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Client guide
Your CanRetire Guide
Helping you retire with confidence
Getting ready for retirement?
The future starts here. Action-packed or laid-back and relaxed, whatever your plans,
we can help you retire with confidence. Unlike previous generations, people
approaching retirement today have a wider choice than ever before. There are more
options for where you keep your savings and, more importantly, how you access them.
Retirement should be about doing things your way
The CanRetire range of options
About this guide
The flexible CanRetire range gives you many options, allowing
you to choose one or any combination of the products available
to tailor a retirement solution to meet your specific needs. So
whether you want to take a cash lump sum, receive a regular
income, or even both, you can with CanRetire.
Over the following pages we’ll show you how you can save for
your retirement with Canada Life and generate a retirement
income. With CanRetire you can tailor your choices to give you
a personalised plan of action that could meet your needs, both
now and in the future.
And if you’re not thinking about retiring just yet, you can
consolidate various pension pots and carry on saving until
you’re ready.
You can find out more about Canada Life and your retirement
options at www.canadalife.co.uk. You can also talk to your
professional adviser or contact Canada Life directly to request a
personalised illustration. Your professional adviser can give you
help and guidance. Don’t worry if you don’t have an adviser, you
can find one near you at www.unbiased.co.uk
Pension Wise
Before you make any decisions, why not take advantage of the
government’s ‘Free Guidance Guarantee’? You can access free
guidance face-to-face from the Citizens Advice Bureau, online or
over the phone from the Pension Advisory Service. Find out more
from www.gov.co.uk/pensionwise.
Some recent changes you should be aware of
In the 2014 March Budget, the Chancellor announced radical
changes to pension regulations with the freedom to choose how
to receive retirement income from your pension savings plans. It
is important to understand these changes when considering your
options.
•A
ny withdrawals taken in excess of the Pension
Commencement Lump Sum (PCLS) will be subject to tax at
your marginal rate. PCLS is the amount HM Revenue and
Customs allows you to take tax free – normally 25% of your
uncrystallised pension savings.
•A
new Money Purchase Annual Allowance (MPAA) limit of
£10,000 will be triggered by any withdrawals from defined
contribution pensions (down from £40,000). The MPAA is the
amount you or your employer can contribute to schemes that
belong to you.
2 Your CanRetire Guide
Uncrystallised Funds Pension Lump Sums
Taxation
Uncrystallised Funds Pension Lump Sums (UFPLS) are the new
way to access some or all of your pension savings without doing
so through a drawdown or buying an annuity, (the ‘uncrystallised’
part means funds which have not yet been drawn from the
pension plan). The following rules apply when using the new
UFPLS freedoms:
It’s important to understand how income will be taxed as this
will vary depending on how you choose to receive an income in
retirement.
• Payments can be taken on a regular or ad hoc basis.
• Tax-free lump sum - 25% of amount withdrawn if UFPLS.
•E
ach payment includes a 25% tax-free element with the
balance taxable as income at your marginal rate.
Death benefits
•E
ach payment uses up part of the lifetime allowance,
currently £1.25M.
•A
ny withdrawals will reduce the amount you can pay into a
money purchase pension each year to £10,000 (This
allowance is called the Money Purchase Annual Allowance).
• The balance of your investment remains uncrystallised.
25%
UFPLS – Example
TAX FREE
75% TAX25%
FREE
AT MARGINAL RATES
75%
AT MARGINAL RATES
£100,000
PENSION POT
• If you cash in the whole pot, you would
receive one lump sum made of:
– 25% Tax Free = £25,000
– 75% Taxable = £75,000
less income tax (at marginal rates)
£100,000
£100,000
PENSION POT
Pension Pot
• Marginal tax will be payable on income from all products.
• Tax-free lump sum - 25% of overall savings if PCLS.
On death, the entire fund can be passed to your nominated
beneficiaries, who have the freedom to utilise the funds as
they choose such as take a lump sum, buy an annuity or invest
in a drawdown plan.
The rules relating to tax rates applicable on death have also
changed:
• If an individual dies before age 75, the beneficiary can take
the entire pension fund as a lump sum or as an income
(to buy an annuity or to buy income drawdown) tax-free.
• If a beneficiary dies aged 75 or over, the beneficiary has
three options, each with its own tax treatment:
–
Take a lump sum – taxed at 45% (beneficiary’s marginal
income tax rate from 2016/17)
–
Regular income (annuity) – taxed at the beneficiary’s
marginal rate
–Income drawdown – taxed at the beneficiary’s marginal rate
• If you took it all in four lump sums:
YR4
YR1
YR3
YR2
YR4
YR3
YR1
YR2
Annual lump sums 25% Tax Free
75% Taxable
YR1 – Take £25,000: £6,250 £18,750
YR2 – Take £25,000: £6,250 £18,750
YR3 – Take £25,000: £6,250
£18,750
YR4 – Take £25,000: £6,250 £18,750
TOTAL
£25,000 £75,000
Your CanRetire Guide 3
New pensions options – April 2015
As we approach retirement we will all have different requirements depending on our individual circumstances.
For example, you may want to receive a guaranteed income for the rest of your life, alternatively you may want
enough income to cover your ongoing bills, whilst keeping the remainder fully invested. The table below highlights
a few objectives and shows how the CanRetire range of products can help you achieve these. Of course, you can
blend the various options to suit your circumstances.
Please note, however, the scenarios below are just for illustrative purposes and should not be considered advice.
Saving towards retirement
Taking a retirement income
I want to
consolidate my
various pension
pots and have
the flexibility to
continue/start
saving for my
retirement
I want to cash in
my pension pot,
or to take
ad hoc amounts
I want to have
the control to
decide the
amount and
frequency of any
payments I take
I want to
receive a regular
guaranteed
income,
payable for life
I want to receive
a regular,
guaranteed
income payable
for a fixed term,
with a lump sum
available at the
end of the
period
Accumulation/
consolidation
UFPLS
Flexi-access
drawdown
Lifetime
annuities
Fixed Term
annuities
Pension
Investment
Plan
Pension
Investment
Plan
Flexible
Drawdown
Plan
Lifetime
Annuity
Plan
Fixed
Term Income
Plan
All funds will
stay invested
The first 25% of
each withdrawal
is tax-free, the
remaining 75%
is taxed at your
marginal rate
At outset you
can take a 25%
tax-free lump
sum. All income
payments
thereafter will
be taxed as
income
Take up to 25%
as a tax-free
lump sum.
All income
payments
thereafter will
be taxed as
income
Take up to 25%
as a tax-free
lump sum. All
income
payments
thereafter will
be taxed as
income
Your Money
Purchase
Annual
Allowance is
unaffected –
meaning you
can invest up to
£40,000 each
year into a
pension savings
scheme
Your Money
Purchase
Annual
Allowance is
reduced,
meaning you
can only invest
£10,000 each
year into a
pension savings
scheme
If an income is
taken your
Money Purchase
Annual
Allowance is
reduced,
meaning you
can only invest
£10,000 each
year into a
pension savings
scheme
Your Money
Purchase
Annual
Allowance is
unaffected –
meaning you
can invest up to
£40,000 each
year into a
pension savings
scheme
Your Money
Purchase
Annual
Allowance is
reduced,
meaning you
can only invest
£10,000 each
year into a
pension savings
scheme
4 Your CanRetire Guide
Before you retire
Do you want to consolidate all of your pension
pots in one place for simplified administration
and a single charge?
You can
with the CanRetire Pension Investment Plan
If you’re looking to consolidate your existing pensions into one
place and want to continue making contributions.
If this sounds like you, turn to page 6 for more information.
When you’re ready to retire
Want to stay invested
and take your pension
in lump sums?
Want to invest and draw
a regular income with
a fixed, guaranteed lump
sum after a fixed term?
Want to take your
pension as a guaranteed
lifetime income?
You can
You can
You can
with the CanRetire
Flexible Drawdown Plan
with the CanRetire Fixed
Term Income Plan
with the CanRetire
Lifetime Annuity
This may suit you if you don’t want a
long-term income product but need
access to your money and want the
potential for growth.
This could be useful if you plan to
continue working full or part time,
and want to top-up your income while
keeping some money invested until
you fully retire from work. You can
also keep saving.
This could be a good choice if
you want the absolute certainty
of a guaranteed income for the
whole of your retirement.
If this is something you’re interested
in, find out more on page 8.
If this is what you’re looking for,
go to page 12 for more information.
If this seems like something
that would suit you, turn to
page 10 to find out more.
Your CanRetire Guide 5
CanRetire
Pension Investment Plan
A straightforward option, giving you the flexibility
to continue saving
The CanRetire Pension Investment Plan (PIP) is a personal
pension that gives you a simple way to bring all your retirement
savings together in one place. If you’ve worked in several
companies, you may have built up a number of pension pots
over the years. It’s easy to transfer your existing pension savings
into our Pension Investment Plan, and keep them growing taxefficiently until you’re ready to access them.
Tax treatment
The Plan also allows you to start saving or continue making
contributions towards your retirement either by yourself or
through your employer. Your savings will be invested taxefficiently in a range of investment funds tailored to suit you,
which you can change whenever you want to.
•S
hould you die before the age of 75 while invested in the
PIP, the fund would be returned free of tax to your nominated
beneficiary.
With just one plan to review, simplified administration and one
set of charges to manage, it is easy to keep track of your pension
plan. And thanks to our competitive, transparent charges we
may even help you save money.
•S
hould you die at age 75 or over, the fund would be returned
to your nominated beneficiary, however it would be subject
to tax of 45%. Depending on how any benefit is taken, any
subsequent income taken from the fund would be taxed at the
beneficiary’s marginal rate of income tax.
• T he beneficiary can choose what they do with the fund such as
take a lump sum, invest it in an annuity or drawdown.
POT D
£10,000
When you choose to retire
•U
ncrystallised Fund Pension Lump Sums (UFPLS): Withdraw
a one-off lump sum or as a number of ad hoc withdrawals to
suit your needs. 25% of each payment will be tax-free with the
remainder subject to income tax at your marginal rate.
– F
ixed Term Income Plan, where you can receive a regular
guaranteed income payable for a fixed term, with a lump
sum available at the end of the period
– Lifetime Annuity, where you can receive a regular
guaranteed income for life
6 Your CanRetire Guide
POT F
£50,000
ONE PENSION POT
£100,000
•P
ension Commencement Lump Sum (PCLS): POT
you
E can take
£20,000
POT C
POT A
up to 25% of your pension £5,000
savings
as
a tax-free lump sum. CONSOLIDATION
£10,000
With the remainder you can invest in any of the following:
POT D
£10,000
Existing pension pots:
• Monies in various pension pots
• CONSOLIDATION
Difficult to keep trackONE
of PENSION POT
• Many different charging £100,000
structures
• Many smaller pot values
CONSOLIDATION
Your options are:
POT C
£10,000
POT E
£20,000
POT B
£5,000
POT E
£20,000
POT F
£50,000
POT A
£5,000
• Choose an investment strategy that’s right for you.
POT B
– Flexible Drawdown Plan,£5,000
where you
the amount
POT D can choose
POT F
£10,000
£50,000
and frequency of any payments you take
POT C
£10,000
Pension Investment Plan – consolidation into one plan
• Consolidate all your existing pension pots under one plan.
•M
ake contributions to the plan or get your employer to
contribute to the plan.
POT A
£5,000
With the CanRetire Pension Investment Plan, you can:
Death benefits
POT B
£5,000
Before you retire
Uncrystallised Fund Pension Lump Sums (UFPLS): 25% of any
lump sum withdrawals will be tax-free, with the remaining 75%
taxed at your marginal rate.
ONE PENSION POT
£100,000
One consolidated pension pot (PIP):
• All savings in one pot
• Easy to manage
• One charging structure
• Larger fund size to invest with
• Focused investment strategy
Could the PIP be right for
me? Yes, if you want to…
Combine several pensions into
one easy-to-manage plan with the
convenience of having everything
in one place.
Help your pension savings grow
in a highly tax-efficient way.
Take advantage of a wide range
of investment choices, switching
funds over time if you want to.
Have flexibility and choice over
when and how you take your
savings, from age 55.
Meet John
He is 52 years old and has worked most
of his life as an electrician. Over the
years he has been self-employed and
employed. He has saved into a number
of pension schemes and been a
member of company pension schemes
through at least three different firms he
has worked for. As a result he has lost
track of what he has saved, where it is
held and how it is managed.
John’s objective
John wants to consolidate his pension
savings into one place so he can better
control his pension pot and have more
say in where it is invested. He is not
sure when he will officially ‘retire’ as he
still enjoys working, although he plans
to slow down and spend more time with
his wife once the mortgage is paid off
in five years time and his son can take
over his business.
His adviser manages to trace all of his
pension holdings and recommends that
John consolidate all of these savings
into the CanRetire Pension Investment
Plan. This would give him a number of
key benefits:
•A
bility to see all his pension savings
in one place.
• Invest the money in funds that are in
line with John’s risk appetite.
•R
educe the administration costs as
some of his savings are in higher
charging plans.
Summary
1. The CanRetire Pension Investment
Plan will help John to ensure his
entire pension savings are invested
in funds that suit his own attitude
to risk.
2. J ohn can save money because the
Pension Investment Plan has a lower
charging structure than some of his
other pension schemes.
3. J ohn will be able to make an
informed decision on his retirement
options when it is time to start
thinking about an income as all his
savings are in one place.
•A
llows John to retire when he
wants to.
Your CanRetire Guide 7
CanRetire
Flexible Drawdown Plan
A great choice if you want to keep your income options open
The CanRetire Flexible Drawdown Plan (FDP) allows you to
withdraw cash lump sums from your pension on either a regular
or ad hoc basis, giving you flexible access to your savings.
You can withdraw all your savings at any time if required. Any
remaining savings will be invested and you can access them
whenever you want.
The Plan allows you to withdraw income from your savings taxefficiently, while giving you complete control of how your pension
savings are invested.
How does it work?
With flexi-access drawdown, any tax-free cash element must be
taken at outset, with the remainder of the fund moved into the
Flexible Drawdown Plan where you can withdraw part or all of
your money with full control over the timing and amounts.
Death benefits
•S
hould you die before the age of 75 while invested in the
FDP, the fund would be returned free of tax to your
nominated beneficiary.
•S
hould you die at age 75 or over, the fund would be returned
to your nominated beneficiary, however it would be subject
to tax of 45%. Depending on how any benefit is taken, any
subsequent income taken from the fund would be taxed at the
beneficiary’s marginal rate of income tax.
• T he beneficiary can choose what they do with the fund
such as take a lump sum, invest it in an annuity or drawdown.
Flexi-Access example
Your annual allowance, which is the amount of money you can
contribute to a pension scheme within a tax year, will also be
reduced going forward to £10,000 gross each tax year.
How to take an income
You have a choice of income options:
•A
rrange to have a regular amount of income paid at regular
intervals for example monthly, quarterly, half yearly or yearly,
25%
75%
TAX FREE
25% Tax Free
75%
• Leave invested
• Take ad hoc withdrawals
• Take a regular income
( income withdrawals
taxed at marginal rates)
• Withdraw your savings on an ad hoc basis,
• Consider purchasing an annuity at some point in the future.
Tax treatment
• Income tax at your marginal rate applies to income drawn from
the Plan.
• Tax free lump sum - 25% of overall savings if PCLS.
8 Your CanRetire Client Guide
For information on the fund choices available for Flexible
Drawdown Plan, please refer to our ‘CanRetire Investment
Guide’ or the Fund Information page on our website,
www.canadalife.co.uk
Could the FDP be right for
me? Yes, if you want to…
Keep your options open.
Access all your tax-free cash
at the start if needed.
Withdraw as little or as much as
you want from your savings as
often as you want.
Avoid paying higher-rate tax if you
withdraw your savings gradually.
Keep remaining savings invested for
tax-efficient growth.
Enjoy a choice of income options:
– Arrange to have a regular amount
of income paid at regular intervals –
monthly, quarterly, half-yearly
or yearly.
– make ad hoc withdrawals.
– Consider purchasing an annuity
at some point in the future.
Meet Helen
Helen is 66 years old and has spent
the last 22 years working as a Legal
Secretary at a local law practice. She
has always enjoyed her work and
doesn’t plan on retiring for at least a
few more years.
Helen plans to do a lot more travelling
with her partner, Peter, over the next
five years while they are both relatively
healthy and active. She would also
like to help her only daughter, Alexa,
with a deposit on her first home and
understands that she should be able
to take out some of the money she has
saved in her pension to do this. She
has managed to save regularly into
her personal pension for the last 20
years and has built up, with the help
of contributions from her employers, a
fund of £185,000.
Helen’s objective
Helen wants to take out a chunk of
money to help out with her daughter’s
deposit for a new flat as well as to fund
the cost of her travels.
She understands that she can take as
much as she wants out of her pension
savings but is not sure what would be
the most efficient way of doing this or
what the consequences might be. She
still wants to remain invested so her
money can continue to grow.
Her adviser explains that there are a
number of ways that Helen can draw
an income:
Through her existing CanRetire Pension
Investment Plan, she can make lump
sum withdrawals as often as she likes.
25% of each withdrawal is free of tax
and the rest is charged at Helen’s
marginal rate of income tax.
This would allow Helen to:
Alternatively, she can take up to 25%
of her pension savings as a tax-free
lump sum and move the rest into a
CanRetire Flexible Drawdown Plan.
This would give Helen up to £46,250
tax-free, which she can then use to
help Alexa and fund her travelling
costs. Helen can then decide how the
remaining £138,750 will be invested
by choosing from the range of funds
available with Canada Life (see the
CanRetire Investment Guide for more
information).
This would give Helen a number of
key benefits:
•A
bility to take a significant lump sum
tax free
• Make tax-efficient withdrawals as and
when she wants to
•A
llows Helen to remain invested in
funds of her choice
• Remain invested in funds of her
choice
•A
s long as she does not draw
money from the CanRetire Flexible
Drawdown Plan, she can continue
to save up to £40,000 each year
towards her pension
• Helen will only be able to save up
to £10,000 each year towards her
pension by choosing this option
Your CanRetire Guide 9
CanRetire
Fixed Term Income Plan
A combination of freedom and the security
of a guaranteed income for a fixed term
You could choose the CanRetire Fixed Term Income Plan (FTIP)
if you want the ability to secure a fixed income over a set period
(between one and 20 years) that suits you. It also allows you to
plan ahead with the benefit of knowing what you will receive at
the end of the term you choose.
It can be a good way to keep control over your short and longterm retirement plans. It could make sense for you if you will
need a lump sum at some point in the future but for now you’d
like a set income, or you’re planning to phase your retirement by
working part time and need to top up your income.
How does it work?
• Withdraw the GMV as a cash lump sum.
• Purchase another Fixed Term Income Plan.
• Purchase a flexi-access drawdown plan, such as the CanRetire
Flexible Drawdown plan, which allows you to gradually take
cash lump sums from your pension savings.
• Purchase a guaranteed income for life, such as the CanRetire
Lifetime Annuity.
• Of course, you can opt for any combination of the above.
Tax
When setting up your plan, you have a number of options:
• You can choose the duration of the fixed term at the start of
the plan.
• You can choose how much income you want to receive each
month over the fixed term – the guaranteed maturity value
(GMV) will be set for you.
• You can choose how much money you want to receive when
the plan reaches maturity – this will determine how much
income you can receive each month.
• Alternatively, you can choose the income you want to receive
and the GMV at the end of the term, and will can advise how
much you need to invest.
• Income tax at your marginal rate is applied on income drawn
from the Plan.
• Tax free lump sum - 25% of overall savings if PCLS.
Death benefits
• Should you die before the age of 75 while invested in the FTIP,
a lump sum equal to the initial investment, less any payments
made would be returned free of tax to your nominated
beneficiary.
• Should you die at age 75 or over, a lump sum equal to the
initial investment, less any payments made would be returned
to your nominated beneficiary however it would be subject
to tax of 45%. Depending on how any benefit is taken, any
subsequent income taken from the fund would be taxed at the
beneficiary’s marginal rate of income tax.
• The beneficiary can choose what they do with the fund such as
take a lump sum, invest it in an annuity or drawdown.
Fixed Term Income Plan
PLUS
BUYS
£100,000
Pension Pot
At the end of your chosen term you can:
£5,000 £5,000 £5,000 £5,000 £5,000
Year 1 Year 2 Year 3 Year 4 Year 5
FIXED TERM – 5 YEARS
£80,000
Guaranteed
Maturity Value
(GMV)
How it works
• You invest £100,000 pension
pot for 5 years
• You receive an income of
£5,000 each year for five years
(£25,000 over fixed term)
• At end of fixed term, you receive
a guaranteed maturity value of
£80,000
Note: The figures used are for
illustrative purposes only
10 Your CanRetire Client Guide
Could the FTIP be right for
me? Yes, if you want to…
Avoid committing your savings
to buying an annuity, but you also
want some security.
Avoid taking on any investment risk.
Access your tax-free cash, and
have a guaranteed income for
a term that suits you.
Have certainty and security over
a set number of years.
Keep your options open.
Meet Monica
Monica has always been careful with
money. As a hairdresser she has
accrued a reasonable pension pot of
£64,000, by saving as much as she can
and by not taking many risks. At age 62
and fair health, she understands that
she does not need to tie herself into a
lifetime income just yet, but she equally
feels uncomfortable to draw money
from the savings she has worked hard
to generate. She values certainty above
growth potential, and she knows that a
lifetime annuity will give her exactly that
certainty of income.
Monica’s objective
Monica wants to semi-retire and work
two days a week instead of five. She
has monthly expenditure of £1,350
and has calculated that with her state
pension of £90 per week and her
reduced wages, she will have a shortfall
of around £350 per month. She wants
flexibility to do what she wants in her
spare time so doesn’t want to be tied
down to a lifetime rate just yet.
Monica’s adviser explains that with
the CanRetire Fixed Term Income Plan,
she can set a level of income she
wants over a term she wants and get a
guaranteed value at the end that she
will know from day one. She thinks it
is too good to be true, but he explains
that this plan is as safe as a lifetime
annuity and designed to give people
like Monica the guaranteed income she
needs but without tying her in for life.
At the end of the term, she can use
the guaranteed value to buy another
term and income level, move it to a
flexi-access drawdown plan or buy a
lifetime annuity.
Your CanRetire Guide 11
CanRetire
Lifetime Annuity Plan
The financial certainty of a guaranteed, regular income for life
When you retire, you can use your pension savings to buy a
CanRetire Lifetime Annuity (LTA), which will provide you with a
secure, regular income for the rest of your life. You can use your
entire pension pot to buy the annuity. Or, you can take up to
25% of your total pension savings as a tax-free lump sum, and
use the remaining balance to buy the annuity.
You don’t have to buy an annuity from the same company
you saved for your pension with, and you have the right to
shop around different pension providers for the best deal.
Once you’ve chosen your lifetime annuity, however, you
can’t change your mind. Under current regulations this is
a one-off decision, so it’s important to get it right.
With our CanRetire LTA, you’ll benefit from a guaranteed income
for the rest of your life. Having that kind of security could be very
reassuring, especially if you like to know exactly where you stand
with your money. Having that guarantee could make it easier for
you to budget and plan ahead with confidence.
Tax
• Income tax at your marginal rate is applied to income from
the annuity.
• Tax free lump sum - 25% of overall savings if PCLS.
12 Your CanRetire Client Guide
Death benefits
Value Protection is available as an option, which means you
could have some of your money returned as a death benefit.
Should you die before the age of 75 while invested in the LTA,
the capital amount less any income already paid to you would
be returned free of tax to your nominated beneficiary.
The beneficiary can choose what they do with the fund,
such as take a lump sum, invest it in an annuity or drawdown.
Why choose a CanRetire LTA?
Currently, over 400,000 of our customers are receiving a
retirement income from our CanRetire Lifetime Annuity. Our
competitive annuity rates are among the best on the market
– and, depending on your health and lifestyle, you may
qualify for an enhanced annuity which provides an additional
income.
Our expertise is matched by our award-winning service. And
as an experienced provider of annuities, we have a long
track record in the UK stretching back to 1903.
Could the LTA be right for
me? Yes, if you want to…
Benefit from the certainty of a
guaranteed, regular income for the
rest of your life, paid on a monthly,
quarterly, half-yearly or yearly basis.
Have the option to increase your
income each year.
Have the choice of providing an
income after your death to your
spouse, civil partner or dependant(s)
if you were to die before them.
Protect your savings capital, so that on
your death the capital amount
(less the income which has already
been paid to you) can be passed
on to your chosen beneficiaries.
Meet Nigel
He is 62 years old, married and runs his
own construction business. He likes to
take the odd risk with his investments
and has accumulated a pension pot
of £205,000. He has also managed
to build a portfolio of three properties
that he rents out. These represent his
retirement income.
Nigel has a relatively comfortable
lifestyle. He plays golf with his friends
at least once a week and enjoys
spending more time with his six young
grandchildren. He admits to being
slightly overweight and ever since the
health scare last year, he has tried to
cut down on his smoking habit. He is
concerned that if he stops working,
his lifestyle may have to change. He
is particularly worried about what
might happen if any of his properties
are unoccupied and he has no rental
income.
Nigel’s objective
Nigel wants to ensure he has a
guaranteed income that will last for his
lifetime and that of his wife. This will
allow him to use his property income
to do the things he wants, including
getting his golf handicap down!
His adviser suggests that Nigel look
at his minimum level of monthly,
expenditure (essential bills and food for
example) and then look for a lifetime
annuity that will give him that income
for life. This way he’ll know he has
enough to live on, whatever happens.
Given that Nigel is a smoker, his adviser
is confident that he should be able to
get an enhanced annuity income.
Nigel’s level of expenditure
£900 each month
State Pension
£105 a week
£420 each month
CanRetire Lifetime Annuity (enhanced)
£7,533 each year £507 each month
Please note that the above figures are for
illustrative purposes only.
Summary
1. The CanRetire Lifetime Annuity will
help Nigel to ensure he has the
income he needs for the rest of his
life, no matter what happens to the
economy.
2. Because of his physical health
and lifestyle, Nigel qualified for an
enhanced income.
3. If Nigel wants to ensure he leaves an
income for his wife, he can choose a
lifetime annuity on a joint life basis
which will continue to pay an income
until both he and his wife die.
Your CanRetire Guide 13
Your CanRetire options
at a glance
Charges
Pension Investment
Plan (PIP)
Flexible Drawdown
Plan (FDP)
Fixed Term Income
Plan (FTIP)
Lifetime Annuity
Plan (LTA)
Minimum age
18
55
55
55
Maximum age
None
None
90
90
Minimum transfer value
£5,000 before
any adviser charge
£10,000 before
any PCLS and/or
adviser charge
£10,000 before
any adviser charge
£10,000 before
any adviser charge
Number of funds
available
Approx 150
Approx 150
NA
NA
Maximum funds allowed
per investment
10
10
NA
NA
Minimum withdrawal
amount
Any amount
Any amount
NA
NA
Charges for each
withdrawal
Free
Free
NA
NA
Charges for switching
None
None
None
None
Allocation rate
100%
100%
100%
100%
One-off set-up charge
None
None
None
None
Annual management
charge
Please refer to the
CanRetire Product
Charges Summary
Please refer to the
CanRetire Product
Charges Summary
None
None
Investment
management charge
Depends on
selected fund
Depends on
selected fund
NA
NA
Exit or penalty charges
None
None
No exit available
during term
No exit available
Adviser charges
Initial, ad hoc and
ongoing adviser
charges can be
accommodated
Initial, ad hoc and
ongoing adviser
charges can be
accommodated
Initial adviser
charge only
Initial adviser
charge only
Transaction charges
None
None
NA
NA
You can obtain full details on these products by reading the CanRetire Key Features Documents and investment guide, which your
professional adviser can provide and discuss with you. You can also find out more by visiting www.canadalife.co.uk.
14 Your CanRetire Guide
How we’re helping a chef
get a taste for retirement
“I can’t quite believe I’m only a couple of years away from retirement. I certainly
don’t feel it! I’d always promised myself that when I reached my 60s I’d ease up
a bit and go from five days a week, down to three. I’m a chef, so it’s pretty hectic.
But to be honest, while I’d love a quieter life, the drop in my monthly take-home
pay is a bit of a worry. My wife Helen might have something to say about it as well!
She retired last year and gets quite a good income from her pension, but we’re
still paying off the mortgage and we like our creature comforts like nice holidays
and good food, so our outgoings are fairly high.”
“I’m not ready to fully retire yet – I still love what I do. But I’d like to know what my
options are before I have to make a decision next year when I reach state pension
age. Right now, I’ve got just over £100,000 in a personal pension and I’m still
paying in each month. If I could clear the last of the mortgage, and my monthly
salary came out the same as before, that would be ideal!”
Andrew Jeffrey
Nottingham
What are Andrew’s options?
He could transfer his pension pot to
the CanRetire Pension Investment
Plan (PIP)
A three-year CanRetire Fixed Term
Income Plan (FTIP) is another option
to consider
He could then withdraw £5,000 as a
lump sum each year for the next three
years, with £1,250 being paid tax-free.
The balance can stay invested in the PIP
until Andrew is ready to retire. He can
also review his situation when his state
pension becomes available at age 65.
If Andrew has a cautious attitude to risk,
he could withdraw money from the PIP
to purchase a three year CanRetire FTIP,
using his tax-free cash entitlement (25%
of the amount withdrawn) to top up his
fixed term income. This would reduce
the amount of savings he needs to
buy the FTIP.
He could transfer to a CanRetire
Flexible Drawdown Plan (FDP)
He could take the full tax-free entitlement
of £25,000, using some of it to help pay
off what’s left on his mortgage and the
rest to boost his income over the next few
years. The remaining £75,000 could stay
invested in the FDP for income over the
longer term.
If Andrew wanted to take all his taxfree cash entitlement
He could use this to boost his income
requirements for the next three years,
moving the balance of his savings to the
CanRetire FDP, and choosing to take zero
income so that all his remaining savings
are still intact and invested.
He could also choose to withdraw all
his savings
He could do this immediately, or by using
the FDP and a low-risk fund, he could
withdraw over a period of time. He would
need to be make sure that withdrawing
all his savings in one go did not increase
his income to a level where he’d be paying
higher-rate tax.
Remember that investments can
fall as well as rise. Always seek
advice from your professional
adviser about risk if you are
considering making an investment.
Your CanRetire Guide 15
Consider what to do next
We hope we’ve given you a good
idea of how we can help you plan
for your retirement, and make the
most of your retirement income.
Choosing what to do with your
hard-earned pension savings is the
biggest decision you’ll have to make
as you get closer to retirement. But
we’re here to help make it as easy
as possible for you to retire with
confidence.
Our handy checklist lets you see
what needs to be done next. It’s
an easy way to make sure you’re
asking the right questions, so you
make the right choices and get the
best from your pension pot
in the run-up to your retirement:
Seek professional advice
If you haven’t already, arrange
to meet your professional adviser
and take along all the information
you have relating to your pensions
and investments.
Gather together important
documents
equest up-to-date statements for all
R
your personal and company pensions.
sk for an up-to-date forecast of your
A
state pension at www.direct.gov.uk
L ocate any lost pensions through
The Pensions Tracing Service at
www.direct.gov.uk
16 Your CanRetire Guide
Look at your living costs
T hink about what you want to do when
you retire. Do you have hobbies, or
certain goals you’d like to achieve?
ompare your pension forecasts to
C
how much your living costs will be
in retirement.
Review your retirement
savings
Include any investments and
savings when calculating your
retirement income.
lug any gaps in your state pension,
P
to make sure you receive the full
basic state pension.
heck that your pension investments
C
match the risk you’re prepared to take
with your money.
oost your pension by increasing your
B
contributions and/or adding lump sum
payments.
T ry to take advantage of any unused
pension tax allowance. Current rules
allow you to carry unused allowances
forward for three years.
Think about consolidating
your pension plans
onsider consolidating your pensions
C
to make it easier to manage your
retirement savings. Before you
consolidate, check you’re not losing
out on any benefits or incurring any
charges.
Consider all your options
T hink about how you’d like to take
your retirement income – an annuity
provides a guaranteed regular income
for life, or you could go for the more
flexible option of income drawdown.
If you plan on buying an annuity,
an enhanced annuity could boost
your income if you have any health
or lifestyle issues or certain medical
conditions.
L ook into other ways you could boost
your retirement income – perhaps by
working part time.
Don’t forget the essentials
heck what will happen to your
C
pension if you die.
ssess the value of your estate for
A
inheritance tax purposes and consider
ways to reduce your liability.
rite a Will or make sure your existing
W
Will is up to date.
Why Canada Life?
At Canada Life, we believe that helping customers to retire
doesn’t have to be a long, complicated and expensive process.
And that’s why so many people come to us
You see, we’ve been providing
retirement solutions for our
customers for a long time. We’ve
actually been in the UK since
1903, looking after the retirement,
investment and protection needs
of customers and companies alike.
And, while things have changed a
great deal in the world since then,
what still remains is the need
for simple, cost-effective income
solutions, that won’t cost you the
earth – or your retirement.
With us, you know you’ll get a
fair deal and great service.
Treating customers fairly is a big part of
who we are. And whatever your retirement
needs, we have a wide range of options
that are simple, easy to manage and give
you value for money.
We don’t push any costly added extras
onto you that eat into your retirement pot.
That is one of the reasons you’ll regularly
see us in the best-buy tables in the
newspapers.
We’re here to help you get ready for your
retirement with confidence, by making
things clear and straightforward. And our
flexible range of products means you can
tailor your retirement income to suit you.
DID YOU KNOW?
TOP 10
We are part of Great-West Lifeco, one
of the top 10 largest life insurance
organisations in the world.
OVER 100 YEARS
We’re one of the largest providers of
annuities in the UK and have been
going for over 100 years.
OVER £589BN
We have over £589bn of consolidated
assets under management.
Visit www.canadalife.co.uk
to find out more.
Your CanRetire Guide 17
What you can expect
from Canada Life
Financial strength, support and great service
At Canada Life we believe in
being here to support you through
retirement, so we make it our
mission to make the process of
dealing with us as easy and as
smooth as possible. We’re truly
proud of the fact that we have a
great reputation for providing high
standards of service across all
parts of our business.
We’re also proud of our heritage and our
financial strength. We’ve been around
for a long time. In fact, we were founded
in 1847 in Canada, making us the oldest
Canadian life assurance company.
We then began working here in Britain
in 1903 – meaning we’ve been here for
over 100 years.
Canada Life is part of Great-West Lifeco
Inc., one of the largest Canadian life and
health insurance companies. We have
over £589bn of consolidated assets under
management.
Great-West Lifeco serves several million
people worldwide, providing a wide range
of retirement savings and income plans,
as well as comprehensive protection
contracts for individuals and families.
Rest assured we’re serious about protecting your money
Canada Life is regulated by the Financial Conduct Authority, an independent
financial regulator.
But more than that, we’re also covered by the Financial Services Compensation
Scheme. This means that should we become insolvent or we can’t fulfil our
obligations, you may be entitled to compensation.
18 Your CanRetire Guide
Your CanRetire Guide 19
Getting in touch
Your professional adviser will be able to answer any questions you
may have about saving for your retirement, and your retirement
options with Canada Life.
You can also contact us in the following ways:
0845 606 0708
[email protected]
www.canadalife.co.uk
Customer Services Team
Canada Life Limited, Canada Life Place, Potters Bar, Herts EN6 5BA
Canada Life Limited, registered in England no. 973271.
Registered office: Canada Life Place, Potters Bar, Hertfordshire EN6 5BA.
Member of the Association of British Insurers.
Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority. Canada Life International Limited and CLI
Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man
Insurance and Pensions Authority. Canada Life International Assurance Limited is authorised and
regulated by the Central Bank of Ireland.
ID6685 – 315R