Your resource hub for the Standard Life Staff Pension Scheme

If you have DB in the Scheme, your accrued pension at the earlier of 15^th April 2016 and your date of leaving is revalued from that date up until you retire, to help protect it against inflation. You can obtain a projection of your DB pension to any age from 50 by using Mercer OneView, subject to exclusions (See OneView exclusions Guide under Actions). Mercer will have to calculate it for you if you want a formal quote. Any DB pension figure is stated as an annual amount and is subject to income tax.

If you have DC in the Scheme, the value of this benefit will change in line with daily fund price fluctuations. The value at retirement is not guaranteed. The value at retirement depends on how much you pay into your pension, where your money is invested and how it performs and how long you’re invested. You can manage your DC investments online via the Standard Life dashboard or by downloading the Standard Life app. Information about the investment options are provided in the Defined Contribution - Investment Guide which can be found in the Education section.

You can view the value of your DC plan via the Standard Life dashboard or app. DC projections can also be obtained from Mercer, but please note that your projection will be subject to price changes until you settle your benefits. Therefore, even the value provided to you in a formal quote will not be guaranteed.

Examples of how you can use your DC either in isolation or in conjunction with your DB at retirement (or at transfer) are provided in the Retirement and Transfer Guides in the Education section.

As of 16^th April 2016 the DB section of the Scheme closed to future service accrual. If you are an active member you can change the contributions which are paid into the DC section, and potentially improve the benefits available to you at retirement. The base contribution made by your employer is 16% of pensionable pay. Your employer will then match any contributions you make up to 2% as well as uplifting your contribution by 10%, as demonstrated in the following table:

It's important to routinely check whether your pension contributions and investments are on track to give you the income you want in retirement - if there's a shortfall you need to look at ways of boosting your savings. Depending on your taxable income, most people are eligible to get tax relief on pension savings of up to £40,000 each year, so it may be worth topping up your pension contributions when you can afford it. More information on pension savings allowances can be found in the ‘Pension Allowances’ section of the FAQ.

You can check the value of your DC section investments online.

You can change your DC section investments online.

The Lifetime Allowance (LTA) is the total amount you can have in your pension(s) before a LTA tax charge needs to be paid.

The LTA has been around since 6^th April 2006 and is currently £1,073,100 for the tax year 2021/22.

In March 2021 the government announced that the LTA will be frozen for the next five tax years. This means it will remain at the current rate of £1,073,100 up to and including the 2025/26 tax year.

Recently, the LTA has been increased each April in line with inflation, as measured by the Consumer Prices Index (CPI), but now the next increase is not due until 6 April 2026.

The freeze means that, in the long run, more people with significant retirement savings could exceed the Lifetime Allowance and therefore be liable to the tax charge.

Mercer can tell you how much LTA you have used up with your SLSPS pension savings. If you have other pensions you will need to contact the provider of these to understand your full LTA usage.

You can find out more on LTA on the government's website.

What happens if you go over the allowance?

When you choose to take benefits above the LTA, they will be taxed as follows:

  - Lump Sum – a 55% tax charge applied for the amount of savings over the LTA.
  - Pension income or drawdown – a 25% tax charge applied for the amount of savings over the LTA

There are various types of Protection that HMRC have made available, however you can now only apply for Individual Protection 2016 and Fixed Protection 2016 – more information on these can be found on the government website.

If you have any of the Protections, it is important that you provide Mercer with a copy of the certificate so that they can consider it when you access your benefits.

You may be able to opt-out of accruing benefits to mitigate the risk of attracting an Annual Allowance charge.

  - To opt-out of the SLSPS please contact your Employer, but we recommend speaking to your financial adviser before doing this

The Annual Allowance is the total payments that you, your employer and any third party (excluding transfer payments) can make across all your DC pension plans in any one tax year before being subject to a tax charge plus in some circumstances it includes the amount by which any DB savings grow.

The current Annual Allowance for most people is £40,000 per tax year.

You may be able to carry forward any unused Annual Allowance from the previous three tax years to let you pay more in the current tax year. However, your payments cannot exceed 100% of your earnings in the current tax year to still be eligible for tax relief.

A lower allowance may apply depending on your individual circumstances – please see section on Tapered Annual Allowance and Money Purchase Annual Allowance.

The Tapered Annual Allowance is a reduced allowance that applies to individuals earning an adjusted income over £150,000 between 6 April 2016 and 5 April 2020, and over £240,000 from 6 April 2020. However it doesn’t apply to individuals with threshold income of less than £200,000.

We recommend you speak to your tax adviser to establish your threshold and adjusted income as the calculation of these is not straightforward. For more details see gov.uk.

For 2020/21, for every £2 of adjusted income over £240,000 the individual’s Annual Allowance is reduced by £1. The minimum Annual Allowance is £4,000.

The Money Purchase Annual Allowance (MPAA) applies to anyone who has taken their pension benefits ‘flexibly’. This includes withdrawals from a drawdown arrangement or payment of an Uncrystallised Funds Pension Lump Sum (UFPLS).

This limits the annual amount you can pay into a DC pension to £4,000 without a tax charge applying.

For more information on the MPAA please see the government guidance.

If you are an active member of the SLSPS you could be accruing saving in one or both of the following ways:

  - You could be receiving contributions into the DC section
  - If you elected to retain salary linkage in the calculation of your DB benefits from 1 January 2008, and the effect of your salary increase exceeds the increase stipulated by legislation (the increase in CPI) in any given tax year
  - If you elected to sacrifice salary linkage in the calculation of your DB benefits from 1 January 2008 in exchange for Career Average Revalued Earnings accrual, your revalued DB pension may also exceed the increase stipulated by legislation

These accruals could trigger an Annual Allowance charge if they cause you to breach the limits described above. Between July and September every year, Mercer will send you a Pension Input Statement that illustrates the contributions received by the DC section on your behalf, and/or the increase in you DB benefits over the previous tax year. You may be able to temporarily opt-out of accruing benefits to mitigate the risk of attracting an Annual Allowance charge. If you do attract a charge, you may be able to ask the SLSPS to pay the charge from your Scheme benefits (Scheme Pays).

  - To opt-out of the SLSPS please contact your Employer, but we recommend speaking to your financial adviser before doing this
  - For more information on Scheme Pays see the FAQs section above and contact Mercer

Scheme Pays is a process which allows you to pay your annual allowance tax charge, if applicable, from a pension scheme. Instead of you paying the charge directly, the SLSPS pays the annual allowance tax charge to HMRC on your behalf and the corresponding value is deducted from your pension benefits. If you are an active member, Mercer will provide you with a Pension Input Statement each year and a link to HMRC’s Annual Allowance calculator. You are eligible to use Scheme Pays if the charge is at least £2,000 and you have at least the value of the charge in benefits held in the SLSPS at the time of payment. 

To use the Scheme Pays facility, or for more information, please contact Mercer at standardlifepensions@mercer.com or by calling 0345 600 0229

If you have elected to aggregate your DB and DC savings to calculate the maximum cash, you may have DC in excess of the tax-free amount remaining. Your options are to take the excess as an UFPLS, use it to buy an annuity or to transfer it to another arrangement that allows you to "drawdown" on your DC savings.

If you take your tax-free amount from your DC savings and your DB benefits separately, then your options in relation to your excess DC cash are to take it as an UFPLS, use it to purchase an annuity or transfer it another arrangement that allows you to “drawdown” on your DC savings.

Depending on when you joined the Scheme, you may have a right to take early retirement from the Scheme at age 50, instead of the normal minimum age of 55. Members with a protected early retirement age of 50 can take their retirement benefits from age 50 from the Scheme. Members without a protected early retirement age can take their retirement benefits from age 55 from the Scheme, which is the current normal minimum pension age for HMRC purposes.

If you have a protected early retirement age, this will usually be lost if you transfer your benefits out of the Scheme. However, if you and at least one other member of the Scheme transfer your benefits to the same receiving scheme at the same time, and certain requirements imposed by HMRC are met, HMRC has confirmed to the Scheme that the protected early retirement age will not be lost as a result of the transfer.

This would mean it may be possible for you to take your retirement benefits from age 50 in the receiving scheme, provided the rules of the receiving scheme allow that to happen.

This is known as a ‘buddy transfer’. The other transferring member does not need to have a protected early retirement age. Please ensure that you ask your IFA and the receiving scheme to confirm that you will be able to take your retirement benefits from age 50.

If you intend to transact on a “buddy transfer basis” you and the other member must each complete the Scheme’s block transfer agreement, which is enclosed with your transfer pack, and return this with your ‘application to process with transfer of benefits’ form.

If you have agreed with more than one other member of the Scheme that you will transfer your benefits to the same receiving scheme at the same time, please contact Mercer to request a block transfer agreement suitable for use where there are more than two members involved.

You can log on the Mercer Oneview site and get an indicative transfer value figure at any time. The Oneview site also has details of the current value of your DC pot. This is just an illustrative figure and is not a formal CETV quote. There are no restrictions on how often you can access Oneview for an indicative transfer value figure.

If you want a statutory formal guaranteed CETV quote then you need to contact Mercer on 0330 100 3491 or by e-mail at: standardlifepensions@mercer.com to request this. Your adviser will need the formal guaranteed CETV quote before they can give you advice.

Please note that, in line with statutory requirements, you are only entitled to one guaranteed CETV quote in any 12-month period.

The statutory requirement on the Scheme is to permit one guaranteed CETV in any 12-month period. The Scheme’s policy adopts this approach. The two main reasons for doing so are risk for the remaining members and administrative demands.

The Trustees have to balance the interests of all 16,000 members of the Scheme. Offering a guaranteed CETV means that the departing member is immune from movements in financial markets and that risk is passed to the Scheme (for the duration of the guarantee). This could affect the security available to protect the benefits of those who remain.

In addition, processing transfers is complex and there is a risk of delays in the processing of important transactions for other members such as deaths, retirements and pension increases. The Trustees have therefore decided that the policy gives transferring members their statutory right to leave the scheme but in a way which protects the interests of other members.

The Trustees do have discretion in individual cases to permit members to have more than one guaranteed CETV in a 12-month period. They will normally only do so in cases where the member’s circumstances have changed in an unforeseen way, for example if they are made redundant by Standard Life.

No, you can transfer your DB and DC benefits separately, if you want to.

Indeed, the Trustees have decided to make the process even more flexible – so you can now choose a ‘partial transfer’, and move your DB and/or DC benefits in stages, if you want to.

Common characteristics of this kind of fraud include:

- ‘Cold calling’ or contacting you out of the blue to discuss your pension and savings.
- Offering you investment returns which can't be bettered anywhere else.
- Offering you the chance to access your savings earlier than you could do in the Scheme, or more immediate tax-free cash than you could obtain from the Scheme. This is a breach of HMRC rules and could lead to significant tax charges.

If you are considering transferring your benefits out of the Scheme, you should follow these four simple steps recommended by the Financial Conduct Authority (FCA) and the Pensions Regulator to keep your pension safe:

Step 1 - Reject unexpected offers

If you’re contacted out of the blue about a pension opportunity, chances are it’s a scam. Pension cold calling is illegal, and you should be very wary. An offer of a free pension review from a firm you’ve not dealt with before is probably a scam.

Step 2 - Check who you’re dealing with

Search ScamSmart and check the FCA’s register to make sure anyone offering you advice is authorised. If they are, check they’re permitted to give pension advice by calling the FCA Consumer Helpline on 0800 111 6768.

If you don’t use an FCA-authorised firm, you risk not having access to compensation schemes.

Step 3 - Don’t be rushed or pressured

Take your time to make all the checks you need – even if this means turning down what seems to be an ‘amazing deal’.

Step 4 - Get impartial information or advice

You should seriously consider seeking financial advice before changing your pension arrangements. Where you are seeking to transfer more than £30,000 from the Scheme, you must obtain this advice.

Consider using MoneyHelper which provides free independent and impartial information and guidance.

The Trustees perform a high level of due diligence on every request to transfer out. However, scammers are increasingly sophisticated and hard to spot, and we cannot reject your statutory right to transfer if all legal requirements appear to be met. You must be sure of the intentions of the parties involved in your transfer before you proceed and follow the steps above to keep your pension safe.

If you suspect a pension scam, you should report it by calling Police Scotland by dialling 101. If you live elsewhere in the UK contact Action Fraud on 0300 123 2040 or use their online reporting tool at www.actionfraud.police.uk

The Scamsmart campaign aims to educate the public on the threat of fraud and offers a number of useful self-help resources.

Be ScamSmart with your pension. To find out more, visit www.fca.org.uk/scamsmart

Unbiased is the UKs largest selection of financial advisers. All advisers listed on this site are qualified and regulated by the FCA.

Website: www.unbiased.co.uk

The Money Advice Service is an independent service set up by the Government to provide a range of information about consumer finances, including obtaining independent financial advice.

The Money Advice Service also has a directory of financial advisers that specialise in providing advice about retirement. You can use this directory to search for advisers who are pension transfer specialists. You can also search by postcode.

Website: www.moneyadviceservice.org.uk

Phone: 0300 500 5000 (call rates may vary)

MoneyHelper

MoneyHelper is the public branding of the UK Government’s Money & Pensions Service (“MaPS”). It is a useful resource which offers guidance and tools to help with all aspects of financial planning including budgeting, debt management, workplace benefits and savings products including pensions. MoneyHelper can assist with general queries and also help you understand the flexible ways in which you can access benefits.

The MoneyHelper website is at https://www.moneyhelper.org.uk/en

For money advice call MoneyHelper free on 0800 138 7777 or +44 20 3553 2279 from overseas (charges apply)

For pensions advice call MoneyHelper free on 0800 011 3797 or +44 20 7932 5780 from overseas (charges apply).

Pension Wise

If you are over 50 you can arrange a free consultation with a MoneyHelper expert to help you understand your pension options. These experts provide an impartial one to one service called Pension Wise which can be contacted via the MoneyHelper website or by calling 0800 138 3944 (+44 20 3733 3495 from overseas).

The Pensions & Life Savings Association has launched a set of Retirement Living Standards, to help people picture and achieve the level of income and standard of living they want when they retire, and the associated cost. These Retirement Living Standards can be found at https://www.retirementlivingstandards.org.uk/.

Advising the Trustees