a lump sum. The remainder is used to provide you with an income for the rest of your life, which will be taxed as earned income. This is usually done by taking what is known as an annuity. Read through our Retirement guide (PDF, 509kb) for more information.

The earliest you can receive income from this plan is age 55.

We will pay out the value of your plan at the date of your death. You can tell us who you'd like to receive your money by completing the Nomination of Beneficiary form.

Everyone is different so you should take time to decide which retirement income product best suits your needs.

The way you choose to take your income after retirement can be done in such a way that you provide an income for your spouse/civil partner, children or whoever you want to after you die. The options you choose may, however, reduce the amount of pension you will receive.

Yes, but transferring can be a big step and you need to make sure that it's definitely the right thing to do, so we strongly recommend that you speak to a financial adviser before embarking on a pension transfer. You should bear in mind that transferring your pension won't necessarily mean you'll get more than you otherwise would have done.

When you take out your annuity you have a legal right to cancel your contract within 30 days if you change your mind. The 30-day period starts from the date you receive the Policy Provisions and Policy Schedule. If you decide you want to cancel you should write to us at:

Standard Life Assurance Ltd
Standard Life House
30 Lothian Road
Edinburgh
EH1 2DH

Please make sure that you include your plan number in any correspondence with us. If you decide to cancel the contract, you'd need to return any money that has been paid to you.

Once the 30 days have passed you won't be able to cancel the annuity or change any of the options you've chosen.

It's important to consider each of the options when you take the plan out. Once it's set up you can't change the options on it, cash it in or transfer it to another provider.

It depends where the funds came from to buy the annuity.

If you bought the annuity with a transfer from another pension provider, then we'd send the money back to that provider. This may be less than the amount received if the value of the fund had fallen during this time.

If the annuity was bought with a lump sum that you'd invested in an immediate vesting pension then we'd send the money back to you but it could be less than the amount you paid in if the value of the money had fallen during this time.

In addition, you'd have to send back to us any payments that you'd received from the annuity.

There could be other conditions attached to the pension you had and the annuity you've chosen which would also affect cancellation - if you're thinking about cancelling then it's important that you contact us as soon as you can or speak to your adviser.

After the cancellation period has expired you can't cancel or make changes to your annuity.

Unfortunately, even if you're retired, you still have to pay tax.


When you take out your annuity, HM Revenue & Customs tells us which tax code to use in relation to your income.  We deduct tax relating to that code.  This could mean a reduction in your payments of up to 50% until the underpaid tax has been paid.  The tax deducted is sent to HM Revenue & Customs.

In most cases the tax will be Pay As You Earn (PAYE) tax and if you have a query about the amount being deducted, or the tax code itself, then:

If you have a Retirement Annuity Contract please contact:

HM Revenue & Customs
Saxon House
1 Causeway Lane
LEICESTER LE1 4AA

Or call on 0845 366 7868 (call charges may vary) and quote tax reference 206/RAC363.

For any other pension annuity please contact:

HM Revenue & Customs
Centre 1
East Kilbride
GLASGOW G79 1AA

Or call them on 0845 0703 703 (call charges may vary) and quote tax reference 961/8723350.

If you think the tax code is wrong then you need to contact HM Revenue & Customs. We'll help if we can but HM Revenue & Customs will only review tax codes if they are asked by the person whose code it is.

If you are receiving payments from a Purchased Life Annuity then you may be paying Schedule D Tax. If you don't think you should have tax deducted from your annuity please call us and we'll discuss this with you.

If you have any other questions about Schedule D tax then please contact:

HM Revenue & Customs
Saxon House
1 Causeway Lane
LEICESTER LE1 4AA

Or call on 0845 302 1442 (call charges may vary).

You can find more information about tax and pensions at www.hmrc.gov.uk/pensioners.

This link is provided for general information purposes only. Standard Life accepts no responsibility for information contained in the site or for the site not being available at all times.

Tax and legislation may change. The information we have given here is based on our current understanding of law and HM Revenue & Customs practice.

We normally send you a note at the end of the tax year about how much income you've received. If you can't find this or haven't received it then contact us and we can give you the information you need.

If your name, address or the bank that we make payments to have changed then contact us and we'll update our records.

We'll do this while you're on the phone so you can be sure your details are up to date.

Of course, just contact us with the details and we'll go through your options and the way these affect the tax you pay on your annuity.

We can keep on making payments to your UK bank account or set up payments for you in the country that you're moving to. There would be a bank charge made for each payment sent abroad which would be deducted from the payment. Currency changes could also affect the amount that you receive.

Although it's not a nice thing to think about, it is something that can affect us. If you contact us we can go through your options. If you'd like us to speak to someone else, such as a relative, then we can do that; however, we'd want to speak to you first just to make sure that you're happy for us to do this. Then we can go through the options and make arrangements which you're happy with and which suit your situation. We're here to help.

If you call us on behalf of a plan holder then we may not be able to give you all the information you need or act on your instructions because of data protection but we can let you know what our requirements are.