Financial products explained

Trustee Investment Plan

01/07/2018

What is it?

Trustee Investment Plans are designed especially for Trustees of Occupational Pension Schemes such as Small Self Administered Schemes, or Trustees of Self Invested Personal Pension Plans. They allow Trustees to gain access to world investment markets without having to appoint a Stockbroker or move the pension scheme to a different provider. In addition, they are an open-ended investment, which means that the money can be accessed by the Trustees at any time, depending on the plan chosen (of course, monies can only be paid to scheme members in accordance with the rules governing registered pension schemes).

Trustees have the choice of investing in a number of funds including all of the world's major Stock markets and a number of specialist funds including technology, ethical and environmental funds. One of the main advantages to Trustees is that switching between funds can be done free of charge and as the bond is a non-income producing asset it is very easy to administer within the scheme.

Eligibility

Trustees of pension schemes registered with HMRC are eligible to invest a lump sum from the existing approved pension scheme into the Trustee Investment Plan.

Contribution Limits

Typically they are provided by major insurance companies often with a minimum investment limit in the region of £50,000.

Taxation

Tax relief will have already been given on payments into the pension scheme so no further tax relief is given for contributions made into a Trustee Investment Plan.

The pension fund will grow free of UK income and capital gains tax.

All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change.

Withdrawals

Withdrawals can be made at any time and paid directly to the Trustee bank account.

Risk Considerations

There are a number of risk considerations that need to be taken into account. It is important that you are aware of these.

  • Past performance is no guarantee of future returns.
  • There is no guarantee that the performance will achieve the growth rate required.
  • If growth is low, charges may eat into the capital invested.
  • This investment is intended as a long-term investment and under current HM Revenue & Customs’ practice it is not normally possible to access the fund(s) prior to the age of 55. The minimum age is expected to increase to 57 from 2028 with further increases as State Pension Age goes up.
  • The illustration uses certain assumed rates of growth, as prescribed by the Financial Conduct Authority.  Investment returns may be less than those shown in the illustration and these rates are not guaranteed.
  • Please be aware that there may be occasions when an individual fund or funds may have a higher risk rating than your overall stated attitude to risk. If this is the case, then the overall risk rating applied to all of the combined funds being recommended is still designed to meet your stated tolerance.

The above product information is for general information only and should not be construed as advice. Please contact us for further information.

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