CIS PERSONAL PENSION
Reminder of important facts
This guide applies to all variations of The
CIS Personal Pension product (sold prior
to April 2001), including:
– Voluntary contributions
– State Earnings Related Pension
Scheme (SERPS)/State 2nd Pension
– Free-standing AVC contributions.
What is a Personal Pension Policy?
Your pension policy is a tax-efficient way of
building up a pension pot to provide you
with pension benefits in your retirement.
The options available to you are included in
the Taking your pension benefits section.
Do I get tax relief on my pension
To encourage people to save for their
retirement, the Government gives basic
rate income tax relief on your pension
Basic rate taxpayers
For basic rate taxpayers this means that if,
for example, you pay £80 a month into
your Personal Pension policy, we would
collect an additional payment of £20 from
the Government and pay this into your
policy. You would then have £100 a month
being invested in your policy.
Higher and additional rate taxpayers
Higher rate and additional rate taxpayers
also qualify for basic rate income tax relief.
If you are a higher rate or additional rate
taxpayer, and you pay the same £80 a
month into your Personal Pension policy,
we would collect the same additional
payment of £20 from the Government and
pay this into your policy. You may then be
able to claim further tax relief through
your Self Assessment tax return if you
complete one, or by asking H.M. Revenue
and Customs to adjust your PAYE (Pay
As You Earn) tax code if you don’t.
Where does Royal London invest my
We invest your contributions, together
with the contributions of other with-profit
policyholders, into the RLCIS OB & IB
Fund, referred to here as the with-profits
fund. The fund is managed by an
experienced fund manager and aims to
achieve steady growth by investing in a
wide range of assets such as shares,
property and government bonds.
The value of the investments in the
with-profits fund will go up and down,
reflecting daily price changes in the
underlying assets. However, we ‘smooth’
our investment returns to protect against
extreme changes in investment markets.
By smoothing we mean that instead of
sharing out the actual profits or losses
made in the with-profits fund each year,
we reduce the impact of variations in these
from one period to another by spreading
the profits and losses from one period to
We also aim to pass on a share of the
with-profits fund’s investment returns to
you. We do this by adding annual and final
bonuses to your policy. However, please
note that the addition of bonuses depends
on the fund’s performance and there is no
guarantee that we will add future bonuses
to your policy. The bonuses also allow for
deductions to cover the costs of managing
We explain how we manage our
with-profits fund in the Principles and
Practices of Financial Management
(PPFM) of the RLCIS OB & IB Fund
document available on our website
royallondongroup.co.uk/RLCIS or on
request. In the event of conflict between
this guide and the PPFM, the PPFM shall
What are the Fund Guarantees?
Your policy will provide you with a
Guaranteed Cash Sum (GCS) at your
Chosen Retirement Date* as long as you
pay all your contributions up to that date.
Your GCS and any bonuses, once added,
are guaranteed to be paid on your Chosen
Retirement Date, even if the investment
markets fall. This provides the pension pot
from which you can take your pension
benefits at retirement.
What is a Guaranteed Annuity Rate?
For any pension contributions in respect
of proposal forms signed before 1st March
1999, we guarantee a certain level of
regular income for you if you retire at your
Chosen Retirement Date and you use your
pension benefits to buy a regular income
with us. This is known as a Guaranteed
Our Guaranteed Annuity Rates could be
higher than the annuity rates offered by
other pension providers, meaning that you
could get a higher regular income by
staying with us.
The policy document we sent to you when
you took out your Personal Pension policy
will tell you if you are entitled to a
Guaranteed Annuity Rate.
When can I take my pension benefits?
Pension benefits can be taken from age 55.
We will write to you in the months
leading up to your Chosen Retirement
Date to inform you of your retirement
options, unless you contact us to request
an earlier retirement date.
Taking your pension benefits
The Government has made a number of
changes to the way in which you can take
your pension benefits. This means that you
now have more choice than ever before in
how you can take the pension pot you
have saved. In summary, these choices are:
Option 1 – Take all your pension pot as a
single lump sum (25% is tax free).
Option 2 – Convert your pension pot into
a guaranteed income for the rest of your
life. This is called an annuity (including
the option to take up to 25% as tax free
Option 3 – Take some of your pension pot
and leave the rest invested for another
time. You can take a series of lump sum
payments or income at different times or a
mix of both (including the option to take
up to 25% as tax free cash).
Option 4 – Postpone taking your pension
pot – you can leave your pension benefits
with us until you are age 75, after which
you will be required to take your pension
You cannot normally take advantage of
these options until you have reached age
55. However, if you are unable to work
because of poor health then you may be
able to take your benefits earlier.
As you approach your Chosen Retirement
Date, we will send you a detailed pack
with all your options and details of what
you need to do.
To help you understand your options and
make the right choices, the Government is
making available a free and impartial
guidance service - Pension Wise. We
strongly recommend that you use this
service to help you understand your
options and make the right decision. You
can access Pension Wise online by visiting
This service will not provide advice or
recommend specific products or providers.
If you feel you need advice, we recommend
you talk to a financial adviser. If you do
not have a financial adviser, you can get
details of local financial advisers by visiting
unbiased.co.uk. Advisers may charge for
providing such advice and should confirm
any cost to you beforehand.
What happens if I die before I take
my pension benefits?
If you die before you take your pension
benefits, we will return the value of your
pension pot to your beneficiaries.
If you die before the age of 75, it will
normally be paid tax free. If you die after
the age of 75, it will be subject to tax at
45% if it is paid before 6 April 2016.
After this date it will be taxed as income,
i.e. depending on their total taxable income
in a year, your beneficiary may pay income
tax on these payments.
If you purchased separate life cover with
your pension, and this cover is in force
when you die, then we will pay an
additional lump sum benefit.
Previously, there were certain restrictions
applying to Protected Rights benefits,
which meant that a regular income would
automatically have been payable to a
surviving spouse or civil partner, but this is
no longer the case.
You will still be able to choose to have a
regular income payable to a surviving
spouse, civil partner or any other person
who is financially dependent on you,
however if one is not chosen the pension
pot will be paid as a lump sum.
What happens if I am in ill-health?
If you took out the Waiver of
Contribution cover option with your
policy, and are still paying for this cover,
please contact us if you are unable to work
for any significant period due to sickness
or accident. We may be able to pay your
pension contributions for you.
If you are unsure whether you have waiver
of contribution cover please contact us on
0345 605 7777.
If you retire early due to ill health, we may
be able to make special arrangements for
when and how you take your pension
Can I transfer my policy?
You can transfer your policy to another
pension provider at any time before you
take your pension benefits. We will not
charge for doing this
However, if you do transfer your policy,
you will lose any Fund Guarantees and
any Guaranteed Annuity Rate.
We recommend that you speak to a
financial adviser before you transfer your
Can I stop paying my pension
You can stop paying your pension
contributions at any time but this will
reduce the size of your pension pot.
This guide is a short reminder of the main
features of your Personal Pension policy
and any important changes that might
affect your policy. You should refer to the
policy document we sent to you when you
took out your policy, together with any
contract endorsements, for more detailed
information. In the event of conflict
between this guide and the policy
document, the policy document will
*Throughout this document, whenever we
refer to ‘Chosen Retirement Date’, this is
the date that you originally stated you
would like to retire and is the date shown
on your annual statement (unless
If you would like a copy of this leaflet in large print,
audio or Braille, please call us on 0345 605 7777.
Churchgate House, 56 Oxford Street, Manchester, M1 6EU
The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority
and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in
England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.