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United Kingdom Atomic Energy Authority Pensions Schemes and Stakeholder Pensions

What are Stakeholder pensions?

Stakeholder pensions are low cost private pensions, which became available from 6 April 2001. Stakeholder pensions are personal pensions which meet certain standards such as having charges capped.

Can I contribute to Stakeholder and the United Kingdom Atomic Energy Authority pension scheme?

Yes, provided you earn no more than £30,000 a year, members of the United Kingdom Atomic Energy Authority pension scheme may also take out a Stakeholder pension scheme to increase their overall level of pension provision.

But I thought that AVCs and Freestanding AVCs did that?

Yes. You may continue (or start) to pay additional voluntary contributions (AVCs) to the Group AVC Scheme with Prudential, or to Free-standing AVCs (FSAVCs) which are not arranged through your employer's occupational pension scheme, but there is also the option of a Stakeholder pension. You have the option to make contributions to both an AVC arrangement and a Stakeholder pension, or to pay only to one arrangement and not the other.

I want to start topping up my pension so what options do I have?

The following options may be available to you:-

  • Added years in the United Kingdom Atomic Energy Authority pension scheme
  • United Kingdom Atomic Energy Authority Group AVC arrangement
  • Free-Standing AVC arrangement
  • Stakeholder/personal pensions

The following table provides some features of some of the options available to you:-

 United Kingdom Atomic Energy Authority Group AVC SchemeFSAVCs Stakeholder Pension
Charges There are no administration charges on contributions received May be more expensive than group AVC scheme. May be more than 1.5%. Normally up to 1.5%
Contributions Any amount, subject to the Annual Allowance which is £40,000 in 2016/17.  Any amount, subject to the Annual Allowance which is £40,000 in 2016/17. Up to £3,600 per year
Investment choice Various funds with the Prudential Wide investment Choice Any fund offered by any Stakeholder
Investment Performance Various funds with the Prudential Wide investment Choice Any fund offered by any Stakeholder
Ability to Transfer Benefits Only if United Kingdom Atomic Energy Authority final salary pension scheme is transferred Yes - but there may be an exit charge Yes - no exit charges
Maximum benefits payable Subject of HM Revenue and Customs limits Subject to HM Revenue and Customs limits None. Benefits are always on top of your United Kingdom Atomic Energy Authority final salary pension scheme and Group AVC scheme benefits
Tax free lump sum benefit on retirement No. Pension is provided through the purchase of an annuity No. Pension is provided through purchase of an annuity 25% per cent of accumulated fund can be taken tax-free

There may be limits on the level of contributions which you can pay.

You will of course need to ensure that you choose the correct investment vehicle to suit your personal circumstances, and therefore we urge you to seek independent financial advice.

Will Stakeholder contributions be deducted from my salary?

Unless your employer has made specific arrangements you will have to make your own arrangements with a provider. It is advisable to consult an independent financial adviser before investing money in Stakeholder pensions, or any other pension arrangement, to ensure that you have selected the best investment vehicle to suit your personal circumstances.

Can I have a Stakeholder pension and pay AVCs at the same time?

You have the option of making contributions to both a Stakeholder pension and an AVC arrangement or to pay only to one arrangement and not the other. Only if you earn no more than £30,000 a year can you simultaneously contribute to a stakeholder/personal pensions whilst belonging to the United Kingdom Atomic Energy Authority pension scheme.

Do Stakeholder contributions affect AVC limits?

No. Any contributions you make to a Stakeholder pension would not affect the headroom available to you under AVCs. [Thus you could pay the maximum contribution to a Stakeholder pension, plus total contributions to the main United Kingdom Atomic Energy Authority scheme and to AVCs up to 15% of pay (subject to benefit headroom)].

I am buying added years, is there a problem?

No. You can continue to contribute for added years, as well as making contributions to a Stakeholder pension, if you wish. Contributions for added years come within the 15% limit applicable to the United Kingdom Atomic Energy Authority pension scheme.

Can I transfer my existing AVC fund to a Stakeholder scheme?

If you are a current member of the United Kingdom Atomic Energy Authority pension scheme you cannot transfer your AVC fund to a Stakeholder scheme unless you also transfer your main United Kingdom Atomic Energy Authority pension scheme benefits to the Stakeholder scheme. If you transfer your United Kingdom Atomic Energy Authority final salary scheme pension benefits you must transfer your AVCs to the same arrangement. You should seek financial advice before taking any action to transfer your United Kingdom Atomic Energy Authority pension scheme benefits into a stakeholder pension.

Can I be given financial advice on the options for topping up benefits from the United Kingdom Atomic Energy Authority pension scheme?

The administrators of the United Kingdom Atomic Energy Authority pension scheme are not allowed to give financial advice to individuals.

If you wish to receive independent advice, you should talk to an independent financial adviser.

Where can I find out more?
Group AVC Scheme

If you would like further information about the United Kingdom Atomic Energy Authority Group AVC Scheme you can access the Prudential’s AVC Scheme Education and Information website, www.prudential-pensions.com. In order to enter Prudential's website you will need to enter the following:-

Username: Ukaeas
Password: Ukaeas1

Please note that the first letter 'U' should be entered in uppercase and the remainder in lowercase letters.

Added Years

If you would like information regarding purchasing added years in the United Kingdom Atomic Energy Authority pension scheme, you should contact your Employee Representative, or from the pensions administrators. Click here to access Added Years leaflet.

Publications

There is a Department of Social Security booklet called 'Stakeholder Pensions - Your Guide (PM8)' available by telephoning 0845 7313233, or it is available on-line www.pensionguide.gov.uk

The tax rules on Stakeholder pensions are explained in the HM Revenue and Customs booklet IR78 available from any Tax Office or HM Revenue and Customs Enquiry Centre or on-line www.inlandrevenue.gov.uk/stakepension

The Register of Stakeholder pension schemes is published on the Pensions Regulator's website www.pensionsregulator.gov.uk or you can telephone to obtain the information on 0870 606 3636.

You can obtain information on a wide range of financial topics, including how to go about finding a financial adviser, from the Financial Services Authority (FSA). You can call the FSA Consumer Helpline on 0845 6061234 or visit the FSA Consumer Help website www.fsa.gov.uk/consumer.