15th February 2008

Introducing Income Release from Scottish Life

Income Release allows your clients to access their pension benefits at a time and in a way that suits them. They can decide exactly how much they want to take out, either as a lump sum or as an income, allowing them to retain control of their pension and removing the need to transfer to a separate drawdown contract.

Income Release will be available to clients aged 50 or above (55 from 6 April 2010) with at least £20,000 in their Pension Portfolio, excluding any self invested assets. As it's an integrated feature of the Pension Portfolio, the existing charging structure¹ and wide selection of investment options have been retained. This means your clients can benefit from an AMC of just 0.7% a year, which is reduced to as low as 0.45% for larger funds.

• Pension Commencement Lump Sum (PCLS) and income from Protected Rights
• PCLS and income paid within 5 working days
• Plan documents issued within 2 working days of completion of plan
• Up to 7.5% up-front commission plus 1% FBRC based on total fund
• Commission available on future designations
• PCLS, income and commission paid on completion of each transfer payment
• Innovative income management facility, called Income Tap

The income drawdown market is currently worth approximately £2.7 billion a year² and with the 'baby-boomer' generation now starting to reach retirement this is only going to get bigger. Combined with the post A-Day legislation allowing tax-free lump sums to be taken without a corresponding income, this could be the growth pension market for the next 5 to 10 years.

There are clearly significant business opportunities to be had in this potentially huge market and Income Release helps you to realise them.

1. A £100 charge applies if the value of the plan is less than £40,000 (excluding self investments) when the Income Release facility is first used. Additional charges may apply on subsequent designations

2. Source: Association of British Insurers, November 2007.