For UK financial advisers only. Not approved for use by customers. Visit the Prudential customer website For UK financial advisers only. Not approved for use by customers. Visit the Prudential customer website
Flexible Retirement Plan

Flexible Retirement Plan

A personal pension plan with SIPP and flexi-access drawdown options designed to help your clients save for retirement whilst meeting changing circumstances.

  • Extensive fund choice

  • Income flexibility

  • Invest from just £100 per month

  • SIPP option

  • Benefit and drawdown options

  • Transparent charging

Product details

Features and benefits

  • A flexible personal pension offering an end-to-end retirement planning solution - your client can keep their pension savings in one place, take a lump sum, regular income or purchase a pension annuity.
  • Extensive choice of investment funds - your client has the choice of over 100 funds, including our multiasset funds managed by Prudential's Portfolio Management Group, and can select up to 20 funds at any time. Optional fund guarantees are available within the PruFund Protected Funds at an extra cost.
  • Self Invested Personal Pension (SIPP) option which allows broader investment choices.
  • Your client can move into drawdown from age 55, taking a lump sum or regular income, while leaving the remainder of the investment to grow.
  • Flexible and transparent charging means that your client is only charged for the features used and investments required.

The value of an investment can go down as well as up. Your client could get back less than they have paid in.

 

About the Flexible Retirement Plan

The Flexible Retirement Plan offers your client flexibility and choice as they save for retirement and take retirement income. They can choose from Personal Pension and Self-Invested Personal Pension (SIPP) options with a wide range of investment choices including The PruFund Fund Range and With-Profits funds. The SIPP provides access to an even wider choice and type of investment.

The plan also offers flexibility over when and how to take an income. Your client can choose from one or more of the following options:

  • A single or regular series of lump sums from pension savings – Uncrystallised Funds Pension Lump Sum

  • Flexi-access drawdown – allows your client to take an unlimited amount of income or lump sums

Eligibility

Your client must be a UK resident.

Eligibility

Personal Pensions

Drawdown

Minimum age at entry

17 next birthday

Usually 55 even if still working*

Maximum age at entry

75 next birthday

89 next birthday

Maximum age at exit

75

99

*  May be earlier if in ill health or if member has protected pension age or is already in drawdown.

For drawdown and drawdown to drawdown transfers, clients must select an Anticipated Annuitisation Age which must be between age 56 and 99.

Contributions

  • Minimum single contribution to start the plan: £5,000

  • Minimum regular contribution to start the plan: £100 per month or £1,200 per year

  • Minimum additional contribution: £200

  • Maximum contribution: £1,000,000

Please speak to your account manager if your client requests to invest more than the maximum contribution.

If your client chooses to invest in the Self-Invested Fund under either of the SIPP options, they must invest at least £10,000.

Annual and Lifetime Allowance pension limits will also apply, set by the government.

Transfers

Transfers in

We provide a streamlined transfer desk service to support the transfer process, which will secure the transfer values, deal with the ceding provider and invest your clients funds within five working days of receiving the final requirements.

Our Transfer Value Analysis System (TVAS) is also available to you, providing clear information on the implications of transferring your client’s pension benefits.

Contact the Transfer Desk on 0808 234 0808 between 8.30am and 6pm, Monday to Friday. Alternatively, email sales@prudential.co.uk or contact your Prudential Account Manager. Remember to avoid sending any personal or confidential information by email. We advocate strong security and privacy principles. 


Download the Flexible Retirement Plan Transfer Application form (PDF)

Transfers out

The funds in your client's FRP can be transferred to another pension arrangement at any time.

If your client has invested in the With-Profits Fund and transfers this out at any time other than their Selected Retirement Age (SRA), or in Drawdown at their selected Anticipated Annuitisation Age (AAA), a Market Value Reduction (PDF) may be applied.


Transfer Limits
Personal Pension
  • Minimum initial investment: £5,000

  • SIPP minimum investment: £10,000

  • Minimum additional transfer: £200

  • Maximum aggregate transfer: £1,000,000

For transfers of more than £1m, contact your Account Manager. 

Drawdown
  • Minimum initial investment for existing FRP customers: £10,000 if total fund under FRP, including SIPP, is at least £50,000

  • Minimum initial investment for new FRP customers: £25,000 (before tax-free cash) if total pension fund value is at least £50,000 (and £37,500 if transferring from an existing drawdown plan)

  • Minimum additional transfer: £10,000 (£7,500 for drawdown to drawdown transfers)

  • Maximum aggregate transfer: £1,000,000

For transfers of more than £1m, contact your Account Manager. 

Death benefits

Your clients can nominate to leave funds on death to beneficiaries such as their spouse, partner or dependants.

The rules that apply on death will depend on whether the customer is in drawdown (vested), or their fund remains in the Personal Pension (unvested); or if they have gone on to buy an annuity.

Members can specify how they want any death payments distributed by completing a Nomination of Beneficiary form( PDF).

For more information on death benefits, download our Key Features Document (PDF).

Lump sum

A lump sum can be taken by the beneficiary if the FRP customer dies before or after reaching retirement.

Income options

If your client dies before the age of 75 all benefits, lump sum or income, will be tax-free if we pay out within two years of the notification of death. If death occurs after age 75 then all benefits, lump sum or income, will be subject to the recipient’s marginal rate. 

If your client purchases an annuity, they have the option to choose a spouse/civil partner or dependant to receive an income on their death - provided the annuity is in payment on the date of death. They can also choose a guarantee period so income continues until the end of the period (to the beneficiary or estate). If the customer dies whilst in FRP - the spouse/dependant can also choose to purchase an annuity.

Tax on death benefits

Tax payable depends on individual circumstances and on the types of death benefits. 

Spousal Bypass Trust

A Spousal Bypass Trust can help reduce liability to Inheritance Tax by accepting any death benefits. Trustees can then administer the trust and pay benefits to the beneficiaries.

Customers may wish to seek legal advice before completing a trust form. See more on the Spousal Bypass Trust.

Drawdown

Drawdown allows clients to take a tax-free lump sum and income payments directly from their pension fund, thereby allowing potential investment growth on the remaining fund.

Clients can normally start taking pensions benefits from drawdown from age 55.

The Flexible Retirement Plan offers two drawdown options:

Flexi-access drawdown
  • A form of drawdown which allows you to take an unlimited amount of income or lump sums from a pension fund.

Capped Income Drawdown
  • Restrictions apply to the amount of income that can be withdrawn.

  • Capped Drawdown is no longer available for new arrangements and can only be taken if transferring from an existing Capped Drawdown arrangement.

  • Our Capped Drawdown GAD Calculator can be used to find out the monthly gilt yield and impact of this on the amount of income that can be taken from income drawdown as well as seeing historic gilt yields in a chart and table format.

  • Three yearly income reviews are required.

Benefits of drawdown
  • Currently up to 25% tax-free lump sum can be taken, and without starting to take a regular income.

  • Client control over investment - may be able to take an increasing income if investment grows, but equally, this may be reduced if it falls in value.

  • Investment continuity for clients moving from our Personal Pension into drawdown. If your client is in the With-Profits Fund and we sell the units then an MVR might apply.

  • Pension pots or drawdown plans held with other providers can be transferred across.

  • Clients have flexibility to phase the movement of funds from the Personal Pension option to the drawdown option, or split a pension fund between drawdown and an annuity purchase for example.

Tax is dependent on your client's individual circumstances and can change in the future.


UFPLS (Uncrystallised Funds Pension Lump Sum)

Every time your client takes a cash lump sum, 25% will usually be tax-free and the rest of the money will be added to any other income your client has and taxed accordingly.

Investment Options

The Flexible Retirement Plan offers a wide range of investment choices. Your client can invest in up to 20 funds at any time.

Our FRP fund guide (PDF)  has more information on the full range of funds available.

With-Profits

Our With-Profits Fund is one of the largest and financially strongest With-Profits Funds in the UK. It aims to smooth some of the extreme ups and downs of short-term investment performance in order to provide a more stable return over the medium to long term.

See the With-Profits Guide (PDF) for more information.

With-Profits Guarantee

Market Value Reductions (MVR) are our way of protecting the interests of all our With-Profits customers, balancing the interests of continuing investors with those who wish to cash-in their plan.

We guarantee not to apply a MVR on death or at Selected Retirement Age, or in Income Drawdown at the Anticipated Annuitisation Age.

There is a charge to pay for all the guarantees the With-Profits Fund supports, which is taken by making small adjustments to regular and final bonuses.

Learn more about when an MVR may or may not apply in our Market Value Reduction Explained document (PDF).

PruFund Funds

A range of funds invested in our With-Profits Fund, delivering different returns due to the established smoothing process, asset mixes and fund objectives.

Your client can choose from:

  • Risk Managed PruFunds with differing equity content to suit different risk attitudes.
  • Growth and Cautious PruFunds.
  • Protected PruFunds with guarantee terms available.

Growth & Protected Growth

Cautious & Protected Cautious

PruFund 40 - 80

PruFund 20 - 55

PruFund 10 - 40

PruFund 0 - 30

For more information on the PruFund range of funds, see our PruFunds Guide (PDF).

For Expected Growth Rates and historical performance, see our EGR tool.

PruFund guarantees

We offer guarantee terms for both the PruFund Protected Cautious Fund and PruFund Protected Growth Fund to ensure that at the end of the selected guarantee term the fund will be worth at least the amount your client invested (subject to charges, enhancements or withdrawals).

Each guarantee has its own charge, which will be payable for the whole of the guarantee term.

Detailed information about the guarantees and their charges is available in The PruFund Range of Funds: Guarantee Options (PDF).

Dynamic Focused Portfolios

Our Dynamic Focused Portfolios are designed to meet different investment objectives and help target different attitudes to risk.

The portfolios contain different proportions of high and lower risk assets to target different goals and needs.

  • Dynamic Focused 20 - 55
  • Dynamic Focused 0 - 30

More information on Dynamic Focused Portfolios

Dynamic Portfolios

Our five Dynamic Portfolios are designed specifically to meet different investment objectives and match different attitudes to risk.

These benefit from ongoing active management, to ensure the asset and fund mix meets the risk objective.

  • Dynamic 60-100
  • Dynamic 40-80
  • Dynamic 20-55
  • Dynamic 10-40
  • Dynamic 0-30

More information on Dynamic Portfolios

SIPP options

Two SIPP options are available with our FRP, administered by experienced and award-winning SIPP provider Suffolk Life.

Full SIPP option – offers an extensive range of investment options with the ability to invest in an allowable range of commercial property, stocks, shares, unit trusts, Open-Ended Investment Companies (OEICs) and the Cofunds fund range.

FundSIPP option – lower cost option, your clients can choose up to 20 funds from around 1,500 within the Cofunds range.

Both options are accessed through the Self-Invested Fund (SIF), which can be switched on or off at any time when in the Personal Pension and/or Income Drawdown. One SIF account is held covering all plans within the FRP.

There are no fees payable unless a SIPP is activated. Download a full list of SIF fees for more detail.

SIPP benefits

  • Ability to appoint an investment manager or stockbroker.
  • Low-cost execution only share dealing service through Stocktrade.
  • Detailed annual reporting of SIPP assets and transactions.
  • Use secure online services to manage your client's SIPP efficiently and make transactions as quickly as possible.
  • Basic rate tax relief paid to the pension by HM Revenue & Customs on pension contributions.

See the Key Features document  for more information on the SIPP options.

Charges

The main charges will be:

  • Product charges (including Annual Management Charges and guarantee charges)
  • Adviser charges
  • SIPP charges (if applicable)

Your client may also benefit from Fund Size Discounts or loyalty discounts.

Product charges

For more information on all potential product charges, please download the Fast Facts document.

Annual Management Charge (AMC)
  • Taken every year from each of the funds invested in (except the Self Invested Fund).

  • Covers the cost of setting up the Plan and managing the investment.

  • Each fund has a different AMC, outlined in the Fund Guide.

  • Charge is taken as a percentage of fund value.

With-Profits Fund
Annual Management Charge
  • Dependent on the performance of the fund, the investment return and our expenses.

  • Charge is taken into account when calculating bonus rates for the With-Profits fund.

Charges for guarantees
  • There is a charge to pay for all guarantees the With-Profits Fund supports.

  • We guarantee not to apply a Market Value Reduction when payments are made because of death or at Selected Retirement Age.

  • Taken by making small adjustments to regular and final bonuses.

  • Charges may vary.

PruFund Funds
Annual Management Charge
  • Taken by deducting a percentage of the units every month.

  • A full month’s charge will be taken even if the investment is for part of the month.

Charges for guarantees

Fund switching

Switching between funds is currently free and can be done at any time. There is no minimum switch amount. The maximum number of funds a client can invest in is 20.

There are restrictions for switches into the With-Profits Fund and switches out may be subject to a Market Value Reduction (MVR).

Clients cannot switch into the PruFund Protected Funds if the remaining term is less than the minimum guarantee term available.

The minimum guarantee term time is a fixed date in the future, for example 8, 9 or 10 years.

Further details on fund switching can be found in the Key Features brochure.

Charges for other funds

For specific fund charges, see our Short Fund Guide.

Adviser Charges

The level and shape of Adviser Charging is agreed between you and your client.

There are three types of Adviser Charges:

Set-up Adviser Charge
  • Deducted from the gross contribution before it is invested in the plan.

  • Can also be taken as a percentage of the regular contributions.

  • Must be agreed at the start of the plan.

Ongoing Adviser Charge
  • Agreed with your client and paid from the Plan by Prudential.

  • Can be a specified monetary amount or a percentage of the fund value.

  • Can be paid monthly or annually in arrears.

Ad hoc Adviser Charges
  • Charges for advice provided to be agreed with your client.

  • Taken from an insured funds held or from the Self Invested Fund.

Find out more about Adviser Charging in the Fast Facts document.

SIPP charges

There are no fees payable unless a SIPP is activated. Download a full list of SIF fees for more detail.

Discounts

Your client could benefit from Fund Size or loyalty discounts on the AMC, dependent on the size of their fund and length of investment.

Loyalty and Fund Size Discounts don't apply to investments in the Self-Invested Fund (SIF) or FRP Holding Account. However, if investments are transferred out of the SIF and the money reinvested in other funds within the plan, the period of continuous investment includes the time in the SIF.

Fund Size Discount

Your client could benefit from discounts on the AMC, dependent on the size of their fund.

Fund Size*

Fund Size Discount from Annual Management Charge

 

Less than 25,000

Nil

25,000-49,999

0.1%

50,000-99,999

0.2%

100,000-249,999

0.25%

250,000 and over

0.3%

*Fund size includes all Flexible Retirement Plans and Income Drawdown plans.

The discount to the Annual Management Charge will apply to the whole investment, not just the portion above the threshold levels shown above.

Loyalty discount

Investment Period

Loyalty Discount from Annual Management Charge

Less than 5 years

Nil

5-9.99 years

0.05%

10-14.99 years

0.1%

15 – 19.99 years

0.2%

20 years or more

0.25%

250,000 and over

0.3%

The discount to the Annual Management Charge will apply to the whole investment, not just the portion above the threshold levels shown above.

Market Value Reduction

Market Value Reductions (MVR) are our way of protecting the interests of all our With-Profits customers, balancing the interests of continuing investors with those who wish to cash-in their plan.

For investments in the With-Profits Fund, an MVR may apply if the client withdraws funds or if the plan is cashed in. We guarantee not to apply an MVR on death or at the Selected Retirement Age.

Learn more about when an MVR may or may not apply in Your With-Profits Plan – a guide to how we manage the fund (PDF).

© Prudential 2018