Understanding your GDST Flexible Pension Plan webcast

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Hello and welcome to this webcast recording provided by Aviva who provide your pension. You may pause or rewind this recording at any time.

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Before we go any further there is some important information that we need to share with you.

The following presentation should not be regarded as giving any form of financial or investment advice. You shouldn't make decisions on the basis of this presentation alone. If you require advice, you should contact a financial adviser. You can find one using the website shown on the screen.

This presentation is based on Aviva’s interpretation of present laws and HM Revenue & Customs practice for the current tax year. The tax benefits may change at any time and their value depends on your personal circumstances. The value of an investment can fall as well as rise and it is not guaranteed. You may get back less than the amount that’s been invested.

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So, what are we going to be covering today and how can we help you. Please pause and take a moment to read the information on the screen before moving on.

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As people are living longer it is more important than ever to save for retirement.

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The new full state pension for the current tax year is shown on the screen. If you're entitled to a state pension, when will you get it? The current State Pension age has increased to 66 and the government is planning to increase this further in the future.

You’ll usually need to have 10 qualifying years on your National Insurance record to get any new State Pension. You’ll need 35 qualifying years to get the full amount. You may get less if you were contracted out before 6 April 2016.  Pension credit gives you extra money to help with your living costs if you're over State Pension Age and on a low income. Would you or someone you know qualify for Pension Credit? If you would like more information about your state pension age, would like to get a forecast of what you might get, or details about 'contracting out', or Pension Credit, you can go to the Government website www.gov.uk.

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The state pension might be a great foundation, but it may not be enough income to support you fully in retirement. For most people, relying solely on the state pension would represent a significant drop in income, as you can see on the screen.

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A great way to save could be through your company pension scheme. This is because it's tax-efficient; your employer pays in, too; it's your pension savings - so if you leave your employer, you can take them with you, And It’s flexible, meaning you can decide how much you would like to contribute, where the contributions are invested, and at what age you would like to take the benefits. You can access your savings from the 'minimum pension age' set by the government. This is currently 55 but is rising to 57 from 6 April 2028. You may be able to access it earlier such as when you have a protected pension age or can't work due to ill health or incapacity.

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Your pension contributions will be sent to Aviva and invested in either the default investment solution or your chosen investment funds. Charges will be deducted whilst your money is invested. When you get to retirement you can then use the fund to provide yourself with an income, with various options available from the minimum pension age.

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Please pause for a moment to read the information about the scheme's contribution rates before moving on.

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Your plan has a 'normal retirement age', which is shown on the screen, but that doesn't mean you have to take your pension at that age. You can normally access your pension savings from the minimum pension age.

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Your pension scheme offers a range of investments, and you can choose where your money goes. Let's look at how investments work, and what investments are available in your scheme.

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All types of investments work on a risk and reward basis. Generally speaking, the riskier an investment is, the greater its potential for providing higher returns. The downside is that the value is likely to go up and down more, so there is a greater chance of losing money especially over the short term. With lower risk investments there’s less chance of you losing money, but the returns they’re capable of achieving generally tend to be lower and could possibly struggle to keep up with inflation. Towards the bottom of the risk and reward scale you would typically have Money Market investments, also known as Cash. They are not to be confused with deposit accounts with bank or building societies. Although less risky than other types of investments, there could be circumstances when these investments fall in value, for example if an organisation fails. The value of Money Market investments could also be eroded over time due to the effects of fund charges, product charges and inflation. At the other end of the scale, you have Company Shares, also known as Equities. While there is more opportunity for potential gains with shares than with other investment types, there is also greater risk that they will fall in value. Generally, each fund offered by Aviva invests in one or more of the investment types shown. There is more information about these investment types in your investment booklet.

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It’s important to remain focused on the long term. The chart on the screen shows the performance of the FTSE 100 Index - which is made up of the share prices of UK's largest 100 companies - over the past 30 years. Whilst there will be ups and downs with investment performance, it is important to focus on the bigger picture - your long-term goals.

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There are 3 different ways that you can choose from when investing your pension savings: Hands-off, helping hand or Hands-on. Please pause for a moment to read the information on the screen before moving on.

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When you are first enrolled your contributions will be invested in the default investment solution which is shown on the screen. The default automatically manages your investments in the run-up to retirement and has been designed for the majority of members, however this may not suit your personal circumstances and retirement aims. More information on the funds used in the default, including their risks and charges, can be found in your investment booklet. 

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Here we see which funds are used in the default investment programme and how the proportion of each fund changes in the run up to your retirement. For those people who have more than 15 years to go to their chosen retirement age, the My Future investment programme invests in a medium risk fund called the Aviva pension My Future Growth fund, which is a mix of different investment types and aims to grow your pension fund although as with any investments, it can't guarantee to do so. At 15 years to your chosen retirement date, your money gradually moves into a low to medium risk fund, called the Aviva Pension My Future Consolidation Fund, which aims to help minimise fluctuations in the value of your pension pot and reduce your exposure to investment risk as you approach your retirement date.

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Some funds will take into consideration Environmental, Social and Governance factors before investing in a company. These are non-financial aspects of their performance, here are some examples. Please pause for a moment to read the information on the screen before moving on.

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Please pause for a moment to read the information on the screen before moving on.

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All of the funds that are available to you will have their own charge associated with them. The charge for the default investment solution - where savings are automatically invested unless you make your own choice - is shown on the screen. You'll also see the charge of the lowest-charged fund. These charges cover costs such as setting up the plan, fund management and plan administration. We've also shown you where you can find further information on charges. If you choose your own investment funds, please make sure you are aware of the charges associated with them.

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As long as you’ve reached the minimum pension age, there are now several ways in which you can access your pension savings.

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You are able to take all or some of your fund as cash. The first 25% of any cash withdrawal would be tax free, the rest would be taxed as income, like salary. Alternatively, you can take up to 25% of your fund as a tax free payment and then either re-invest the rest into funds designed to provide you with a taxable income, known as flexi-access drawdown or purchase a lifetime annuity with the remainder, which can provide you with a regular taxable income for the rest of your life. You can also choose a combination of these options.

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Please pause for a moment to read the information on the screen before moving on.

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Please pause for a moment to read the information on the screen before moving on.

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As you get closer to retirement it is important to review your benefits and there are several things that can help you: Pension Wise from MoneyHelper is a free, government-backed service, offering clear, impartial and specialist guidance on your retirement options. If you're aged 50 or over, this service is available to you. Visit moneyhelper.org.uk/pensionwise or call 0800 138 3944 for full details of the service. We strongly recommend that you seek financial advice if you are unsure which options may be right for you. There may be a charge for this advice. Please read the screen to see how you can find a financial adviser

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If you are over 50, thinking seriously about retirement and looking to understand if you’re on track for the retirement you want, Aviva offers a free 20 minute retirement preparation review. If you’d like to speak to us, you can request a call back using the details shown on the screen

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As a member you will have access to MyWorkplace, making it easier for you to plan and save for your future. In addition to giving you information about your pensions value and where your money is invested you will also have access to our tools and calculators.

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Let’s have a look at some frequently asked questions 

What happens if you leave your employer? Your employer contributions will stop and you may not have access to the whole of the previous fund range. Please note that charges will continue to be deducted. Depending on the type of pension you have you may be able to continue paying into your pension through your own bank account. You can stop making contributions to your plan and your money will remain invested. With some types of pensions you have to stop making contributions. You can transfer into another registered pension scheme. You can take your benefits if over the minimum pension age. When you leave your employer you will be sent a leaver’s pack explaining your options. 

What happens when you die? You can complete the nomination form to let us know who you would like your pension fund to go to if you die before taking your retirement benefits. Its normally free of inheritance tax, and can be taken as a lump sum or used to provide an income. After you retire, the benefits that may be left to your beneficiaries will depend on how you took your pension benefits.

Can you transfer money in? Yes, you can transfer and if you have several pension plans, transferring some or all of them into one pot could make financial sense. Each potential transfer needs to be considered on its own merits. And there are pros and cons to consider, if you are unsure if a pension transfer is right for you, you should consider seeking financial advice.

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There are various next steps for you to consider. Please pause and take a moment to read the information on the screen before moving on.

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Thank you for listening we hope this presentation has been useful.