Frequently asked questions

What impact will these changes have on clients and their employees?

We're constantly reviewing our Workplace Pension offering to help us meet customer and market demands. Through these changes, we'll enhance the features of our workplace pensions, at no extra cost.

For example, employees will benefit from greater flexibility at retirement through the introduction of integrated flexible access drawdown (referred to as flexible income) and they'll also be able to remain invested in their plan up to age 99 before taking benefits. In addition, our charges will become more transparent.

We're also consolidating our range of advice charge options and removing access to our Unitised With Profit fund.

When will this service be available to employees?

You can find out the dates here.

How will employees be able to access integrated flexible access drawdown?

From normal minimum pension age (currently 55, increasing to 57 from April 2028), employees can access integrated flexible access drawdown by contacting our Retirement Team on 0345 835 6644. Lines are open, 9am to 5pm Monday to Friday.

What is the minimum pot size to access integrated flexible access drawdown?

The minimum initial designation amount an employee can move into drawdown is £10,000, including any tax-free cash amount the employee chooses to take.

Further designations can be made, with a minimum amount of £2,000 (including any tax-free cash amount the employee chooses to take) or the full balance of their retirement savings, if less.

There's no minimum amount that needs to be retained within their retirement savings pot.

Can employees access drawdown now?

Employees who’ve already benefited from the enhancements and changes can access integrated drawdown through their existing workplace pension plan.

Employees that haven’t benefited from the enhancements and changes, and want to access drawdown with Scottish Widows, can do so by moving to our Retirement Account plan. They can contact our Retirement Team on 0345 835 6644. Lines are open 9am to 5pm, Monday to Friday. Once the enhancements and changes have gone through, any employees who want to access drawdown for the first time, will be able to do so through their existing workplace pension plan.

What investment options will be available in drawdown?

Employees will be able to access our Investment Pathways as well as the full range of self-select funds (up to 10 funds) available through their current plan.

Can we accept a drawdown to drawdown transfer on integrated drawdown?

No, we don't accept drawdown to drawdown transfers.

What is the charging structure for integrated drawdown?

There's no change to the charging structure of the plan, so customers will continue to benefit from our transparent approach to charges. Specifically, their plan administration charge will remain the same. Investment charges will depend on what investment options the customer chooses.

Are advice charges available in integrated drawdown?

Yes, for GPP schemes only. Both ad-hoc and ongoing advice charges options.

Will an existing adviser charge continue to be paid after first designation?

If an advice charge is already in place, this will be paid across the plan. As such, as point of designation, a check will be made to the employees’ adviser to ensure that they’ve provided advice on the drawdown element of the plan. If not, the entire charge will be stopped.

How long does the ADB cover last?

Employees, whose plans were set up on or before 28th January 2022, will have ADB added or extended on their plan for 5 years. All new employees joining on or after 29th January 2022 will also qualify for ADB for the first 5 years of their plan.

What does your investment governance look like?

A strong governance and control framework lies at the heart of what we do, to check that our funds meet operational due diligence requirements, including compliance with regulations, as well as perform in line with their objectives and risk profiles, with the aim of delivering good customer outcomes.

Our fund governance delivers:

• rigorous fund manager oversight delivered by a dedicated in-house fund selection and governance team
• careful monitoring of performance and risk profiles
• for our mandated funds, clear instructions and parameters for fund managers
• for our key multi-asset funds, longer-term asset allocation decisions, plus oversight of tactical asset allocation, aiming to benefit from shorter-term opportunities or mitigate temporary risks.

What changes can be made as a consequence of the governance procedures?

We may make changes in certain circumstances without consent, such as:

• We may move customers to our default investment strategy once processed as a leaver if the customer is invested in a bespoke lifestyle
• We may move customers to our default investment strategy if we become aware an adviser is no longer supporting a bespoke strategy.

Customers that are impacted by either of these scenarios will be informed of any change.

What changes are being made to the fund range?

For GPP, we're the extending the self-select fund range to provide employees with access to additional choices across asset classes and sectors, including environmental, social and governance (ESG) options.

Employees may also notice changes to some fund names, which have resulted from historic fund manager mergers, acquisitions or re-branding. These changes are outlined in the table below:

Will the fund range be the same for Group Personal Pension and Group Stakeholder Pension?

No, the GSHP fund range will remain as it is today.

When will the extended fund range be available (GPP only)?

Access to the extended fund range will be made available at the time of change for each GPP scheme and their employees.
 

Where can I find out more information about the new fund series?

Find out more information about the GPP fund series (PDF, 924KB)
Find out more information about the GSHP fund series (PDF, 618KB)

This is different to the fund series that has been accessed before. The unique identifiers for each fund (SEDOL/ISIN/MEX ID) have changed. It’s important that if you’re searching for details of a specific fund, you use the links above.

How will the new charging structure work?

After we make the changes to plan T&Cs, employees will be able to see the different charges that make up the Total Annual Fund Charge (TAFC) more clearly, as detailed below:

• Annual Management Charges (AMCs) – the cost of managing each investment fund, deducted daily through the price of funds.
  
• Fund Expenses (FEs) – additional costs linked to operating each investment fund, for example, legal, auditor and custodian costs deducted daily through the unit price.
  
• Fund Based Charge (FBC) - the cost of operating their plan, calculated daily and deducted each month by selling units from their plan. FBCs will be deducted from the least volatile fund (i.e. the fund which is expected to experience the least fluctuations in its unit price over time).

The sum of these charges will equal the Total Annual Fund Charge (TAFC).
 

How are you simplifying the different levels of charging on different payment types?

At the moment, employees can pay different levels of charges on different payment types – regular, single and transfer payments. Moving forward, we’re going to simplify this approach meaning the same charge levels will apply to all payment types.

• For employees who currently pay a higher single payment (SP) / transfer payment (TV) than their regular payment (RP), moving forward the RP charge will apply across all 3 payment methods. This means employees will see a reduction in charges if they have made and/or make any future TV or SPs.
• For employees who currently pay a lower SP/TV than their RP charge, a new blended rate will apply across all payment types. This means that employees won't see any immediate increase in overall charges. Moving forward, their RP charge will reduce but they could see an overall increase in charges in the future, depending on whether they’ve made or make any TV or SPs in the future, and the value of those payments.
  
• Any new joiners will pay the same level of charges on all payment types.
   

Within the same scheme, can employees have different charges from each other?

Yes. Employees could have different charges based on historical scheme charges, the types of payments they have paid and the funds they have invested in.

You have advised that you're rationalising the advice charge range. How can I find out if my current option is still available?

If you were utilising an advice charge option that was removed, we'll have already contacted you to explain what you need to do.

There are three advice charge options now available:

1. Ongoing advice charge - ongoing percentage of the (full) retirement plan value, paid monthly.

2. One-off advice charge - a one-off payment, which you can ask us to pay at any time.

3. Initial advice charge - a percentage of transfer value, paid once at the point of transfer.

For ongoing charges (1), only one charge is available per plan. If we receive a subsequent advice charge request, we’ll cancel the existing charge. This is a change from what happens today.
 

Are advice charges available on Drawdown?

Yes, for GPP schemes only. Both ongoing and ad-hoc advice charges are available. Where requested, ongoing charges will apply across the entire plan.

Why are you no longer supporting UWP funds?

We periodically review the range of funds we offer to new and existing customers.  We haven't offered the UWP fund to GPP employees since 2012 and have never offered the fund to GSHP.  We've now decided to remove access to UWP for customers.

How does the removal of Unitised With Profits (UWP) impact employees?

We wrote to all employers and employees with UWP investments in November 2020, to let them know we've removed UWP as an investment option and what we've done on their behalf.

Employees' plans with UWP investments were detached from their employers' workplace pensions and established as individual pension plans. A new plan was created within their employer's pension scheme to accept all future contributions. Future contributions were initially invested in line with the scheme default, but employees had the option to select an alternative.

Each affected employee now has 2 plans which they can view side by side through our online services.

Will employees lose their guarantees, terminal bonuses or be impacted by Market Value Reductions (MVR)?

Any entitlement to terminal bonus won’t be impacted as the employees pension pot will continue to invest in UWP, however no further payments facilitated by the employer will be invested into UWP.

Employees can choose to make personal or transfer payments to their plan invested in the UWP Fund, if they wish.

If employees transfer or take their UWP benefits at a date other than a no-MVR guarantee date, then any MVRs in force will apply as they do today.

You can also find out more in our Your Guide to With-Profits here (PDF, 547KB).

What Fund Series are currently available to Workplace products and how will this differ following these changes?

• GPP New Business will use Series CS7.
• Existing GPPs will move from Series 2 to Series CS8.
• Existing GSHP will move from Series 3 to Series CS9.
   

Why are the existing GPP clients getting a different fund series from new business GPP?

New schemes will only have access to our extended fund range. We believe this provides a comprehensive investment choice.

Existing GPP employees will continue to have access to all of the funds they currently do, plus additional funds in our extended fund range.

Will employees lose all fund performance history by establishing a new fund series?

No. We’ll be using Series 2 and Series 3 to continue to show the past performance, which means you’ll be able to view the performance of the fund historically for 5 years on the fund factsheet.

Why are you applying a unit adjustment?

The changes we’re making to how we deduct charges mean we need to introduce a new fund series.

Our phased approach to the changes means the new fund series will be priced differently from the existing fund series. However, while employees will notice a difference to their unit prices, their overall plan values will not be affected by this change.

We’ll ensure this by allocating units of an equivalent value to employees’ plans. For example, say units in an existing fund series were priced at £1 on the day we introduce the changes, and units in the equivalent new fund series were priced at £0.50 on that day; if an employee’s plan held 1,000 units (1,000 x £1 = £1,000) in the existing fund series, we would convert their plan’s holding to 2,000 units in the new fund series (2,000 x £0.50 = £1,000).

Following the unit adjustments, we’ll write to employees to confirm their new unit holdings and prices on the date of change.

Are there any changes to the premium investment timings?

We’re changing the way we invest the payments made into pensions.  Where we have a clear instruction and have received everything we need, payments will be invested depending on their payment type:

• Direct Debit payments – buy units at the next business day’s unit prices, or the business day after that.
• Cheque payments – buy units at the unit price applying up to 2 business days after receipt.
• BACS or Faster Payment – buy units at the unit prices applying up to 3 business days after receipt.
• Investment or disinvestment requests, such as switches, or partial encashments, received during business hours will generally be processed using the next day’s unit prices. However, to pay one-off advice charges, we'll use the unit prices applying up to three business days after we receive your instruction.

For disinvestment for income payments, made from flexible access drawdown, we'll sell units up to 11 business days in advance of making a payment.

The completion of the instruction is dependent on the investment fund selected; some funds could have longer dealing times.

Why will BACS or cheques take longer than before?

Payments received by Direct Debit are available on our bank accounts on the same day. This allows us to initiate the investment instruction.

Payments sent by BACS or Faster Payment are not available on system until the next working day. Only once these are visible can we initiate the investment instruction. This means payments submitted by BACS or Faster Payment can take up to an additional three business days to invest.

How will you keep me informed of the payment suspension and the impact to clients and their employees?

We’ll write to employers and employees in advance of the pension payment suspension period to let them know the exact dates and any actions required. Indicative dates will be shown here. Our digital services will also provide notification of the dates as well. 

What impact will the payment suspension have to new business?

There will be no impact to new business.

What are the new bank account details, following the completion of the payment suspension period?

Account Name: SWL GPP GSP Collins (a Scottish Widows Limited bank account)
Account Number: 10908908
Sort Code: 16-04-00

Overseas clients should use:
Account Full Name:  Scottish Widows Limited Workplace Savings GPP & GSP Pension Collections
Account Number:  10908908
Sort Code: 16-04-00
BIC Number: RBOSGB2L 
IBAN: GB38RBOS16040010908908.

Will Single Premium Direct Debits for one-off payments still be switched off due to inactivity after a year?

Moving forward, only one file will be uploaded each month and this will include both regular and single payments, but it will be collected under one Direct Debit.

This will remove the issue of anything being switched off due to inactivity after a year.

However, please note that non UK bank accounts cannot be accepted.

What happens if I request a change to a clients fund range before or during these changes?

If you want to change a client’s fund range before or during these changes, please get in touch with your usual Scottish Widows contact to discuss this.

Why do you have different fund factsheets for your new fund series?

New factsheets have been produced to support the creation of the new series of funds. Past performance of the fund has been retained and will be shown on the new factsheets.

What should I do if I have any questions or need more information about these changes?

Please contact us here.