Prudential Retirement Account

An introduction

The Prudential Retirement Account has been designed to meet your needs as you plan for later life. How we approach retirement has changed, for many people it's no longer an event but a change in how we work and live.

That change needs increased flexibility in how you save and how you access your money. The Prudential Retirement Account helps give you that.

For further information, please speak to your financial adviser or refer to the Key Features Document.

If you dont have an adviser, you can find one at pru.co.uk/find-an-adviser or you can search for an independent financial adviser at unbiased.co.uk

How it works

The Prudential Retirement Account contains two core elements:

Paying money in

The Prudential Retirement Account gives you the flexibility to make regular or one off payments into your pension savings account. Contributions from your employer or anyone else can also be paid into the account.

You can transfer pensions from other providers into the Retirement Account. Allowing you to consolidate pensions held elsewhere.

If you have pension products that you're already receiving income from, you can transfer those directly to the Pension Income Account.

Taking money from your pension

When the time comes to access your pension pot the Prudential Retirement Account gives you the freedom to choose how you take your money.

You can take a single lump sum or series of small lump sums from the Pension Savings Account without the need to transfer into a drawdown product. The first 25% of your lump sum, whether a single lump sum or a series of smaller ones, is usually tax free, the remainder is taxed along with any other income you might have.

If you want a flexible regular income you can move your pension pot to the Pension Income Account. Here you can set a regular income and keep the option to take lump sums as and when you need.

You can usually take up to 25% as a tax-free lump sum, but you need to do this at the start. The remainder is taxed along with any other income you might have.

Investing your money

While saving for your retirement, your contributions will be held in one part of the Retirement Account which we call the Pension Savings Account.

You can also transfer money from other pensions, including funds already in drawdown. You must consider whether this is the right decision for you, and be aware of the risks associated with this product. Some of the risks are:

There may be a penalty to move from your existing scheme.
You may have valuable guarantees on your policy that you might lose if you transfer.
The value of your investment can go down as well as up so you might get back less than you put in.

For more information, please read the Key Features Document. There may be options available with your existing plan that might equally meet your needs so you should speak to a financial adviser before you make a decision.

Making contributions into your Pension Savings Account is easy and flexible:

You can choose to make regular monthly or annual contributions.
Your employer or anyone else can pay contributions into the account.
You can opt for your regular payments to automatically increase each year.
You have the freedom to - stop, start, increase or decrease your contributions to suit your needs.
Choose which funds to invest your money in and change them over time as your needs change.

Benefit from tax relief on your contributions

If you're eligible, your contributions will automatically benefit from basic tax relief when you pay into the Prudential Retirement Account. And you may be able to claim back even more if you pay above the basic rate of tax.

Over time, this tax relief could contribute significantly to the value of your pension savings.

For more information about government tax relief please speak to a financial adviser or visit HM Revenue & Customs (HMRC).

Cash account

Contributions into your Pension Savings Account go into a 'cash account' before being invested.

If we receive interest on the amount in your cash account, we will normally add the interest paid by the bank to your cash account monthly in arrears. The interest rate on the Cash Account is 0.07% below the prevailing Bank of England base rate.

Taking money out

From age 55 (57 from 6 April 2028, unless you have a protected pension age), you can start to take benefits from your pension pot.

You have the flexibility to take as much or as little of your money as you choose. This can help you manage the tax you pay and potentially keep you in a lower tax band.

And if you decide to stop taking an income you can re-start it again in the future if your needs change.

You might be able to take your benefits earlier than age 55 if you're in ill health.

Regardless of your age, if you have a life expectancy of less than one year due to ill health, you may be able to take your pension pot tax-free.

For more information, please contact us.

Flexible ways to withdraw your money

You have the option to move some or all of your money into the Pension Income Account (drawdown). This allows you to take a flexible regular income.

You also have the option to withdraw your money directly from your Pension Savings Account as a single cash lump sum, or a series of smaller lump sums. This is sometimes referred to as Uncrystalised Funds Pension Lump Sums (UFPLS).

Tax considerations and benefits

If you decide to move your pension pot into the Pension Income Account, you can usually take up to 25% of your pension pot as a tax-free cash lump sum. But you need to do this at the start.

If you choose to take your pension benefits directly from the Pension Savings Account the first 25% of the pension pot will usually be tax-free, the rest will be taxed along with any other income you may have.

Or if you opt not to take the whole tax-free lump sum at the start, you can take smaller cash lump sums while the remainder stays invested. With each withdrawal, the first 25% will normally be tax-free and the rest may be subject to Income Tax.

Either way, any money you take above the tax-free amount will be added to your income for the year and taxed at the appropriate rate.

For example:

Take it as: Flexible income (drawdown)

Pension pot size at age 60:	£50,000
Take 25% tax-free cash as a lump sum:	£12,500
Leave the rest invested in drawdown:	£37,500
If left untouched until age 65, your drawdown pot could be worth around:	£43,560
If left untouched until age 70, your drawdown pot could be worth around:	£50,600

OR, if you want to take an income from age 60:
Take 25% tax-free cash at the start:	£12,500
And then take the same amount each year:	£2,400
So your pot could last for:	21 years & 1 month

Take it as cash: In stages from the Pension Savings Account

Pension pot size at age 60:	£50,000
To provide an annual cash lump sum of:	£2,400
Amount of each cash lump sum that is tax-free:	£600
Amount of each cash lump sum that is subject to tax:	£1,800
So your pension pot could last for:	32 years & 7 months

TOV is based on a 20% tax-rate and a Personal Allowance of £12,570 for 2024/2025. No other income is taken into consideration. When added to other income for the year, the amount of tax to pay could be at a higher rate.

The investment growth on the amount left invested when taking it in stages is calculated at 3% per year and this is not guaranteed. It does not include charges which may apply.

This is not an indication of what you may get in the future and is not guaranteed.

The actual amount you receive and the amount of tax you may need to pay will depend on the option you choose and your individual circumstances.

Choosing your investment funds

Choosing where to invest your money is an important decision. The Prudential Retirement Account gives you the freedom and choice to select the investment fund that matches your needs.

There is a link between the amount of risk an investor is prepared to take, and the potential rewards they seek to gain.

The key to successful investing is to find the correct balance between potential reward and the level of investment risk you are comfortable with.

Although money may be more secure in a lower-risk investment, it is also unlikely to grow significantly. Whereas investing in a higher-risk investment, means the potential rewards may be greater but so is the potential for loss.

What funds can I invest in?

We offer access to our own PruFund range of Funds and hundreds of collective funds from a wide variety of fund management groups to suit your investment style and appetite for risk.

A financial adviser can explain the fund options to you and what to consider.

It’s also important that you regularly review your investments so that you get the best out of your plan.

If you want more information on what investment funds and PruFund funds are available, you can download our factsheets or read the PruFund Fund Guide.

Important documents

Important information

The Prudential Retirement Account is only available from your financial adviser.
There is a limit to the amount you can contribute to your pension and still receive tax relief. Apply for a Transitional Tax-Free Amount Certificate.
Taking a single lump sum or income could impact the tax bracket you are in, meaning you might pay more tax than you expected.
If you take out too much money, you may run out and need to rely on other income.
You will still have to pay charges on the money left invested.
If you have a defined contribution scheme (where you and/or your employer make regular contributions), taking money out of your pension pot sometimes triggers a limit on how much can be paid into it in the future. This is called the Money Purchase Annual Allowance.
Transfers and contributions from your employer do not qualify for tax relief.
For single contributions and transfers, we will process your investment instruction within 3 business days of the date we have received the money and all the documentation we require.
For regular contributions, we will process your investment instruction within 6 business days of receiving the direct debit instruction and all other required documentation (to allow time for funds to clear through the banking system).
The rate at which regular contributions increase will be in line with the consumer price index or a fixed rate of your choice.
Adviser and non-PruFund product charges are paid from the cash account.
Charges for managing the plan will continue to be taken if you stop making payments in.
From time to time, changes can occur on funds you invest in – for example, fund mergers or changes in objectives. These are called "fund events".
If there are any changes to funds we will contact you.

Supporting information

From age 50 we recommend you speak to PensionWise a government service from MoneyHelper that offers free, impartial guidance to help you understand your retirement options. You can speak to them on 0800 280 8880, and book an appointment to meet someone in person. And, you can visit pensionwise.gov.uk/shop-around. You can also speak to a financial adviser.

Considerations when choosing the Prudential Retirement Account

It's important that you remember that your money is invested. The value of your investment can go down as well as up so you might not get back the amount you put in. It's also important to remember that the deductions for the costs and charges involved will have an impact on the amount you have invested.

You might need to pay tax depending on your circumstances and the options you choose. Tax rules can also change in the future.

When deciding what to do with your pension pot you should be aware that different providers offer different products that may be more suited to your individual circumstances. Each product option could also have different tax implications. Their rates, investment funds, charges and terms may also be different. This is why it's important to shop around - so whatever you decide to do, it's the right decision for you.

Prudential Retirement Account

Choice and flexibility in one place

Save in a tax-efficient way

Flexible ways to take your money

A range of investment options to pick from

Check in on your pension online

Learn more