Link Administration Holdings Limited completes its purchase of the Capita Asset Services division of Capita plc.
This is the hub for all the questions we get asked on a regular basis. We’ve split it into three sections so it’s easy to find an answer. And if you have a question we haven’t answered, please get in touch using the details below.
A pension is a way of saving for your retirement that has special tax arrangements to encourage you to save.
The government want to encourage us to save for our retirement, so they give you tax relief on the amount you save. So, as a 20% taxpayer, if you were to invest £100, tax relief would be added of £25 which is 20% of the gross contribution. If you pay higher-rate or additional-rate tax you may be able to claim further tax relief through your self-assessment form or by contacting HMRC.
You can pay as much as you like into your pension each year. You will receive tax relief on 100% of your earnings up to the Annual Allowance, which is £40,000 for the 2016/17 tax year.
The Annual Allowance is the amount of money you can save into your pension each year while still receiving tax relief. For the 2016/17 tax year the Annual Allowance is £40,000 or 100% of your salary if that is less. If you exceed this limit you won’t receive any tax relief on the amount over the limit, and you may incur a tax charge. If you are not earning enough to pay income tax, you can still receive tax relief on pension contributions up to a maximum of £3,600 a year.
The amount of money you can save in to defined contribution pensions, across all the schemes you belong to, and receive tax relief on reduces to £10,000 each year when you start to take flexible income from your pension. Any pension contributions over this amount will incur an Annual Allowance charge.
The Lifetime Allowance is the total amount of tax relieved pension savings you can build up over your lifetime without triggering an extra tax charge. For the 2016/17 tax year it is £1 million. You may incur a charge when you go over this limit if you have not protected your savings. If you think you may breach this limit, we recommend you take financial advice.
Your payments are invested in funds that you choose when you set up a plan.
You must be at least 55 before you can take your pension savings. Sometimes you can get access to your money before 55 if you retire early because of ill health or incapacity. Your pension provider will be able to give you details.
There are many ways to take your pension savings and you can manage how you take lump sums or income in a way that suits your needs as you go through retirement. Read about your options here.
If you have an LFS pension, are aged 55 or over and want to access your pension savings, call us on 0345 055 0606 to discuss your options.
You can normally take up to 25% of your pension savings as tax-free cash. The remaining 75% will be taxed as income.
You can take your savings from age 55. Please bear in mind that we use your selected retirement date to calculate the value of your pension savings, so if you take any money out earlier, your pension value may not be as much as you were expecting.
If you have less than £10,000 in your pension pot, you may be able to cash it in as a small lump sum payment. You can take up to three personal pension pots (up to £10,000 each) as small pot lump sum payments in your lifetime. You usually need to be age 55 or over, unless you are retiring early due to ill health. Usually 25% of your lump sum will be tax-free but you’ll be taxed on the remaining 75% at the basic rate.
If you have over £10,000 in your pension pot, you will need to speak to your provider about the options they offer. You may need to transfer to another provider.
This depends on how you want to take your money. There are many ways to take your pension savings. Read about your options here.
Usually, yes. This will alter the date you decide what to do with your pension savings.
To do this you’ll need to take out a flexible income plan (a drawdown plan) that allows you to keep your pension savings invested. There are many ways to take your pension savings. Read about your options here.
Pension Wise is a government service that offers people approaching retirement free, impartial guidance about their choices. Pension Wise will provide tailored guidance to explain what options you have and help you think about how to make best use of your pension savings.
A regulated financial adviser who specialises in retirement planning can advise you about what’s best for your circumstances. You can find an FCA authorised financial adviser at www.unbiased.co.uk or www.findanadviser.org.
Why are you terminating the CF Index Linked Gilt Personal Pension Fund, CF Emerging Markets Opportunities Personal Pension Fund, CF Japan Opportunities Personal Pension Fund, CF Pacific Opportunities Personal Pension Fund, CF US Growth Personal Pension Fund, CF Global Equity Personal Pension Fund, CF European Growth Personal Pension Fund, CF UK Index Personal Pension Fund, CF UK and Irish Personal Pension Fund and CF UK Growth Personal Pension Fund?
As at 25th January 2017, we consider that each of the terminating sub-funds is not cost-effective as the size of each of the terminating sub-funds is very small.
These changes will affect you if you have holdings in one of the terminating funds or in the CF Multi-Asset Personal Pension Fund.
The covering letter you received with your copy of the Circular details your holdings in each fund. The letter also confirms if your plan is held through the Lifestyling option.
Use the “what to do with this pack” on page 2 of the Circular to see which sections are relevant to your holdings.
For example, if your holding is in the CF Multi-Asset Personal Pension Fund, please read sections 1 and 3 of the Circular. If your plan is held in the lifestyling option, please read section 4.
Read the relevant sections of the circular, you may wish to speak with your professional advisor.
Your decision on what to do with your benefits under the Trust is important and we recommend that you access pensions guidance, and consider taking independent advice, to help you decide which option is most suitable for you.
Pensions guidance, given by a designated guidance provider, is available to help you to understand your options in relation to what you can do with your benefits under the Trust.
Pensions guidance may be accessed from Pension Wise on the internet (at www.pensionwise.gov.uk), by phone or face to face. You can book a telephone or face to face appointment on-line or by calling 0800 138 3944. Pensions guidance is free and impartial from Pension Wise.
If your holdings are in terminating funds only then you need to read section 2 of the circular to understand your options.
Your holdings will be transferred into a default fund if you do not return the form of direction.
If you currently hold units in CF Index Linked Gilt Personal Pension Fund we will automatically transfer your units to CF UK Gilt Personal Pension Fund;
If you currently hold units in any of the other Terminating Sub-Funds we will automatically transfer your units to CF Global Equity Personal Pension Fund. See Section 3: Establishment of A New Sub Fund for further details of this new fund.
If your holdings are in continuing funds then you do not need to take any action and your holdings will not be switched from that fund.
If you do nothing and your units are automatically transferred under this option then it will be effected on the basis that no switching fee, redemption charge or initial charge will be applied to the units which are switched or the units purchased in the CF UK Gilt Personal Pension Fund or the CF Global Equity Personal Pension Fund, as the case may be.
You do not have to do anything for the continuing funds. With regards to the terminating funds you have three options:
Option 1: You do nothing - your units will automatically be transferred to a Continuing Sub-Fund
Option 2: Switching prior to termination - you may elect to exchange your units in the Terminating Sub-Funds for units in a Continuing Sub-Fund prior to the Effective Date
Option 3: Transfer to another pension provider
An example of how to complete a Form of Direction when choosing Option 2 is provided in the circular.
You can return the form by post included in the Circular to CFML, PO Box 1043, Cheltenham, GL50 9JB;
email a scanned copy of the completed form or confirm your instruction within the body of the email to the following email address PPPadmin@capita.co.uk; or
fax a copy of the completed form of direction to 0345 055 0605.
24th March 2017 is the return date stated in the Circular. The form(s) can be posted to our address to CFML, PO Box 1043, Cheltenham, GL50 9JB; by email to PPPadmin@capita.co.uk; or by fax to 0345 055 0605.
You can email us directly on PPPadmin@capita.co.uk noting your request to transfer to another pension provider or return the form of direction ensuring Option 3 has been ticked. We will then send you all the necessary transfer forms.
If it is not possible to affect the transfer before the 29th March we will transfer your investment to one of the continuing sub-funds as outlined in Option 1 of the Circular until you are able to arrange for the transfer to take place.
You should be aware that there may be a delay between us receiving your request to transfer your investment to an alternative provider and that transfer being completed. During this time you will continue to be invested in the terminating sub-funds or, for any period after 12 noon on 29th March 2017, in the Continuing Sub-Fund set out in Option 1. The value of your units at the point of transfer may be higher or lower than the value on the date on which we receive your request.
No charge for making the transfer will be applied by us but your new provider may make a charge.
Your holding will be effect on 1st April. You will receive confirmation within 28 days of the effective date.
Unitholders in the CF Multi-Asset Personal Pension Fund should be aware that it is expected that the manager of the current underlying fund will make a charge to cover the costs of dealing in the assets of that underlying fund to effect the transfer to the new underlying fund. This is known as dilution levy and we estimate that this dilution levy will mean that every 100 pence held in Units at the time of the transfer will be worth approximately 99.60 pence at the point the Sub-Fund is invested in the new underlying fund.
It should be noted that the current annual management charges for the funds includes a management charge imposed by the underlying fund. Following the change to investment in the Fund, although the underlying fund will continue to apply a management charge on investments held in the underlying fund, this amount will no longer be included in the annual management charge of the sub-fund.
The ongoing charges figures (OCF) are included within the circular.
We are not offering this option at this time.
The risks associated to the continuing funds are explained in the table below. This can also be found in Appendix B of the Circular.
The Circular can be printed from the following news page on our website, Changes to the CF Personal Pension Trust.
This can be accessed via What's New at the bottom of any page on this website.
Please refer to section 4 of the Circular and consult a financial advisor. You can also seek free advice at www.pensionwise.gov.uk.
No, Direct Debit payments will be processed as usual.
Please consult a person authorised under the Financial Services and Markets Act 2000 to advise on the best option available to you. Such a person would be your stockbroker, tax advisor, accountant or other financial advisor.
You can also seek free advice on www.pensionwise.gov.uk.
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Link Fund Solutions Limited
PO Box 1043
A government service that offers people approaching retirement free, impartial guidance about how to make best use of their pension savings.
030 0330 1001
Link Administration Holdings Limited completes its purchase of the Capita Asset Services division of Capita plc.
Significant changes to the CF Personal Pension Trust and your investment will take place at the end of March 2017.
Pension fund manager Jessop Fund Managers (JFM) has continued its growth with the acquisition of the Legal & General Stakeholder Pension Scheme.