Immediate Vesting Personal Pension

You can pay money into a pension to buy an immediate guaranteed income that will be paid to you for the rest of your life. This is called an annuity.  

If you want to buy a Standard Life annuity with a pension held elsewhere and take your pension benefits immediately, our Immediate Vesting Personal Pension could work for you.

You could also normally choose to take up to 25% of your fund as a tax-free lump sum, along with a smaller guaranteed taxable income.

Remember that buying an annuity is a long-term decision and once it’s set up, you can't cash it in or make any changes.

This option might suit you if:

• You want to make a single lump sum payment to buy an immediate annuity from Standard Life

• You want to use either a transfer payment from an approved employer’s pension scheme, a personal pension plan or other qualifying fund to buy an immediate annuity from Standard Life.

• You like the security of knowing that you have a guaranteed regular income for the rest of your life

• You want to receive your pension income at the same time as taking your tax free lump sum

• You are comfortable making a decision now on how you want to receive your pension income

How much income will you get?

The income you'll get can depend on a number of factors. The most important ones are:

• The amount of money you have in your pension pot available to buy the annuity

• Your age

• Your sex

• Annuity rates

• Your residential postcode

• The options you choose – for example, will the annuity include regular increases, or continue to be paid to your dependants when you die

The Standard Life difference

• You’re supported by Standard Life’s award-winning customer service. We’ll take you through the transition from having a pension fund to receiving an income – smoothly and easily.

• An annuity is a long term decision so it’s good to known you’re in experienced hands. Established in 1825, Standard Life provides life assurance and pensions, investment management to over 6.5 million customers worldwide.

Buying a Standard Life annuity with a pension plan from someone else

If you want to buy your annuity from Standard Life, but hold a pension plan elsewhere, you can transfer your funds to us from your existing pension provider. We would then pay out any required tax-free cash (up to a maximum of 25%) and set up your annuity – a guaranteed income for the rest of your life.

Transferring a pension plan needs careful thought. We'd strongly recommend you get financial advice to make sure it’s the best option for you. There may be a cost for this advice.

Are you contracted out?

Have you been contracted-out of the State Second Pension (S2P) and had your National Insurance contributions paid into your pension plan? These contributions are a separate part of your pension fund called Protected Rights. You can also use this part of your pension fund to purchase an Immediate Vesting Personal Pension.

It's important to consider your choices carefully. Because once the plan is set up, you can't cash it in or make any changes.

• You have a number of options to choose from to make sure the income you get for the rest of your life meets your needs and the needs of those who are financially dependent on you. For example, it is important to consider how inflation may reduce the purchasing power of the income over the years.

• Adding more options generally reduces the amount of income that you get initially

• When you die, your pension benefits will stop unless you specifically build in an income for those who are financially dependent on you or add a guaranteed period of up to 10 years

• Contributions from being contracted-out of the State Second Pension (S2P) are a separate part of your pension fund called Protected Rights. If your pension fund includes protected rights, and you are married or in a civil partnership when you buy your annuity, this part of your pension must continue to be paid to your husband, wife or civil partner upon your death at half the rate payable when you were alive

• If your pension fund includes protected rights money (for any period you were contracted out of the State Second Pension), the maximum guarantee period for this part of your fund is 5 years

• Think carefully about the choices you make. Because once you've bought this plan and the 30 day cancellation period has expired, you can't change any of the options and you can't transfer to another provider

Find out more

Before buying an Immediate Vesting Personal Pension you need to be fully aware of the risks and commitments. You should read the Key Features (PDF, 192kb) and the rest of this section.

Get financial advice

Buying an annuity is a long-term decision. It’s also one you can’t change later, so it’s worth seeking professional advice. You can do this by contacting Standard Life Direct on 0845 272 8810 or speak to your financial adviser.

Standard Life Direct is provided by Standard Life Client Management which advises on, and sells products from, subsidiaries of Standard Life plc and some external providers.

One of the main benefits of an annuity is that you can build in options to make it really suit your needs and work for you in retirement.

Options to consider include:

• How often the payments are made - this could be monthly, every three months, every six months or every year and depends on the value of your fund

• When your payments will start - you can have them paid in advance so you'd get the first payment as soon as the annuity was set up, or in arrears where the first payment would be made one 'payment period' after we set up your annuity. For example, if your payments are to be made monthly in arrears, the first payment would be one month after your annuity was set up

• An income that increases each year by a fixed percentage, up to 8.5% per annum

• An income that keeps pace with inflation by increasing and decreasing in line with the Retail Prices Index (RPI). Be aware that RPI can go down as well as up, so your income could go down

• An income for your wife, husband or civil partner who would still get an income if you died before them

• An income for another adult who is financially dependent on you, children or a child with special needs. We may be able to help you set up an income for them if you die first

• Guaranteed payments for a set period of time. This means that if you die within that time, payments will continue to the end of the guarantee period. You can choose a guarantee period of up to 10 years for an ordinary pension fund (this will be the value of payments made by you or your employer)

Bring together all your pensions

You can combine more than one pension plan – from Standard Life and other companies – in our Immediate Vesting Personal Pension. This would give you one source of income for the rest of your life.

Need help tracking down old pension plans? The Pension Tracing Service could help.

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.

We'd always recommend getting advice before transferring pensions to make sure that you're not losing out on any benefits. Call Standard Life Direct or speak to your financial adviser.

Investing a lump sum in an Immediate Vesting Personal Pension

As long as you're in employment and subject to some limits, the government lets you invest up to 100% of your earnings in a pension plan in any one tax year – you'll get tax relief too. So for every £100 you invest, the Government adds £25 of tax relief to your pot.

Higher or additional rate tax payer? You may be able to claim additional tax relief through your tax return.

If you're eligible, you'll get tax relief on any cash lump sum you invest in an Immediate Vesting Personal Pension (within limits). You won't get additional tax relief if you choose to transfer your pension funds held elsewhere. Remember, you would already have received tax relief when you first invested in these plans.

Tax rules and legislation may change. The value of tax relief may change and will depend on your financial circumstances. The information we have given is based on our understanding of law and current HM Revenue & Customs practice.

You can invest between £5,000 and £250,000 in the Immediate Vesting Personal Pension to give you a lifetime annuity, which you can adapt to suit your needs. You can normally take up to 25% of your fund as a tax-free lump sum.

If you want to invest less than £5,000, you can pay £2,880 into our Immediate Vesting Personal Pension Select – the tax man makes this up to £3,600. It's a no frills plan which gives you a tax-free lump sum of £900 and an annual payment for life.

Pension pot value more than £50,000? Our active money SIPP could offer you greater flexibility.

Are you old enough?

You cannot buy an annuity before age 55.

Tax

If you buy your Immediate Vesting Personal Pension with a cash lump sum, we'll add basic-rate tax relief to that payment. If you're a higher or additional rate tax payer you may be able to claim back more tax relief through your tax return.

Tax relief may be altered and the value to you depends on your financial circumstances.

Apart from the tax-free lump sum, the income you receive from your annuity will be taxed under the Pay as You Earn (PAYE) system.

You can find out more on the HM Revenue & Customs website.

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 rules and legislation may change. The value of tax relief may change and will depend on your financial circumstances. The information we have given is based on our understanding of law and current HM Revenue & Customs practice.