This is the person entitled to receive the pension and is named on the retirement illustration.
Annuity. (see Pension Annuity) Can be bought with the funds from your money purchase pension scheme or your cash equivalent transfer value from a final salary pension scheme. The annuity provider agrees to pay you a pension income for the rest of your life.
Annuity rates are calculated by how long the annuity providers predicts the
annuitant to live and what rate of interest the annuity provider would
receive from your pension fund. Once the annuity provider has calculated the
risk they would use this to determine your monthly annuity amount. The
higher the annuity rate, the more pension you'll receive.
Is responsible for helping consumers understand financial services in the UK. It was established by the Financial Services Authority.
Pension rights built up from you ‘opting’ out of the State Second Pension (S2P, formerly State Earnings Related Pension Scheme). National Insurance contributions are refunded to your personal or occupational pension scheme for the period you’re contracted out, resulting in a reduction to your entitlement to S2P. There are restrictions on how and when these benefits can be taken.
Payments made by an individual or their employer to a pension scheme, to build up the pension rights or funds of an individual.
This is the annuitant’s civil partner as defined in the Civil Partnership Act 2004
This is the person (if any) named as the dependent on the retirement illustration or in the letter
An income paid to a dependent (spouse, registered civil partner or financially dependent partner) for the rest of their life following the death of the annuitant.
The pension income will be based on the percentage chosen by the annuitant.
These are improved or higher Annuity rates offered to an annuitant on the basis of reduced life expectancy in the opinion of the annuity provider. Annuity rates govern how much income will be offered in return for a given lump sum.
A pension scheme where benefits are based on length of service and pensionable earnings in the years leading up to retirement . These schemes are established by employers and are often referred to as defined benefit schemes.
A financial adviser is an individual or company who is authorised by the Financial Services Authority to provide advice on financial products and services. An Independent Financial Adviser (IFA) is authorised to provide advice for all products and services on the market, whilst a tied agent may only provide advice on the products and services of one or more specific providers.
To rely (either fully or partially) on another person's finances. An unmarried partner must prove financial dependence before they receive a dependant's pension (if this has been provided for by the Annuitant).
The Financial Services Authority is responsible for regulating the Financial Services industry. It provides information and advice for consumers on its website for a range of financial products and services, including pension annuities.
This is the minimum amount of pension a “final salary” scheme had to provide as one of the conditions of contracting out of the State Earnings Related Pension Scheme prior to 6 April 1997. If there is any GMP applicable to your plan, this will be shown on the retirement illustration.
This means Her Majesty’s Revenue and Customs. Where the context so requires it shall also mean the Board of Inland Revenue.
This is an alternative to buying a pension annuity where you receive income directly from your pension fund. This is not something Pension Annuity UK offers, however we have teamed up with specialists that we can put you in contact with if you would like advice.
A general increase in the price of goods and services. The Retail Prices Index (RPI) is the primary measure of inflation in the UK and will show as a positive figure during times of inflation.
An upper limit placed on individuals’ maximum retirement benefits by HM Revenue & Customs (HMRC). Benefits that exceed the allowance will incur a tax charge. The Lifetime Allowance for the tax year 2010/11 is £1.8m. It is expected to remain at this level until tax year 2015/16.
A pension provided from a registered pension scheme under a “money purchase arrangement”. The plan is purchased from an insurance company of the annuitant’s choice and must satisfy the conditions set out in paragraph 3 of Schedule 28 to the Finance Act 2004.
A pension scheme to which personal and employer contributions can be invested. At retirement the funds built up are used to provide retirement benefits. They are often referred to as defined contribution schemes and include all personal pension schemes.
A general decrease in the price of goods and services often referred to as deflation. The Retail Prices Index (RPI) is the primary measure of inflation in the UK and will show as a negative figure during times of negative inflation (or deflation).
A pension annuity, which pays an income to the annuitant for the rest of their life, which won't fall from one year to the next. Pension annuities convert the proceeds of a pension scheme into a pension income.
This is the legal requirement placed on the pension providers and should be clearly shown in your retirement pack. The Open Market Option allows customers the opportunity to maximise their retirement income by requesting quotations from other annuity providers.
Can be bought with the funds from your money purchase pension scheme or your cash equivalent transfer value from a final salary pension scheme. The annuity provider agrees to pay you a pension income for the rest of your life.
Your pension fund is the total amount that you have available from contributions you, your employer or another third party have been making into a pension plan throughout your lifetime.
A form of 'contracted-out' benefits (see 'contracted-out benefits').
This is the retirement date as shown in your retirement illustration.
A registered pension scheme is one that has been registered with HM Revenue & Customs under part 4 of the Finance Act 2004. Pension fund savings built up within registered pension schemes are tax privileged and contributions to them will usually benefit from tax relief.
The Retail Prices Index is the primary measure of inflation in the UK and is compiled by the Office of National Statistics. The index tracks the prices of a representative 'basket' of (retail) goods and services on a monthly basis.
The additional pension provision of the state pension scheme, which is related to the slice of earnings between the lower and upper earnings limits. These limits apply to those earnings on which National Insurance contributions are payable and will change each year.
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