Features and benefits
- The Retirement Account is a pension plan that has two elements: a Pension Savings Account and a Pension Income Account. It allows single or regular savings, transfers, growth potential, lump sums & regular income withdrawals all in one tax-efficient product.
- It offers your client a flexible personal pension with a wide range of investment options, including our PruFund range of funds and hundreds of collective funds within one pension.
- Contributions can be made by the client, their employer, a third party or by transferring money from an existing pension scheme.
- It offers your client flexibility to change their retirement income in the future if their circumstances change.
- Your client can monitor their Retirement Account online at any time by registering for MyPru.
- Withdrawals could deplete the fund before death, your client could run out of money in their lifetime.
- The value of your client’s investment could go down as well as up. They may not get back what they have paid in.
- Inflation will affect the value of the money your client gets back.
About the Retirement Account
The Retirement Account has two parts, the Pension Savings Account and the Pension Income Account, and your clients can choose to invest in either or both of these parts. We also offer the flexibility to phase money from the Pension Savings Account to the Pension Income Account.
Pension Savings Account
Contributions and transfers are paid in and invested in this account, with the exception of drawdown to drawdown transfers.
From age 55, UFPLS (Uncrystallised Funds Pension Lump Sums) can be withdrawn from the Pension Savings Account.
Every time your client takes an UFPLS, 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.
Pension Income Account
- Investments from the Pension Savings Account are moved to this account to access drawdown and tax-free cash.
- Up to 25% of the amount can usually be taken tax-free, then the rest can be taken as taxable income if required.
- Transfers from other drawdown plans are paid in and invested here.
The Prudential Retirement Account is available to anyone who is a resident of the United Kingdom. It can be opened up on behalf of children under the age of 18.
Clients can make payments in to the Retirement Account until they are aged 75.
Money from another pension can be transferred in before and after the age of 75.
There is no maximum contribution or transfer amount, but for any requests to invest a total of £1 million or more, please contact your account manager.
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.
Our Retirement Account offers two drawdown options:
A form of drawdown which allows you to take an unlimited amount of income or lump sums from a pension fund.
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 Pension Savings Account into Pension Income Account.
- Pension pots or drawdown plans held with other providers can be transferred across quickly and efficiently.
Please remember that your client's fund could be depleted before their death and they may run out of money in their lifetime.
Taxation is dependent on your client's individual circumstances and can change in the future.
The Retirement Account offers a wide range of investment choices. Your client can hold any combination of investment options, including our established PruFund range of funds and hundreds of collective funds, within one pension.
Remember that the value of your client’s investment can go down as well as up. They may not get back what they have paid in.
PruFund range of funds
The PruFund range of funds aim to grow your client's money whilst smoothing the investment journey. For more information on the PruFund funds, see our PruFund Fund Guide (PDF).
For Expected Growth Rates (EGR) and historical performance, check our EGR hub.
Prudential Risk Managed Active Range
A choice of five risk-managed multi-asset collective funds each with its own risk profile, investing at least 70% in active collective investments. M&G Investment Management Ltd, part of the Prudential Group, are the investment managers for the Risk Managed Active funds. They make the relevant adjustments to the portfolio based on PPMG recommendations.
Prudential Risk Managed Passive Range
A choice of five risk-managed multi-asset collective funds each with its own risk profile, investing at least 70% in passive collective investments. M&G Investment Management Ltd, part of the Prudential Group, are the investment managers for the Risk Managed Passive funds. They make the relevant adjustments to the portfolio based on PPMG recommendations.
Your client can also access hundreds of collective investment funds from a variety of fund management groups, allowing them to choose funds with different managers or management approaches.
We provide a fund filtering tool, fund fact sheets and fund reporting documents to help you review and suggest the right investments for your client.
Other investment options
For even more choice, we also give access to other investment options, such as direct investment in UK and overseas stocks and shares, investment trusts and exchange traded funds through Stocktrade.
If your client invests in certain PruFunds from the PruFund range of funds, two different kinds of guarantee are available, at an additional charge.
- A capital guarantee that can secure all or part of certain PruFund investments at a set date in the future; this is the guarantee date.
- A minimum income guarantee that can secure a minimum income from all or part of certain PruFund investments in your Pension Income Account.
For more information, please download the Guarantee leaflet (PDF).
There are a number of charges which may apply to the Prudential Retirement Account:
- product charge
trading and nominees charges
There is more information on all of the applicable charges below. Alternatively, download our Fast Facts (PDF) document.
We will make an annual charge for administering the Retirement Account, taken monthly as a percentage of the Fund Value. The Fund Value may be eligible for a Fund Size Discount.
Total value of Retirement Account
Yearly Product Charge After Discount
£25,000 - £49,999
£50,000 - £99,999
£100,000 - £249,999
£250,000 - £499,999
£500,000 - £749,999
£750,000 - £999,999
The product charge is taken from all investments in the Retirement Account, including the Cash Account, and is deducted differently depending on the type of investment.
unitdeduction for guaranteed and non-guaranteed unit holdings.
Cash Account and Collectives
Payment made from the Cash Account of the Total Product Charge minus the PruFund Product Charge.
If the value of the Cash Account cannot cover the Product Charge, disinvestment of assets will be required.
For more information, including the charges and Fund Size Discounts, please see our Fast Facts document (PDF).
A daily charge by the fund manager for the management and administration of each fund your client is invested in. The impact of this charge is detailed in the personal illustration as Total Yearly Charge. For external funds, they are described as "ongoing charges" and quoted as a percentage in the Key Investor Information Documents (KIIDs).
It is described as Annual Management Charge for PruFunds and more details are available in the PruFund Fund Guide (PDF).
For all fund types, the charge is calculated daily and reflected in the fund's price.
Trading and nominee charges
Charges made for Stocktrade Investments are:
|An additional charge of £30 per trade will be applied where a trade is requested offline (phone, email, fax).|
Nominee charges of £20 per quarter (payable January, April, July & October) will also apply. There is no charge for transfer in of UK stocks but a £15 stock transfer out charge will apply.
There is a charge for both types of guarantee, taken monthly. The price paid is set when your client takes out a guarantee and applies for the length of time the guarantee is in place. Although our guarantee charges may vary in the future for other investments, your client will continue to pay the charge fixed at the beginning of their guarantee.
If a new guarantee is taken out, a different charge may apply.
If your client turns off a guarantee, they can't have another guarantee of the same kind for 12 months unless:
- they are adding a guarantee to new payments to their plan, or
- they have switched off a guarantee in their Pension Savings Account so they can move money to their Pension Income Account where they want a guarantee to apply
Guarantees may automatically come to an end on your client's death and can't be passed on to any beneficiaries. Beneficiaries will be able to take out guarantees of their own.
For more information on our guarantees, the charges applicable to them and how they work, please download our Guarantees available on PruFund investments in the Prudential Retirement Account (PDF) document.
Adviser charging options
The Retirement Account offers flexible adviser charging options, which you can tailor to your business model and client requirements.
The charge is deducted from the cash account or in line with the disinvestment profile provided if insufficient cash exists.
Adviser charges can be taken proportionally across all of your client's funds or you can specify which funds you want charges to be taken from.
Initial Adviser Charge
Deducted prior to investment for new business.
The initial adviser charge is taken from the cash account (disinvestment of assets will be needed if insufficient cash exists).
For single contributions and transfers, the charge can be expressed as a percentage of the contribution or a fixed monetary amount.
For regular contributions, the charge can be specified as a single percentage of the contribution, payable for a number of premium payments as agreed with your client.
For a percentage charge for initial advice on an unvested contribution the specified percentage is applied to the gross contribution, i.e the total of the contribution and the tax relief. The maximum amount is restricted to the value of contribution before tax relief is added.
Ad hoc Adviser Charge
Selected as a specified monetary amount.
The charge will be deducted from the cash account (disinvestment of assets will be needed if insufficient cash exists).
Ongoing Adviser Charges
Applied monthly, quarterly or annually - a fixed monetary amount or a percentage of the Account fund value.