Cash-Out Retirement Plan

STEPPED BOX - example cash-out-retirement plan

Our Cash-Out Retirement Plan is a fixed term contract that will pay you a pre-agreed regular income over a specified period between 3 and 25 years.

To apply you must be aged between 55 and 85 and have at least £10,000 to invest after you've taken any tax-free cash.

Overview

If you choose our Cash-Out Retirement Plan, you can tailor it to meet your needs. The options you choose will determine your income.

Option	Description
Tax-free lump sum	You can usually take up to 25% of your pension pot as a tax-free lump sum. If you don't take it at the start of your plan, you won't be able to take it later.
Amount of income or term of your plan?	Choose how much income you want and how often it's paid, and we'll work out how long your plan term will be. Alternatively, choose how long you want your plan to last, and we'll work out how much income you can receive. Once you've decided and started your plan, you won't be able to change these options.
Payments	You can be paid monthly, quarterly, every six months or every year, either: in advance – at the start of the payment period; or in arrears – at the end of the payment period.

It may be suitable for you if:

You want to withdraw the full value of your pension pot by receiving set regular payments over a period of your choice.
You don't want your pension pot to be subject to any investment risk.
You want your chosen beneficiaries to receive your income if you die before the end of the term.
You want to use your pension pot to provide you with an income for a specific period. For example, to bridge the gap to an alternative such as a final salary pension, or, if you're deferring your state pension, to increase the amount of income it pays you, or so that it pays you a lump sum.
You want to take the money out of your pension pot but you would incur a higher rate of income tax by taking it in one go, than if you spread the withdrawal over several years.

It may not be suitable for you if:

You want to withdraw cash amounts from your plan as and when you choose.
You want a maturity payment at the end of the plan, as once you reach the end of the term the payments will stop.
You want to change the amount of income you receive during the plan term.
You want an income that lasts for your lifetime and does not end at a set date in the future.
You or your partner have certain lifestyle health risks or have been diagnosed with a more serious medical condition(s). This could lead to your income being higher through a product that assesses your health.
You could immediately withdraw the full amount from your pension pot and not pay a higher rate of income tax than you'd normally pay. If you're unsure of your income tax position, we recommend that you seek financial advice.

Molly is 65 and would like to use one of her pension pots to pay for travelling and enjoying the start of her retirement.

She contributes £38,000 from an existing pension plan into a Cash-Out Retirement Plan and chooses a term of five years. We calculate the fixed income Molly will receive is £8,240 each year, and the income will continue to be paid to her beneficiary if she dies before the end of the term.
Fixed income received each year from Molly's contribution:

£8,240
X
Plan term:

Five years
=
£41,200

This sum is the total amount due to be paid, over the full term of the plan, before income tax.
These are example figures only. For details of the actual amount you could receive, get a quote online.

You can't make any changes to the plan once it's started.
If your circumstances change during the term of the plan, you can cash it in or transfer to another scheme.
You'll receive the same income each year with this product. This could mean what your income buys now might not be as much in future years.
Plan payments are considered as income, and subject to income tax. They could also affect any state benefits you claim.
If you have a Sun Life Financial of Canada Guaranteed Annuity Rate, you won't be able to use this when buying our Cash-Out Retirement Plan.
Our Cash-Out Retirement Plan is not available for anyone living outside the UK.
The tax you pay on the income from the plan will depend on your individual circumstances and can change. At the end of your plan, income will stop. If you don't have any other source of income or savings, or you feel you need help, we strongly recommend you seek guidance or financial advice.
You may be able to get a higher amount of income through a product that assesses your health and offers higher returns for certain lifestyle or medical conditions.

You can get a quote online for either of our retirement products.