Matching your investments to your retirement choice

The Tesco Lifestyle Cash Option targets a cash outcome but if you'd prefer to take your savings a bit at a time (drawdown) or as regular guaranteed income, you can change your investments by calling us on 01624 693 900 or by writing to us at:

Baker Tilly Isle of Man
PO Box 95
2a Lord Street
Douglas
Isle of Man
IM99 1HP

If so, you need to tell us, ideally five years before your target retirement age. Your savings will then be invested in a way more suited to your preferred option.
If you've previously changed your investment choice, you can change it back.
Please download the Investment Guide for more information.

How you can take your savings

1.

All as cash

You can take your savings as cash in one go if your savings are below the limit specified by the Government.

If you've already received 30% of your savings tax free, the rest of your cash will be subject to Income Tax.
 
What do I do if I want to take my savings in this way?
If your money is invested in the Tesco Lifestyle Cash Option and you plan to take your retirement savings as cash, you don't have to do anything.

The Tesco Lifestyle Cash Option automatically assumes you'll take your money as cash and will invest your money with this in mind.   

2.

A bit at a time (drawdown)

You might decide you want to take your savings a bit at a time on a regular basis throughout your retirement.

Your savings will remain invested as you do this, until all of your savings have gone.

You'll have to pay Income Tax on what you take, after you've received your 30%
tax-free cash, if your overall annual income is above your Income Tax threshold.

What do I do if I want to take my savings in this way?
If you plan to take your retirement savings a bit at a time, we can invest your savings with this in mind in the Tesco Lifestyle Drawdown Option.

In the five years before your selected retirement age, the Tesco Lifestyle Drawdown Option will adjust to leave more of your savings invested in funds that are more likely to give you a return after you retire.

If you prefer this option, just let us know, ideally five years or more before your selected retirement age.

3.

Regular guaranteed income (pension)

You can choose to convert your retirement savings into a regular income that you'll receive for the rest of your life.

To do this you'll need to talk to an insurance company to buy an annuity.

At retirement, we'll help you by providing details of how to 'shop around' to find the insurance company who will give you the best rates.

After you've received your 30% tax free cash, the regular money you receive from your annuity payments count as income so you'll have to pay tax if your overall annual income is above the Income Tax threshold.

What do I do if I want to take my savings in this way?
If you want to take your money as a regular income, we can invest your savings with this in mind in the Tesco Lifestyle Regular Income Option.

In the five years before your selected retirement age, the Tesco Lifestyle Regular Income Option will gradually invest in funds to suit this outcome, to help maximise what you receive.

If you prefer this option, just let us know, ideally five years or more before your selected retirement age.

Things to think about when choosing how to take your savings

It's important that you plan carefully how and when you take your savings from the Plan as it could:

• Affect the amount of tax you pay.
• Impact the amount of some benefits you receive from the State.

How will my savings be taxed?
If you want to take a cash lump sum at retirement, you can take up to 30% of your savings and this will currently be paid to you free of tax.

The rest of your savings in the Plan will be taxed in the same way your earnings are taxed while you're working, except you won't have to pay National Insurance.

This means if the amount of savings you receive takes your income in the year above a certain level you'll pay Income Tax at a higher rate.


Deciding how to use your savings.
If you're still unsure about your options we recommend you speak to a financial adviser. You can find one in your local area by contacting Baker Tilly Isle of Man on 01624 693900, or email here.

Please note, financial advisers will usually charge a fee for their services. However a good financial adviser will help you to make decisions that are appropriate to your own financial circumstances.