RLCIS Stakeholder Pension Frequently Asked Questions
If you're looking for more information about the RLCIS Stakeholder Pension, our Frequently Asked Questions may have the answer you're looking for.
What is the RLCIS Stakeholder Pension?
The RLCIS Stakeholder Pension is a plan to help build up a sum of money in a tax-efficient way to support you in retirement. It's designed to meet conditions set out in legislation. These include:
- a cap on charges
- low minimum contributions
- flexibility in stopping and starting contributions.
How flexible is it?
You can make one-off contributions at any time to top up your plan. You can also change your regular contributions whenever you like.
HM Revenue and Customs limits the contributions you can make - see "How much can I pay into my plan each year?".
You can stop contributing, or take a contribution holiday at any time. And you can take a contribution holiday for a total of two months in any 12 month period. But if you stop your contributions, or take a contribution holiday, your pension savings could be lower than what you would have received if you'd continued making regular contributions up to your chosen retirement age. Stopping contributions will also mean that any waiver of contribution cover will stop.
You can continue contributing to your stakeholder pension regardless of the number of times you change jobs. But if your new employer operates a company pension scheme, it may be in your best interests to join it. You may still be able to contribute to your stakeholder pension as well. You must notify us of any change of employer.
How much can I pay into my plan each year?
You can pay the higher of either 100% of your earnings or £3,600, subject to the annual allowance.
The annual allowance is the maximum amount of pension savings you can get tax relief on each tax year – based on your own contributions, any employer contributions and any contributions made on your behalf by someone else. The annual allowance is £40,000 for most people in the 2019/20 tax year.
The annual allowance applies across all your pension savings, not per policy or plan.
The minimum contribution including tax relief to the RLCIS Stakeholder Pension is £20. This applies for both monthly contributions and single contributions.
We deduct monthly contributions either from your salary or by direct debit. Single contributions are payable by cheque.
What about tax?
Your employer will pay their contributions, including any tax relief.
You'll receive tax relief on the other pension contributions into your plan. But you won't receive tax relief on any waiver of contribution premiums. We claim the tax relief at the basic rate from HM Revenue and Customs and add it to your plan.
If you're a higher or additional rate taxpayer, you can claim the extra relief through your tax return.
What are the charges?
For plans set up before 6 April 2005 (and any additional payments subsequently made to these plans) there's an annual management charge of 1% of the value of the savings you build up. So for example, if your savings are valued at £500 throughout the year, we'll deduct £5 that year. If it's valued at £7,500 throughout the year, we'll deduct £75. When we set each day’s unit price, we allow for the annual management charge.
For plans set up after 5 April 2005 (and any additional payments subsequently made to these plans), there is an annual management charge of 1.5% of the value of the funds you build up. So for example, if your fund is valued at £500 throughout the year, we'll deduct £7.50 that year. If it's valued at £7,500 throughout the year, we'll deduct £112.50. On the 10th anniversary of your plan, the annual management charge will reduce to 1% of the value of the funds you build up.
These charges are regularly reviewed and may be changed in future.
What other benefits can I choose?
You can apply for waiver of contribution cover. This can provide cover for your pension contributions if you can't work because of sickness or accident.
What happens if I die before I retire?
If you die before you retire, we'll pay your beneficiaries the value of your plan.
Can I change my mind?
If we accept your application, we'll send you a notice of your right to cancel. When you get it, you'll have 30 days to change your mind and we'll give you and your employer your money back.