fresh approach built to last · A Self Invested Personal Pension (SIPP) is a savings product which...
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fresh approach, built to last
The Forthplus SIPP
Key Features
The Financial Conduct Authority is the independent financial services regulator. It requires us, Forthplus Pensions Limited, to give you this important information to help you to decide whether The Forthplus SIPP is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference.
This Key Features Document
This document explains the key features of The Forthplus SIPP (which is a self invested personal pension), important information which you should consider. It has a range of frequently asked questions and explains who is involved in providing you with the pension, and what regulations and protections cover this product. You should take the time to read this document and consider its content before you complete your application to The Forthplus SIPP.
If you have any questions or require clarity on any part of this document, or anything relating to the product, process or the companies, please contact your professional adviser or ourselves. Our contact details are on the last page of this document.
FORTHPLUSPENSIONS
®
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com2
Table of ContentsThe Key Parties and the Product 3Your Commitment 4Risks 5-7- Funding the plan
- Investments
- Withdrawals
Questions and Answers 8-9Contributions 10-11Transfers 12Investments 13Benefits 14-15Death 16Other important information and notes 17-18
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 3
Forthplus Pensions Limited are the Scheme Administrator for The Forthplus SIPP, a Self
Invested Personal Pension, which is a UK based, personal (non-workbased) pension,
registered with HMRC.
A Scheme Administrator is responsible for operating a pension scheme. Forthplus Pensions
Limited are regulated by the Financial Conduct Authority (FCA), the independent financial
services regulator in the United Kingdom, with the regulatory reference: 653170, with
permissions to establish, operate and wind up pension schemes.
The Scheme Administrator has established the pension scheme using a Trust Deed and has
appointed Forthplus Trustees Limited as the Scheme Trustee. Forthplus Trustees Limited are
an entity set up specifically for the purposes of being Trustee to pension schemes, and are
separate from the Scheme Administrator. This means that all of the assets and holdings of
the pension scheme are completely separate from the company which provides and operates
the pension (the Scheme Administrator).
The pension scheme is called The Forthplus SIPP and was established by Trust Deed on
30th October 2015 and is registered with HM Revenue & Customs (HMRC). The Pension
Scheme Tax Reference (PSTR) with HMRC is 00827309RK, and the Scheme is operated
in accordance with the rules and regulations of HMRC, tax legislation and in line with the
requirements of the FCA.
A Self Invested Personal Pension (SIPP) is a savings product which allows you to provide for
yourself and your beneficiaries in retirement. A SIPP comes with greater flexibility over your
investment options than some other pension vehicles, giving you greater control over how you
invest for your retirement. The investment options are subject to the investment restrictions
of HMRC and our investment policy.
There are alternative types of pension schemes available, such as a Stakeholder Pension
Scheme, which may be more appropriate to your circumstances. Further information is available
on the government website, www.pensionwise.gov.uk and through your professional adviser.
You can fund your pension plan by making one-off contributions, regular contributions and by
transferring other pension plans into the scheme.
A SIPP gives you the flexibility to choose when you want to start to take benefits, the amounts
you want to take, and can also provide benefits to your dependants following your death from
the remaining value of the plan.
The Key Parties and the Product
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com4
You should take the time to read and understand this document, alongside
the Terms and Conditions, the fee schedule and the declarations in the
application forms. You should understand the product which you are
applying for, as well as understand the risks.
You should consider this product against other products in the market to
make sure it is appropriate to your circumstances.
You should contribute amounts appropriate to be able to support yourself
in retirement. There is no penalty for ceasing or varying your contribution
amounts, but you must be aware that reducing contributions will have an
affect on the amount you will have in your plan to provide for your retirement.
Where you transfer pension plans from other providers into The Forthplus
SIPP you will be giving up any entitlement under that Scheme. It is your
responsibility to ensure that this is the appropriate action to take. You should
take advice from a regulated professional adviser to consider the benefits
and risks of this.
It is your responsibility to arrange for the transfer of pension plans from
other providers to The Forthplus SIPP and to get the appropriate advice
prior to taking these actions. If you are transferring from a pension plan
with a guarantee or where it contains safeguarded benefits (and the
transfer value is over £30,000), then you will need to take advice from an
FCA regulated professional firm which holds the appropriate permissions to
advise on this. Your current pension provider will be able to confirm if your
plan requires this additional advice level. Irrespective of the type of pension
being transferred, we highly recommend you also take advice on this.
Forthplus Pensions Limited only accepts members who are introduced to
The Forthplus SIPP by professional firms who are regulated to provide financial
advice in the jurisdiction in which you are resident. If you are a UK resident
then the professional advice firm must be regulated by the Financial Conduct
Authority, or have the appropriate permissions passported into the United
Kingdom, have acquired the necessary pension top-up permissions from
the FCA and appear on the FCA Register accordingly. This requirement also
extends to replacing or appointing subsequent professional advisers to act
alongside you. It is your responsibility to find a professional adviser and validate
their credentials.
We do not provide any financial advice and do not make comment on the
suitability of this product, any other product, any investments you may
choose to invest with through the product, or any actions you wish to take,
such as the withdrawal of benefits. For advice relating to these matters
your professional adviser can assist.
We do, however, have a range of guides which provide you with some
information relating to your options. Also, the government website
www.pensionwise.gov.uk provides you with a range of factual information to
assist you in your decision process.
Your Commitment
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 5
There are a range of risks which you must take into account when considering whether
The Forthplus SIPP is appropriate for you. The following details some subjects, but your professional
adviser will be able to go through more specific considerations based on your circumstances.
The purpose of The Forthplus SIPP is to allow its members to build up savings to provide
for retirement.
Three key risk factors specific to this product which you should consider when deciding if
The Forthplus SIPP is able to provide for you through retirement are:
• Funding the plan
• Investments
• Withdrawals
You should also consider other factors which may be outside of your control, such as the availability
of tax relief on contributions, changes in legislation and changes to the pension environment.
The Government has established an independent body to be able to provide further information
on this called the Money Advice Service, which is available at: www.moneyadviceservice.org.uk.
Additional to this is the site mentioned earlier, which is also provided by the Government,
www.pensionwise.gov.uk. You should review the content on these websites during your
consideration of the SIPP and other products.
Funding the plan
The amount that you contribute to your pension plan will have a direct impact on the value
of your pension plan at retirement. You should ensure that contributions are sufficient to be
able to provide an adequate income in retirement, taking into account the costs and charges
of the product and your chosen investments.
You can contribute to your pension fund by making one-off or regular payments.
You can make personal contributions, which is where you put the money into the pension
yourself. Your employer is also able to make contributions to your pension scheme for you.
Personal contributions may be eligible to receive basic rate tax relief based on your
circumstances, which increases the amount contributed. Additionally, if you are a higher rate
tax payer, you may also be eligible for additional relief from HMRC. Employer contributions
do not attract tax relief.
There are limits on how much you can contribute to pension schemes and receive relief.
The limit is based on relevant earnings in the UK and the annual allowance. This limit will
be reduced further in respect of your Money Purchase pension schemes when you access
pension income under the Flexible Pension rules – this is called the Money Purchase Annual
Allowance. The Annual Allowance limit is the combination of all contributions to pension
schemes, not just the amount paid into this pension scheme, including contributions to Defined
Benefit schemes and contributions by your employer. The additional Money Purchase Annual
Allowance is only relevant to Money Purchase schemes, but once it applies, you are legally
obliged to inform all of your Money Purhcase pension providers that you have accessed your
Risks
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com6
pension under the Flexible Pension rules. Furthermore, there is a limit on
the total value of all of your pension funds, called the lifetime allowance.
Exceeding this limit, subject to any protection applied for with HMRC, will
result in the excess being taxed and treated differently.
Further information is detailed within the Contributions section of these
Key Features.
Furthermore, not making sufficient contributions to your pension plan
over the years may result in you not having sufficient funds to provide
an income in retirement. Therefore, the amounts contributed need to be
carefully considered against your circumstances and requirements.
Investments can go down in value as well as up, and therefore, as detailed
below, there is an inherent risk with investments. You may benefit less
from investment growth on contributions if you delay making contributions
to your pension plan.
Transferring a pension from another provider into The Forthplus SIPP
means that you will be giving up any entitlement under the transferring
plan. This includes any guaranteed income, lump sums, protected
retirement ages and any other advantage that the transferring plan
may have offered you. You are legally required to seek advice from an
appropriately qualified FCA regulated firm when you transfer from certain
types of pension schemes, being a plan which provides guaranteed
income on retirement and the transfer value is over £30,000. We very
strongly recommend you also seek advice from an appropriately qualified
and regulated professional adviser when considering the transfer of any
pension plan, including consideration of the impact on any underlying
investments and where appropriate, any risks relating to self managing
your investments.
It is possible that the rules relating to tax relief on contributions may
change in the future and this carries a risk in relation to the amount you
are contributing to the pension plan.
Investments
The value of investments, as well as the potential income from those
investments, may fall as well as rise. You may get back less than the
initial amount invested. You may lose the entire investment amount.
Past performance is not an indicator of potential future performance.
Illustrations of expected performance may not be guaranteed and
guaranteed returns may not be achieved. Returns shown on illustrations
may not be achieved and costs associated with investments may be
higher than shown or may increase.
A range of considerations should be taken to mitigate these risks including
working with a professional adviser to build an appropriate diverse portfolio of
investments appropriate to your risk profile and circumstances. It is considered
extremely high risk for a pension plan to only have one or two investments,
as well as not having an appropriately diverse portfolio of investment types.
Some investments carry a greater risk than others, and these risks should
be considered when assessing and building the investment portfolio. A few
examples, though definitely not an exhaustive list, of these risks could be:
• The investment has only a small subscription or a lack of diversification
• The investment may not be covered by a compensation scheme,
such as the Financial Services Compensation Scheme
• The investment may have a lock in period, during which you will not be
able to withdraw funds, or during which withdrawals may carry penalties
• A selected investment may have reduced liquidity, meaning that
redemptions are slower or sometimes not possible for periods of time
• The investment is designed to be more adventurous in building
a greater return, giving a higher volatility on its value
It is also important to regularly review the investment portfolio to ensure it
is still current and appropriate to your circumstances and that underlying
factors have not changed the investment risk status taking it out of your
agreed risk profile.
We may make available documentation from investment providers in the
course of our operations, however, this information is only being made
available through us, and is in no way an endorsement or recommendation
of an investment. Any advice you require on your investment decisions must
be sought from your professional adviser. We also strongly encourage you
to do your own additional research during the consideration process, and
to monitor your chosen investments and providers on an ongoing basis.
If the value of your pension plan or an investment is small, the costs
associated with the plan may erode the value of your pension plan.
Additionally, there may be additional costs, payments, commissions
and other factors within investments and from investment providers
which further increase the total costs applicable to your pension and its
investments. High costs can have an impact on the ability for a pension to
grow, both in actual terms, and in real terms (relative to inflation), so you
should investigate these thoroughly to ensure everything has been taken
into account during the planning phases, and ongoing.
You should note that the tax rules relating to capital gains and income
from investments may change in the future which may have an impact on
the investment and its returns.
Risks (continued)
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 7
Withdrawals
From the age of 55 you will be able to take benefits from your pension
(increasing to 57 in 2028). These can be taken as income, lump sums or
by the purchasing of an annuity.
Under the current income and lump sum rules for the SIPP, these can
come in the form of a tax free element and a taxed element. There is not
a limit on the amount of pension you can take out, although if you started
taking your pension before April 2015 you may be in capped drawdown,
which is limited. You can switch to flexible benefits (limitless) at any point,
although this will mean the introduction of the money purchase annual
allowance on contributions across all money purchase pensions.
Taking income payments earlier on in life or taking large amounts will
reduce the value of the pension and potentially its ability to provide an
income into the later years of retirement. Additionally, if you start taking
income earlier than planned, then this may have an impact on the pension
fund’s ability to support you, its longevity and its ongoing growth.
Your pension holdings may be subjected to additional tax levies if the
total value of all your UK pension holdings are greater than the Lifetime
Allowance – a limit which the government have put in place in respect
of the preferential tax advantages for pension savings. The Lifetime
Allowance limits are set out in the table below.
Tax Year Lifetime Allowance2014/15 £1.25m
2015/16 £1.25m
2016/17 £1m
2017/18 £1m
2018/19 £1.03m
2019/20 £1.055m
2020/21 £1.0731m
In certain circumstances individuals may be eligible for, or may have been
provided with, protection in respect of these limits for pension savings
they have already built up. However, these protections may be conditional,
such as a requirement to no longer contribute to the plan, which may
affect your plans regarding pension savings.
You can use the pension fund to purchase an annuity, which is where
you exchange your pension fund in return for a lifetime income, often
guaranteed for a period of time to provide for beneficiaries, relative to your
choice. You can choose to take your tax free element and then transfer
the remainder to the annuity provider to purchase the annuity, or forfeit the
lump sum in favour of a higher income.
There is no guarantee that annuity rates will improve in the future.
If you elect to take an annuity, it may provide you with more or less income
than you may be able to get through remaining in the SIPP.
In taking an annuity, you will give up the benefits in the event of death
from your pension, such as the ability to pass on the pension as a lump
sum to your beneficiaries, in favour of whatever terms are offered by the
annuity provider.
It is usual that the provision of more protections, benefits and guarantees
will be provided in return for a lower initial income. Therefore, an annuity
with a fixed income amount for life, and with no benefits for any dependants
will have a higher rate of income compared to an annuity which is fixed
to inflation rates and provides guarantees for your dependants should you
die within 5 years.
Please note, Forthplus Pensions does not provide annuity products.
You should consider all of these factors, along with any other questions
you may have, with your professional adviser. They will also provide you
with information relating to your personal circumstances which you may
need to consider prior to applying to The Forthplus SIPP.
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com8
Should I apply for The Forthplus SIPP?
The Forthplus SIPP is designed to give flexibility of the management of the pension plan back
to the member, allowing the member to choose how to invest their pension funds, and when
and how much the member wants to take as income.
With this increased flexibility, the product becomes more sophisticated because it gives a wider
range of choice and puts that responsibility onto you as the member to make the decisions.
The Forthplus SIPP may be appropriate for you if you:
• Want to save for retirement in a tax efficient manner
• Want greater flexibility over the investments of your pension fund
• Understand the risks associated with investments
• Understand that income and the eventual pension pot is not guaranteed
The product may not be suitable for you if you:
• Are planning on saving for a short term
• Want immediate, unrestricted or early (before age 55) access to these savings
• Need access to only a limited range of investments
Can I have a SIPP?
Subject to your application being accepted, Forthplus Pensions accepts people who wish
to build up UK pension funds, through contributions, or transfer pension funds from other
pension schemes.
If you are unsure whether a SIPP is the right product for your needs, please consult with your
professional adviser who will be able to discuss this product alongside your other options.
Is The Forthplus SIPP a Stakeholder Pension?
The Forthplus SIPP is not a stakeholder pension. A stakeholder pension is a relatively simple
pension solution with a limited range of investments and a range of governmentally prescribed
minimum standards including charges, minimum payment levels and terms and conditions.
These products are generally available and may be more suitable to your needs than a SIPP.
If you are unsure whether a stakeholder pension may be more appropriate, please contact
your professional adviser.
Questions and Answers
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 9
How much does the SIPP cost?
The charges for the administration of the SIPP are detailed in the Fee
Schedule, which is supplemental to this Key Features Document.
You should read this document carefully to ensure that you fully understand
the charges of the pension scheme prior to applying.
This is available on our website and is reviewed at least annually.
Are there any other charges?
Further charges, payments and commissions may apply in respect of
banking, investments, third party providers, and in return for advice. These
could be paid initially, paid annually for ongoing services, or may be covered
by providers on your behalf, sometimes subject to you remaining in an
investment for a term (often this structure will result in penalties should
you remove yourself from an investment earlier than agreed, planned or
anticipated). Further information on the charges will be available on request
from the investment provider and through your professional adviser.
You should take your time to understand all of these charges collectively
and their impact on your pension savings, both initially, and in respect of
their impact on the pension to grow in value.
Can I pay my professional adviser using my SIPP Money?
The Forthplus SIPP does not pay commission to professional advisers,
so your professional adviser will usually be paid in one of three ways:
• You make an arrangement to pay them a fee directly
• You make an arrangement to pay them a fee from your SIPP’s bank
account by instructing us using the appropriate form (an ‘Adviser Charge’)
• Your adviser will be paid by the underlying investments, either as
commission or as a charge (not always applicable/available and
should be discussed before investing)
Your professional adviser is not allowed to pass on any of this amount
to you. You can only use your SIPP money to pay for costs and charges
which arise in respect of your pension. This means you would not be
able to use your SIPP to pay your adviser in relation to advice provided in
relation to other products, although you can use it to pay adviser charges
in relation to your SIPP.
What are the Terms and Conditions for The Forthplus SIPP?
The Terms and Conditions document sets out, alongside the Application
Form, Fee Schedule and the Trust Deed and Rules of the Scheme, the
full agreement for application and membership to the Scheme. You
should carefully read the Terms and Conditions, Fee Schedule and
Pension Illustration before signing the application form for The Forthplus
SIPP, and then ensure that you have read and understood all of these
documents before signing and submitting the application form. There
will be additional documents from third parties, such as key information
documents and fund fact sheets for your investments; these are separate
to the SIPP documents and you should read each of these separately
before making any investments.
What is the starting value of The Forthplus SIPP?
Forthplus Pensions do not normally expect any pension to start with
less than £20,000 if it is intended to be funded by regular contributions,
or £40,000 if it is to be funded by the transfer of pension funds and
regular contributions are not expected. Furthermore, we do not usually
accept new pension plans for individuals over the age of 55 where,
the plan is not expected to exceed the value of £40,000 in any way other
than through investment growth. You should contact us for more information
before continuing your application if you think this may affect you.
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com10
Personal Contributions
You can pay contributions into your pension plan and this will be treated
as a personal contribution. Additional to this, other people (other than your
Employer) can contribute to your pension plan on your behalf, which will
also be treated as a personal contribution for tax purposes.
You must complete the appropriate forms before making any contributions.
Tax Relief on Personal Contributions
Personal contributions made to your pension plan can attract tax relief of
basic rate tax up to a total of your UK relevant annual earnings, subject to
an overall Annual Allowance (£40,000 for 2020/21).
If you do not have any UK relevant income, you may still be able to contribute
up to £3,600 per year gross (£2,880 net) into your pension and receive
relief, if you have lived in the UK for any tax year in the last 5 full tax years.
If you do not qualify for any tax relief, or exceed your limits, you may still
be able to contribute to your pension, but you will not receive tax relief.
It is your responsibility to tell us whether you are eligible to receive tax
relief on contributions and you must notify us if this eligibility changes or
if you are going to exceed your permissible limits.
Further information on eligibility is available on the Pension Advisory
Service website, along with a range of additional resources,
www.pensionsadvisoryservice.org.uk.
Higher Rate Tax Relief
If you are a higher rate tax payer, you may be entitled to additional relief.
This is managed outside of the pension, between yourself and HMRC,
usually through your tax returns.
Employer Contributions
Your employer can also make contributions to your pension plan on your
behalf. These contributions do not attract tax relief for you or your pension
plan, but do count towards your annual allowance.
We will require an additional form from your employer for this, and if they
choose to make regular contributions, will need to make a declaration
(as regular employer contributions form a legal commitment).
Contributions after taking Flexible Benefits
If you take any of your pension income as Flexible Benefits, the Money
Purchase Annual Allowance will applying meaning you can contribute up
to £10,000 per year to your money purchase pension plans. You must
note, however, that this is across all Defined Contribution plans and not
just your Forthplus SIPP.
Contributions in excess of the annual allowances
If you contribute more than any of the applicable annual allowances
(£40,000 across all pensions; £10,000 on money purchase pensions
after taking flexible benefits), any personal contributions where you are
claiming tax relief, and any employer contributions, your contributions will
be liable to the Annual Allowance tax charge of up to 45% of the value of
the Contribution.
Minimum and Maximum contributions
There is no maximum contribution, though you will attract a tax charge
if you contribute more than the Annual Allowances or you build up more
than the Lifetime Allowance in your pension fund.
For The Forthplus SIPP, the minimum one off (ad hoc) contribution amount
is £1,000 net of tax and the minimum regular monthly contribution is
£250 net of tax.
How to make contributions
Contributions can be made by cheque, standing order or bank transfer
directly into the bank account for your SIPP. The reference of your policy
and your name should be quoted on all payments. Any tax relief due
on the contribution will then be reclaimed and paid into the SIPP’s bank
account on receipt.
Any contribution made needs to be accompanied by a form notifying us
of the payment. Without this form, we may have difficulties allocating
the payment to your policy, and may have to return the payment or
we may not be able to claim any tax relief, if you are due any. If the
payment is intended to be regular, a form can be provided before the
first payment. If it is intended to be ad hoc, then a form will need to be
provided each time.
Contributions
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 11
What if I have Lifetime Allowance protection from HMRC?
A range of protections have been put in place over time as the lifetime
allowance rules have changed to limit the impact on members who may
have been adversely affected by the changes in legislation. Where you
have applied for protection from HMRC and you make a contribution,
you may lose that protection entirely. You should check this before making
any contributions..
What is the Annual Allowance for contributions?
The Annual Allowance is the limit for tax relieved savings into a pension.
The annual allowance for a pension input period for 2020/21 is £40,000
across all pension plans. This is measured by the sum amount of
contributions made to any pension plans, by you, or on your behalf
(including contributions made by your employer) and the increase in any
Defined Benefit (often referred to as Final Salary) entitlements. It is your
responsibility to ensure you remain within these limits.
The increase in Defined Benefit entitlement is £16 for every £1 per annum
of pension increase. Therefore, if your defined benefit pension increases
from £20,000 per annum to £20,100, then the Annual Allowance used by
that increase of £100 will be £1,600.
When you start to take income in excess of your 25% tax free amount
through a flexible pension, the money purchase annual allowance
decreases to £10,000 (combined across all money purchase pension
plans) from that point forward.
The pension input period for The Forthplus SIPP has been aligned with the
tax year, and will remain such unless you notify us that you wish to use a
different date.
Exceeding the Annual Allowance
For any amounts in excess of the Annual Allowance, you and your employer
must not receive any tax relief on those contributions, or you may be faced
with an annual allowance tax charge. This charge will be added to the
rest of your taxable income, although, if the tax charge is going to be more
than £2,000, you are able to have it paid from your pension fund.
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com12
Can you transfer existing pension plans into The Forthplus SIPP?
Yes, you can. You can transfer some or all of your other pension plans
into The Forthplus SIPP, subject to the approval of the providers of your
previous scheme, and from us, that we will accept the transfer.
In order to transfer your pension plan to The Forthplus SIPP you will
need to complete a Transfer-In form, which will request the transfer from
your existing provider. Your existing provider may need extra forms or
documentation from you to complete the transfer, so it is worthwhile
contacting your provider separately to confirm what they need to expedite
the transfer.
With some pension plans it may not be possible to transfer the plan.
Providers of Defined Benefit pension plans which are either due to come
into payment within 1 year, or which are already in payment, are not
obliged to transfer your pension benefits, and therefore it is unlikely that
these will transfer.
Members of unfunded public sector pension schemes are no longer able
to transfer out. The Local Government Pension Scheme (LGPS) is a funded
arrangement so transfers from this scheme are still permitted.
It is a requirement from April 2015 that members wishing to transfer any
guaranteed pension or pension with safeguarded benefits valued at over
£30,000 must seek advice from an appropriately qualified FCA regulated
firm prior to transfer.
With Defined Contribution pension schemes, such as SIPPs and personal
pensions, you are able to transfer your benefits from these before or after
taking benefits.
Please note that you are responsible for the transfer of your existing
pension plan, and that we strongly recommend you take financial advice
from an appropriately qualified professional adviser on the transfer, taking
into consideration the risks and advantages of the ceding scheme, the
receiving scheme, and considering the alternative options.
You are not able to transfer the State Pension.
Transferring Investments
You may be able to transfer existing pension plans without selling your
investments; this is called an ‘In-Specie’ transfer. Please note that you will
need to confirm that we are able to receive the investments. We have an
investment policy which defines the types of investments we accept into
our pension plan which may differ from the transferring provider.
Furthermore, it may not be possible to transfer some investments for
a variety of reasons, such as the inability of the investment provider
to reassign ownership, or the investment being exclusive to that
pension provider.
You should seek advice on the transfer of investments as such a re-
registration of assets may change the terms of the investment, such
as charging arrangements, or the conversion of assets into a different
share class.
How long does it take to transfer?
Pension transfers can be complex or may require the input of various
parties and therefore may take some time, especially when assets are
being transferred in-specie.
Under normal circumstances, noting the considerable complexities
involved in transferring some Defined Benefit schemes, we would
anticipate transfers to complete in under 8 to 12 weeks from the point
where all information has been received. This is usually much quicker for
personal pensions.
However, with the prevalence of so many pension scams and other risks
to peoples hard earned pension savings, we are, as are all reputable
pension providers, obligated to ensure that any transfers will not risk
your pension savings, and therefore additional controls and checks may
be used to protect you, which can sometimes add a bit of time.
Can I transfer my Forthplus SIPP to another provider?
Yes, you can transfer part or all your pension plan to a UK registered
pension scheme or a Qualifying Recognised Overseas Pension Scheme
(QROPS) at any time.
To start this, complete the relevant form for the receiving scheme and
contact us to request a copy of our Transfer Discharge Form. As with
transferring in, you can transfer as cash or in-specie, subject to your new
provider being able to receive the assets.
If you transfer to a QROPS then we will perform a check against
your lifetime allowance and if your total benefits exceed the lifetime
allowance, a tax charge will be levied against your pension plan and
settled prior to payment of your benefits. As there are a range of
additional matters to consider, partial transfers are made at the
discretion of the Scheme Administrator.
Transfers
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
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Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 13
The Forthplus SIPP is a Self-Invested Personal Pension and therefore
the investment decisions remain with you. However, as a responsible
provider, we have instilled a range of additional requirements over the
types of investments we will allow within the pension scheme.
Separate to this Key Features Document we have an investment policy,
which is available online and on request. In there we note the base criteria
for an investment to be permissible and a range of additional conditions
and controls we instill over and above that for your protection, and that of
other members within the scheme.
For any investment to be held within the pension scheme, we must first
approve the investment. Furthermore, we will continue to monitor any
decisions and may alter our ruling subsequently.
The base criteria for an investment to be permissible is that it conforms to
one of the following investment types::
• Bank account deposits
• Cash
• Cash funds
• Corporate bonds
• Exchange traded commodities
• Government & local authority bonds and other fixed interest stocks
• Physical gold bullion
• Investment notes (structured products)
• Shares in investment trusts
• Managed pension funds
• National Savings and Investment products
• Permanent interest bearing shares (PIBs)
• Real estate investment trusts (REITs)
• Shares admitted to trading on a regulated and listed exchange,
as per HMRC listings
• Units in regulated collective investment schemes
If you do not know if an investment is covered by this list, please contact
your professional adviser. All investments need to be approved to be used
in The Forthplus SIPP by the Trustees and Scheme Administrator.
Within The Forthplus SIPP it is possible to open up trading accounts,
portfolio accounts, investment bonds and similar through which you can
hold investments, however, it must be noted that these restrictions carry
through into those accounts as well.
We do not provide any advice nor do we assess the suitability or
appropriateness of investments. You should discuss your investment
choices with your professional adviser.
Dividends
Any dividends, coupons or remuneration paid by investments for the
benefit of the investor and not retained (reinvested) within the investment
or investment wrapper will be paid to the pension scheme’s bank
account. Dividend payments and any other benefits cannot be paid to
the member directly.
Tax
Pension savings attract a range of tax benefits, however, tax on dividends,
deducted at source, cannot be reclaimed. Where tax is deducted at
source from an investment and the Scheme is eligible to reclaim this tax,
it will be reclaimed from the tax office by the Scheme Administrator.
Valuations
Annual valuation statements of the pension scheme will be provided
to members. Members with online access will be able to get annual
statements online.
Investments
The Forthplus SIPP
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Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com14
When considering making withdrawals from your pension we strongly
recommend that you seek professional financial advice to consider the
risks and benefits. The Government’s Pension Wise website is a free and
impartial government service that helps you understand your pension
options: www.pensionwise.gov.uk
Financial Conduct Authority (FCA) rules require us to ensure that we
give appropriate retirement risk warnings to consumers accessing their
pension savings. These rules have been introduced to make sure you
are aware of any risks that are involved in making withdrawals from
your pension.
Therefore, if you do contact us in regards to arranging a withdrawal then
we must ask you relevant questions, based on how you want to access
your pension savings, to determine whether risk factors are present.
If they are, we are obliged to issue you with risk warnings.
When can you start to take income from your pension?
The Forthplus SIPP has a minimum pension age of 55 years old (57
from 2028). From this age you will be able to start taking income from
your pension fund to provide for you in retirement, should you wish.
There is no requirement to start taking benefits from your pension
scheme, and there is no maximum age from which you need to start
taking benefits.
Taking your pension through The Forthplus SIPP
Within The Forthplus SIPP you are currently able to either take Flexible
Benefits from any undesignated portion of your pension fund in the
traditional manner, which is to take up to 25% of any designated amount
(subject to the lifetime allowance) as a tax free Pension Commencement
Lump Sum, and then designate the remaining 75% to provide you with
income at any point (which will be liable to income tax). Alternatively, you
can take an Uncrystallised Funds Pension Lump Sum (UFPLS), which is
where you can take a lump sum from your pension, up to the full value
of the unused part of your pension, with 25% of it tax free, and 75% of
it taxed as income.
For any part of your pension which you have already designated for
benefits, you can withdraw as much or as little as you like, but it will all be
subject to income tax.
It is important to note that as soon as you withdraw any income portion
under the Flexible Benefits rule, then the Money Purchase Annual
Allowance described in the Contributions section will apply.
Any amount of pension in excess of your Lifetime Allowance will be
treated differently at the point of designated benefits. Please refer to
“How are benefits in excess of the Lifetime Allowance treated?” later on in
this section for more details relating to that.
If you transfer into The Forthplus SIPP whilst in Capped Drawdown, you
may be able to continue with that Capped Drawdown until you confirm
to us that you wish to switch to Flexible Benefits.
Benefits
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
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Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 15
Income Drawdown, which is the way that benefits are taken if you take
them from within the pension, allows you to take 25% of the pension
fund as a tax free lump sum, and then the remaining 75% can be used to
provide you an income. The amount of income is unlimited unless you are
in Capped Drawdown, when it is roughly based on 150% of the amount of
income you can get from a single life annuity.
How much tax do I pay on pension payments?
Out of the amount of the pension you have chosen to use for benefits
(crystallised) you are able to take the lower of the following:
• 25% of your pension fund value
• 25% of the Lifetime Allowance (See Withdrawals section for Lifetime
Allowance limits)
as a tax free lump sum from your pension at the commencement of taking
benefits. Where you have protection in place, you may be entitled to more
than the standard lifetime allowance.
The remainder of your pension will be provided taxed on payment using
the Pay as You Earn (PAYE) payment system.
Can I withdraw my whole pension fund in one amount?
Yes, with Flexible Benefits, you are not limited on the amount of pension
you can take. However, withdrawing the whole pension fund means
that your pension plan will have no further funds, meaning that it
cannot provide ongoing income for you in the future. There may also be
major tax implications to withdrawing your whole pension fund and we
strongly advise that you seek professional financial and tax advice before
considering this step.
Can I contribute after I have started taking benefits?
Once you have started to take pension income as flexible benefits,
with any provider, your annual allowance for money purchase pension
schemes will reduce to £10,000 across all of your pensions combined.
Any contributions in excess of this may attract tax charges.
You are not able to take your tax free cash payment and reinvest this
amount into your pension as a contribution, as this will be considered as
recycling and attract significant tax penalties.
How is income over the lifetime allowance treated?
Once you have used up all of your lifetime allowance, any amounts in
excess of this can be either paid out as a lump sum, subject to a flat
55% tax charge, or can be designated to provide you with future pension
income, with an initial 25% tax charge, and then income tax to apply on
any withdrawals.
You can only choose how to apply this once, as it is a crystallisation event.
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com16
What happens to my pension when I die?
With a SIPP you are able to pass on any residual pension value as a lump
sum or as pension income to your nominated beneficiaries.
Can I say who I want to receive my pension benefits when I die?
On your application form you will be able to nominate who you wish to
receive your pension and the percentage you wish to allocate to that
individual. The Scheme Administrator will then take this nomination into
account when arranging for the dispersal of pension benefits.
You can change your nominated beneficiaries at any time simply by writing
to Forthplus Pensions with new instructions.
How will the benefits be passed on to my nominated beneficiaries?
Your nominated beneficiaries will be notified that you have pension
benefits to be passed on. They will be given the options available to them
so that they can confirm how they wish to take on the benefits.
The options currently available to them are to take the amount as a lump
sum, paid straight to their bank account, or to have the amount paid as
an income.
What tax applies to death benefits passed on to my beneficiaries?
If the Member is under the age of 75 when they die, the whole value of
the pension can be passed on tax free, subject to your lifetime allowance.
If the Member is over the age of 75 when they die, payments to the chosen
beneficiary will be subject to income tax at the beneficiary’s marginal rate.
There are no restrictions on the level of withdrawals that can be taken, or
may be able to be transferred to your nominated beneficiary for them to
take as a pension.
Does the Lifetime Allowance still apply to the payment?
Yes, the Lifetime Allowance still applies to payments on death. The limits
can be found in the Withdrawals section of this document.
Death
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
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Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170 April 2020
www.forthplus.com 17
Documentation you should read
This Key Features Document forms part of the documents which make
up The Forthplus SIPP, and should be read in conjunction with the Terms
and Conditions, the declarations within the Application Form and the
Fee Schedule. On application or during the advice process you will be
provided with an illustration for The Forthplus SIPP as well.
Your professional adviser will provide you with their own recommendation
documents such as a suitability assessment and will be able to provide
you with the information pertaining to your investment options.
Additionally, you should read our privacy policy which is available online
or on request.
Governing Rules of the Scheme
The Forthplus SIPP is a Self-Invested Personal Pension set up under a
Trust Deed dated 30th October 2015.
The Trust Deed and Rules govern the establishment, operational limitations
and structure of the Scheme, and are available for inspection on request.
The Terms and Conditions set out the specific parameters, obligations and
operating limitations of the Scheme, which are available on our website and
on request.
Right to cancel
You have a legal right to cancel your SIPP application within a 30 day period
from the date of the letter confirming establishment of the SIPP. Further
information on this right and other similar rights, such as the right to
cancel a transfer, is included in the Terms and Conditions of The Forthplus
SIPP. During this period Forthplus Pensions Limited may require you to
retain your fund in your designated bank account until the cancellation
period has elapsed after which we can proceed with any investment
instruction, or arrange payment of your benefits. If instructed otherwise,
we will only be able to return the prevailing value subject to any losses or
gains, and after all costs and charges. Once the SIPP is established the
setup fee is due and will not be refunded, should the SIPP not be taken up.
If you wish to waive your rights to this 30 day cancellation period you can
complete the waiver on the Forthplus SIPP Application Form.
Waiving your entitlement to cancel will mean that you will not have the right to cancel and therefore you should carefully consider this before you instruct this on application.
It is not possible for transferred money held for onward transfer as a result
of cancellation to be paid to you in any way. It must stay within a pension,
and it can only be transferred to a registered pension scheme or a QROPS.
In order to minimise the effect of any charges or change in value of your
pension plan, we will not, unless instructed explicitly otherwise, action any
investments until your policy cancellation period has expired.
You can cancel your pension plan by writing to us at the following address:
Cancellation Request, Compliance Director, Forthplus Pensions Limited
Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH.
Alternatively, you can fax or email the instruction with the original to follow
in the post.
Compensation Scheme
The Forthplus SIPP is covered by the Financial Services Compensation
Scheme (FSCS). The FSCS has been set up to cover compensation where
the company is not able to meet the claims made against them.
Your pension scheme’s bank account is covered up to £85,000 through
this scheme and most UK regulated investments will have cover relative
to the product they provide. Investments which are not regulated in the
UK may have different or even no compensation scheme available should
they not be able to meet claims against them, which should be considered
when placing investments. It is your responsibility to ensure this before
instructing us to invest.
Further information on the FSCS is available on their website at:
www.fscs.org.uk.
What advice can we provide to you?
We are not able to provide you with any advice or any assessment of
suitability or appropriateness, either of the pension product, or any of the
underlying investments, or anything else relating to financial, tax, legal or
any other form of advice or opinion.
You should seek the advice of an appropriately qualified and regulated
professional adviser for any advice and decisions which need to be made
in respect of your pension plan.
Other important information
The Forthplus SIPP
Key Features FORTHPLUSPENSIONS
®
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
Company Registration Number: 07990504. Authorised and regulated by the Financial Conduct Authority. FCA number: 653170April 2020
www.forthplus.com18
Other important information (continued)How to Contact Us
If you have any questions or would like any information, you can contact
us via your financial adviser, which is the normal route, but also are able
to communicate with us directly.
When you have access to our online portal, you will be able to send us
communications through there, and alternatively, you can contact us using
our postal, email and telephone details below:
Our contact details are: Forthplus Pensions Limited, Clarendon House,
114-116 George Street, Edinburgh, EH2 4LH, United Kingdom.
Telephone: +44 (0) 345 646 0156
Email: [email protected]
Most of our communications are made through your professional adviser
so that they can assist in your understanding and with any queries you may
have and explain the information you receive. In certain circumstances we
may contact you directly to verify information, or where we deem it necessary.
Unless explicitly directed by you otherwise, we may share any
communications or questions with your professional adviser to enable them
to assist you further and better manage your ongoing relationship. Please
refer to our Privacy Policy for further information on how we manage this.
What if I want to change my professional adviser?
You may wish, or need to change your professional adviser during the life
of your SIPP. The reasons for this could include that you have moved to
a different jurisdiction in which the adviser is not regulated to operate,
or your circumstances may have changed.
If you wish to change or add a professional adviser to your SIPP, you can
request a Change of Adviser form from us using our contact details above,
or through the online communication system.
What if you want to make a complaint?
We always strive to provide the best possible service so we take any
complaints very seriously, both addressing any concerns, and also ensuring
that we modify our procedures to prevent the recurrence of any dissatisfaction.
We have a very strict complaints procedure, so if you wish to make a
complaint, we request that you put it in writing so that we hold adequate
record, including as much information as possible to allow us to investigate
the matter thoroughly for you. Please contact our Compliance Director in
writing, by email or by fax using the contact information in the “How to
Contact Us” section.
Data Protection
We are committed to protecting and respecting your privacy and will
comply with all data protection laws in the country you are resident and
use the The UK’s Data Protection Act 2018, in force 25th May 2018,
as the standard.
Full details of how we treat your personal data can be found in our Privacy
Policy available on our website or requested from us directly or from your
professional adviser.
Important notes
The information contained in this document is based on our current
understanding of the law and may be subject to change without notice.
This product is provided from the United Kingdom and the laws of England
and Wales apply to the product and the companies.
Where there is any contradiction between this document, and any other
literature relating to the SIPP, and the legislation and regulations governing
the product, the legislation and regulations will prevail.
Copies of all of our literature is available on request through your
professional adviser, or on request to us.
The Forthplus SIPP is a retirement product designed to help you save in
a tax efficient manner to provide an income in retirement. It is illegal to
attempt to access your pension funds prior to the minimum retirement age
or in amounts exceeding the permitted sums.
Pension Liberation is a very real threat to pension savers and carries
with it a range of legal ramifications in addition to potentially ruining any
retirement planning. You should be careful of individuals offering early
access to pension funds through any route. Further information can be
found on the FCA ScamSmart website:
www.fca.org.uk/scamsmart/early-pension-release-scams
Useful Websites
Some useful websites for additional information around pensions are:
www.moneyadviceservice.org.uk/en
www.pensionsadvisoryservice.org.uk/
www.pensionwise.gov.uk/
www.thepensionsregulator.gov.uk/
www.hmrc.gov.uk/manuals/ptmanual/index.htm
www.fca.org.uk/scamsmart
Forthplus Pensions Limited Clarendon House, 114-116 George Street, Edinburgh, EH2 4LH
T: +44 (0) 345 646 0156 F: +44 (0) 131 777 2668 E: [email protected]
www.forthplus.com
FORTHPLUSPENSIONS
®
Registered address:
Elma House, Beaconsfield Close,
Hatfield, Hertfordshire, AL10 8YG
Registered in England and Wales
Company registration number: 09459216
Authorised and regulated by the Financial Conduct Authority
FCA number: 653170