Plan options on our Protected Retirement Plan

Read the options you have for our Protected Retirement Plan that you should consider before making your decision.

Choice of income and term

At the start of the plan, if you choose capped drawdown, you can choose how much income to take between taking nothing and the maximum allowed under the Government Actuary's Department (GAD) rules. GAD drawdown tables are used to calculate how much income you can withdraw. If you choose flexible drawdown the maximum income limit doesn't apply.

The Protected Retirement Plan allows you to choose a term between 3 and 25 years.

Guaranteed maturity value

As long as you’re alive at the end of the chosen term, a guaranteed maturity value will be available. It’s protected and isn’t at risk to changes in investment conditions over the term of the plan.

The guaranteed maturity value is fixed at the start of the plan and is determined by:

the size of the pension fund invested
the term you choose
your age
the income chosen and payment frequency
any death benefits chosen
the investment markets when you purchase the plan

If you choose capped drawdown this lump sum payment can be used to buy a lifetime annuity, another Protected Retirement Plan or can be transferred to a drawdown pension arrangement to best fit your personal circumstances and income requirements. If you choose flexible drawdown you have the option to take the lump sum payment as a final income payment instead, subject to income tax.

Please note that if you choose capped drawdown the Guaranteed Maturity Value must be kept within a pension arrangement or used to buy an annuity, and can't be paid directly to you.

Changes in circumstances

If during the term of the plan your circumstances change, you may be able to transfer to another pension or annuity product with LV= or any other registered pension scheme. The qualifying changes in circumstances are:

becoming eligible for an enhanced annuity (you or your spouse/civil partner or financial dependant)
divorce/dissolution of civil partnership
marriage/civil partnership
being granted early retirement by your pension scheme due to ill health
qualifying for flexible drawdown
death of spouse/civil partner or financial dependant

In order to qualify we would need to see evidence of the change in your circumstances within 12 months of the event.

You can transfer within 12 months of a change in circumstances. We'll calculate a transfer value based on current investment conditions and the remaining plan term. It'll be based on your Guaranteed Maturity Value plus remaining income payments to the end of the term less our costs to end the plan.

If you qualify for flexible drawdown, you may take this transfer value as a lump sum payment. This will be taxed as income. Your transfer value may be significantly less than your Guaranteed Maturity Value if you transfer out in the early years, or if investment conditions have worsened since the plan started.

The circumstances listed above are the only ones in which you can change or end your plan. The Protected Retirement Plan cannot be cashed in at any time.

Death benefits

At the start of the plan, you can choose the level of benefits that we'll pay if you die before the end of the term.

The death benefits that are available are:

Dependant's income

If you die during the term of the plan you can choose to provide your spouse, civil partner or financial dependant with an income. We’ll pay your surviving dependant an income equal to the chosen percentage of your income until either the end of the plan or until they die – whichever happens first. If your dependant survives until the end of the term, we’ll also pay out the chosen percentage of the maturity value.

Guarantee Period

This allows you to protect your income for a set period of time. If you die within the guaranteed period, the remaining income less tax (currently 55%) will be paid as a lump sum.
If your plan also includes a dependant’s income benefit and, if your dependant is still alive when you die, your income will continue to be paid at the full amount until the end of the guaranteed period. If your dependant is still alive at the end of the guaranteed period, the dependant’s income will be paid.
If your dependant dies within the guaranteed period, the remaining income less tax (currently 55%) will be paid as a lump sum.
This option isn't available if you've chosen Value Protection. You can't choose to include both a Guarantee Period and Value Protection.

Value Protection

Value Protection allows you to protect up to 100% of your original investment if you die within the plan term.
The lump sum payable will be the initial amount used to purchase the Protected Retirement Plan (or you can choose to protect a proportion of this amount), less the total amount of income paid. Any lump sum payable will be subject to a 55% tax charge.
This option isn't available if you've already chosen a guarantee period. You can't choose to include both a Guarantee Period and Value Protection