UPDATE OF IMPORTANT FACTS ABOUT YOUR

STAKEHOLDER PENSION

Pens

ions

We’ve changed the name of the CIS Stakeholder Pension Scheme to the Royal London Stakeholder Pension Scheme (No3) as part of the rebrand to Royal London. There have been no changes to the terms of your plan.

What is a Stakeholder Pension plan?

Your pension plan is a tax-efficient way of building up a pension pot to provide you with pension benefits in your retirement.

The options available to you are included in the What choices will I have when I come to take my pension benefits? section.

Do I get tax relief on my pension contributions?

To encourage people to save for their retirement, the Government gives basic rate income tax relief on your pension contributions.

Basic rate taxpayersFor basic rate taxpayers this means that if, for example, you pay £80 a month into your Stakeholder Pension plan, we would collect an additional payment of £20 from the Government and pay this into your plan. You would then have £100 a month being invested in your plan.

Higher and additional rate taxpayersHigher rate and additional rate taxpayers also qualify for basic rate income tax relief. If you are a higher rate or additional rate taxpayer, and you pay the same £80 a month into your Stakeholder Pension plan, we would collect the same additional payment of £20 from the Government and pay this into your plan. You may then be able to claim further tax relief through your Self Assessment tax return if you complete one, or by asking H.M. Revenue and Customs to adjust your PAYE (Pay As You Earn) tax code if you don’t.

Are there any limits on the amount I can save to my pension?

There is no limit to the contributions that can be paid into your pension schemes each year. There is however, a limit to the contributions on which you are eligible for tax relief. The limit is the greater of:

- £3,600 and- 100% of your earnings.

In addition to this limit there are further restrictions on the amount of contributions you can pay into your pension each year.

Annual AllowanceIf contributions to all your pension schemes exceed a limit known as the Annual Allowance, you may have to pay a tax charge on the amount over the Annual Allowance. The contributions include any made by someone else on your behalf, such as by your employer. The Annual Allowance is currently £40,000 (2019/20 tax year), although a lower allowance may apply if you have income in a tax year of more than £110,000.

If you have taken pension benefits under the new options that were brought in on 6 April 2015, your limit is reduced to £4,000 (2019/20 tax year). This limit only applies to contributions made into a money purchase or defined contribution pension, and is known as the Money Purchase Annual Allowance.

Lifetime AllowanceThe Lifetime Allowance is the maximum value of pension benefits you can take before incurring an additional tax charge. The Lifetime Allowance is currently £1,055,000 (2019/20 tax year).

You can find more information at hmrc.gov.uk. If you think you have exceeded these limits we strongly recommend you seek advice from a regulated financial adviser.

Where can I invest my pension contributions?

You can invest your pension contributions in a range of Royal London pension funds managed by our own fund managers.

Different levels of risk apply to different funds. We recommend that you choose a fund, or combination of funds, that suits your goals and your own attitude to risk. A general principle is that potential return rises with an increase in risk.

Each fund is split into units and each pension contribution you make buys you a certain number of units in the funds of your choice.

The value of your plan at any time is the number of units you have in each fund multiplied by the current unit price.

The value of your plan can go up and down, reflecting daily changes in the value of the investments held in each fund. You could get back less than you invested.

It’s a good idea to regularly review your investment choice (at least annually). We publish the unit prices on our website royallondongroup.co.uk/RLCIS, along with ‘factsheets’ which provide information on the past performance of the different funds.

You can switch the money you’ve already saved in your pension pot to different funds and you can also direct future pension contributions to different funds.

What is the RLCIS With-Profits Stakeholder Fund?

The RLCIS With-Profits Stakeholder Fund, referred to here as the with-profits fund, operates slightly differently to our other funds. The value of the investments in this fund will still fluctuate, reflecting daily price changes in the underlying assets; however, we ‘smooth’ our investment returns to protect against extreme changes in investment markets.

By smoothing we mean we hold back some of the profit made when investment returns are good, so that we can increase returns at a later date if investment returns are lower, giving a more stable return. We do not profit from managing this fund in this way – all money in the fund goes back to the policyholders.

We explain how we manage the with-profits fund in the Principles and Practices of Financial Management (PPFM) of the RLCIS With-Profits Stakeholder Fund document, available on our website royallondon.com. Please click on ‘About us’ followed by ‘Corporate information’, ‘Corporate Governance’ and then ‘Principles and Practices of Financial Management (PPFM)’.

You may also see this fund referred to in your statement or on the Royal London website as the Royal London With-Profits Stakeholder Fund.

What is a Market Value Reduction?

In certain circumstances it may be necessary to reduce the plan value available to those who are taking money out of the with-profits fund. We would do this by applying a Market Value Reduction (MVR). It is most likely that we’ll need to apply an MVR when a large amount of money is being taken out of the with-profits fund at a time when investment values have been particularly low.

We would only use an MVR in order to maintain a fair level of return to everyone still invested in the with-profits fund. If we didn’t apply one, the extra amount given to someone leaving the fund would have to come from other investors who might, therefore, receive less than their fair share.

An MVR will not be applied in the event of a death claim or at retirement.

What is a lifestyle option?

You may have selected a lifestyle option when you took out your plan. If you did, we will gradually (typically over a period of several years) move the money in your pension pot from higher risk investments, such as shares, to safer investments, such as bonds and cash, as you approach your Chosen Retirement Date*.

We do this to provide some protection against the value of your pension pot falling immediately before your Chosen Retirement Date.

There are several different lifestyle options available. If you selected one of these, the information sent to you when you took out your plan will explain how it works.

Are there any charges?

We charge you an annual charge for managing your plan. The charges are within the limits laid down by government regulations:

• If you took out your plan between 6th April 2001 and 5th April 2005, you will pay an annual management charge of no more than 1% of the value of your pension pot each year.

• If you took out your plan after 5th April 2005, you will pay an annual management charge of no more than 1.5% of the value of your pension pot each year. On the 10th anniversary of your plan, the charge will reduce to no more than 1% of the value of your pension pot each year.

How flexible is my Stakeholder Pension plan?

You can take up to two contribution holidays in any 12-month period.

You can also increase, decrease, stop and restart your pension contributions at any

time. However, any contributions you do make must be at least £20 per month.

You can make lump sum payments into your plan at any time.

You can change where your funds are invested at any time by switching your funds and you can also invest in any number or combination of the funds available.

If your employer is contributing into your plan, and you change jobs, you may be able to continue paying into your plan.

When can I take my pension benefits?

Pension benefits can be taken from age 55, even if you’re still working. We will write to you in the months leading up to your Chosen Retirement Date to inform you of your retirement options, unless you contact us to request an earlier retirement date.

What choices will I have when I come to take my pension benefits?

You can access your pension pot at any time after age 55, even if you’re still working.

You can choose any of the following options:

• You can use your pension pot to provide a lifelong, regular income (also known as a lifetime annuity) with a guarantee that the income will be paid for as long as you live. A quarter of your pension pot can usually be taken as a tax-free lump sum and any other payments will be taxed as earned income.

• You can take all of your pension pot in one go as a single lump sum. A quarter of your pension pot can usually be taken tax-free and the rest will be taxed as earned income.

• You can leave your pension pot invested and take it more flexibly. You could take it as a number of lump sums. A quarter of each lump sum is normally paid tax-free with the rest taxed as earned income. Alternatively, you could take it as a flexible income where a quarter of the whole pot is taken tax-free with all future payments taxed as earned income in the tax year in which they are taken. At any time you can use any remaining pension pot to provide a lifelong, regular income.

• You don’t have to take your pension pot when you reach retirement. You can choose to keep it where it is and then take it at a time that best suits you. Delaying taking your money may give your pension pot a chance to grow but it could also go down in value too.

Not all the above options may be available to you under your Stakeholder Pension and you may need to move to a new pension plan to get the option that you want.

You cannot normally take advantage of these options until you have reached age 55. However, if you are unable to work because of poor health then you may be able to take your benefits earlier.

As you approach your Chosen Retirement Date, we will send you a detailed pack with all your options and details of what you need to do.

To help you understand your options and make the right choices, the Government provides a free and impartial guidance service – Pension Wise.

We strongly recommend that you use this service to help you understand your options and make the right decision. You can access Pension Wise online by visiting pensionwise.gov.uk or by calling them on 0800 138 3944.

This service will not provide advice or recommend specific products or providers. If you feel you need advice, we recommend you talk to a regulated financial adviser. If you do not have a regulated financial adviser, you can get details of local financial advisers by visiting unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost to you beforehand.

What happens if I die before I take my pension benefits?

If you die before you take your pension benefits we will return the value of your pension pot to your beneficiaries.

If you die before the age of 75, it will normally be paid tax free.

If you die after the age of 75, pension benefits paid to an individual will be taxed as income at the recipient’s marginal rate. If the pension benefits are paid to a trust or company, tax at 45% will be deducted before payment is made.

If you purchased separate life cover with your pension, and this cover is in force when you die, we will pay an additional lump sum benefit.

What happens if I am in ill-health?

If you took out the Waiver of Contribution cover option with your pension plan, and are still paying for this cover, please contact us if you are unable to work for any significant period due to sickness or accident. We may be able to pay your pension contributions for you.

If you are unsure whether you have waiver of contribution cover, please contact us on 0345 605 7777.

If you retire early due to ill health, we may be able to make special arrangements for when and how you access your pension pot.

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MKT2623_RL 04/2019

Royal LondonChurchgate House, 56 Oxford Street, Manchester, M1 6EU

royallondon.comThe Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated

by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.

If you would like a copy of this leaflet in a different format, such as Braille, large print or audio,

please call us on 0345 605 7777.

Lines open Monday to Friday 8.30am-5pm.

Can I transfer my plan?

You can transfer your plan to another pension provider at any time before you take your pension benefits. We will not charge you for doing this.

We recommend that you speak to a regulated financial adviser before you transfer your plan.

Additional information

This guide is a short reminder of the main features of your Stakeholder Pension plan and any important changes that might affect your plan. You should refer to the policy document we sent to you when you took out your plan, together with any contract endorsements, for more detailed information. In the event of conflict between this guide and the policy document, the policy document will prevail.

Notes

*Throughout this document, whenever we refer to ‘Chosen Retirement Date’, this is the date that you originally stated you would like to retire and is the date shown on your annual statement (unless subsequently changed).

If you need more information contact our Customer Contact Centre

0345 605 7777Monday to Friday 8.30am to 5pm.

or visit royallondongroup.co.uk/RLCIS