Take action to reduce your future pension charges

We’ve made three new funds available to you, each with an Annual Management Charge (AMC) of 0.65%, and no deductions on future contributions (see Bid-Offer spread in the answer to the question about different types of charges).

You can:

• Switch all, or some, of your existing investment into the new funds.
• Redirect all, or some, of any future contributions into the new funds.

Click on the following for details of the new funds:

• Deposit Pension Accumulator (Universal Funds): ReAssure risk rating 1 - minimal risk.
• Corporate Bond Pension (Universal Funds): ReAssure risk rating 2 - low risk.
• UK & Global Equity Tracker Pension (Universal Funds): ReAssure risk rating 5 - medium/high risk.

To help with fund selection, there are also two investment strategies that divide your investment between the three funds.

• Low/Medium Risk Investment Strategy: ReAssure risk rating 3 – low/medium risk.
• Medium Risk Investment Strategy: ReAssure risk rating 4 - medium risk.

Important information

1. If you are currently invested in a unitised with-profits fund then switching funds may not be appropriate as you may lose valuable benefits. You can check this by looking at your annual statement. If you switch out of this fund you will not be able to switch back in.
2. The new funds are known as passive funds; this means they match the performance of a stock market index rather than being actively managed by a Fund Manager.
3. If you have a monthly policy fee, you may not be able to achieve an ongoing charge equivalent to 1% or less just by switching to the new funds. Instead, see Option 2 Transferring to a new pension.
4. If you wish to switch funds the 0.65% AMC will not apply to all the units in your fund. In the first few years of your pension policy (typically two years), the contributions you made were used to buy units known as initial units (sometimes referred to as capital units) which have higher management charges. After an initial period (specified in your pension contract) your contributions were used to buy standard units (sometimes referred to as accumulation units). If you choose to switch funds to one of the new low-cost funds the 0.65% AMC will apply only to the standard units, and not the initial units. For more information see Exit Charges in the answer to the question about different types of charges.
5. The information made available on the fact sheets available above is for information only. It has not been tailored to your personal circumstances and does not constitute investment advice. You should also read Morningstar’s general disclaimer here. For up to date daily unit prices, please use the Morningstar tool - click on unit linked fund information at the bottom of this page.
6. If you need assistance in reviewing your investments, you should speak to a Financial Adviser. You can find a Financial Adviser in your area at moneyhelper.org.uk/choosing-a-financial-adviser.

Annual Management Charge

The charge made over the year by product providers to cover the expenses associated with administering the pension plan. Although quoted as an annual percentage figure, the charge is usually taken from the fund daily.

Bid-Offer Spread (charges on new contributions)

Your pension contributions buy units in your selected investment funds. Units are bought at the offer price and sold at the bid price. The price at which you buy units is normally higher than the price at which you sell. The difference between these prices is called the Bid-Offer Spread, as referred to in the Terms and Conditions of your policy.

Investment Management Charges

Investment Management Charges (IMCs) are charges or expenses incurred when trading or maintaining the underlying investments, including taxes. Trading costs currently include such items as stamp duty and dealing commission, while administration costs primarily include investment management and custodian fees.

Charge for switching funds

ReAssure allows customers to make up to twenty fund switches each year free of charge.  A charge of £10 per switch is made for further switches. Customers who were with HSBC can make unlimited fund switches.

Exit charges

In the case of some older products, premiums in the early period of a policy (typically the first two years) were allocated to units known as initial units, designed to cover set up and distribution costs.  These units have little or no value if you transfer out of a policy, and are therefore sometimes thought of as an exit charge.  They do normally have a value on death.

If you transfer your existing pension into the ReAssure Retirement Account or a pension from another provider, then you need to consider the impact this will have (see Section 1 Facts and Figures, in your annual statement). Using this tool helps you see the impact of charges if you transfer into the Retirement Account by illustrating the point at which lower future fees offset the exit charge.

For members wishing to access their pension benefits or transfer their pension pot elsewhere, you should also be aware that a 1% cap has been applied to exit charges from age 55.

Policy Fee

A monetary fee (for example, £2 per month) which is deducted from a policy to cover administration costs.

Check the funds your existing policy is invested in by looking at Section 1 of your Annual Statement. This will show you the funds you are invested in and the number of units you hold, with their current value.

Compare the performance of funds by using the Morningstar tool - click on unit linked fund information at the bottom of this page. This tool gives easy access to a wealth of additional information on our various funds, including fund objectives, risk profiles and asset allocations.

You can also download fund factsheets and use the Morningstar functionality to compare the performance of different funds over time. We've produced a guide to help you find your way around the Morningstar tool.

You should also consider your attitude to risk before making a decision to switch funds. You can find information on the MoneyHelper website about this.

 If you’re not sure what to do with your policy, we recommend you speak to your Financial Adviser (FA). If you don’t have an FA, you can find one in your area by visiting moneyhelper.org.uk/choosing-a-financial-adviser.

ReAssure allows customers to make up to twenty fund switches each year free of charge. Customers who were with HSBC are able to make unlimited fund switches.

The majority of customers will be able to switch funds easily online.  Check the funds you are currently invested in on your annual statement.

You can also request a fund-switch over the phone by calling 0800 073 1777 (or +44 1952 292929 from overseas).

If you know which fund you wish to invest in we can process the switch based on your verbal instruction.  If you’re unsure then we’ll send you the list of funds that are available to you and the forms you will need to complete.

If your policy was formerly with Barclays Life or you have a Retirement Account you will need to call us rather than carry out the switch online.  Call 0800 197 5616, Monday to Friday (not including bank holidays) between 8.30am and 5.30pm

Transferring into our Retirement Account means you’ll pay an Annual Management Charge of 0.65%. There is no separate policy fee or deduction from new contributions (often referred to as a “Bid-Offer Spread”).

Once you reach age 55, this product also allows you to take advantage of the pension freedoms introduced in April 2015. You can make one-off or regular withdrawals from your policy, or take up to 25% of your fund as a tax-free lump sum.

Find out more about ReAssure’s Retirement Account.

Find out more about transferring your pension.

Find out more about pensions flexibility.

Click here to access a handy online tool that will show your retirement options based on your pension holdings, income and planned retirement age.

ReAssure is unable to provide financial advice, but we can give you factual information on options available to you to help you make your own decision. You should always seek financial advice if you are unsure.

You can find a Financial Adviser in your area by visiting moneyhelper.org.uk/choosing-a-financial-adviser.

If you are aged 50 or over, free and impartial guidance is available by visiting Pension Wise or calling them on 0800 138 3944.

Switching funds

Whilst you may be able to reduce your ongoing pension charges by switching funds you should be aware that the new funds are passively managed.  This means they are not actively managed by a fund manager but follow a stock market tracker. You need to check whether your existing funds are actively managed and whether you are happy to switch to funds that are passively managed.

Lifestyling option

If you've opted for a lifestyling option on your policy, switching funds may affect this automatic process, and could mean it's stopped in some cases. If you have, or think you may have, a lifestyling option on your policy, contact us to see how it will be affected.

Transferring out of your current pension

If you're currently invested in a with-profits pension and decide to transfer out of it you will not be able to switch back if you change your mind.

Loss of valuable benefits or guarantees

If your current pension offers valuable guarantees or benefits, for example; a Guaranteed Annuity Rate or Guaranteed Minimum Pension, then these would be lost if you transfer out of your current pension. If this is the case then you may be able to reduce your ongoing pension charges by switching funds within your existing pension.  Click here for more information.

Employer contributions

If you are employed and receive employer contributions you need to check that your employer is happy to divert their contributions to the new pension. Make sure you give them the details so they can make payments to the right place.

Exit charges (important information you should consider)

For members wishing to access their pension benefits or transfer their pension pot elsewhere, you should also be aware that a 1% cap has been applied to exit charges from age 55.

• You should always seek financial advice if you are unsure what to do. You can find a Financial Adviser in your area by visiting moneyhelper.org.uk/choosing-a-financial-adviser.
• Consider your attitude to risk. More information is available here.
• Review the information you will receive from ReAssure with your statement in conjunction with the additional information here.
• Review the funds you are currently invested in by looking at Section 1 of your annual statement. This will show you the funds you have invested in and the number of units you hold with their current value.
• Compare the performance of the funds you are already invested in with the performance of the new funds over the last twelve months. This can be done by using the Morningstar tool near the bottom of this page.
• Review how your current funds are managed and whether you require active fund management – the new funds are not actively managed by a fund manager but instead follow a stock market tracker.
• Compare the charges on your current funds with those on the new funds.
• Pay close attention to any valuable benefits included in your current pension that would be lost if you decided to transfer out. For example; Guaranteed Annuity Rates or Guaranteed Minimum Pension.
• Pay close attention to any exit charges there may be on your current pension before deciding to transfer.
• If you are receiving employer contributions then you will need to check your employer is happy to switch contributions to the new pension.

Why have I not received a leaflet from ReAssure?

We will be including information in future statements for all our pension customers starting from 14 April 2016. Depending on the timing of your statement it will be included with one of your next two statements. The new funds will be made available to all our customers during the second half of 2016.  The new pension product, the Retirement Account, is available now to all our customers.

Why don’t you make the fund switches for me rather than ask me to do it?

ReAssure is unable to make fund selections on your behalf that could impact the outcome of your investment returns.

Do I have to switch funds or transfer my pension?

You do not have to switch funds or transfer your pension to the Retirement Account (or another provider) but we wanted to make you aware that you may be able to reduce your ongoing pension charges if you do. You should consider fund performance and other benefits, as well as charges,  before making a decision. In the case of a small pension pot you could choose to do nothing, but be aware that ongoing pension charges are eroding your pension pot.

I only have a small pension pot with ReAssure.  Can I switch funds rather than combine with another pension or take as a cash lump sum?

There is no minimum value required to switch funds although if you remain in your current pension and switch funds then a policy fee could still be reducing the size of your pension pot.

Can you tell me what is the best thing for me to do?

ReAssure is not authorised to give financial advice. We have provided you with the information you need to make an informed decision about what is right for you. If you’re not sure what to do, we recommend you speak to your Financial Adviser (FA). If you don’t have an FA, you can find one in your area by visiting moneyhelper.org.uk/choosing-a-financial-adviser.

Does it matter whether I am still making pension contributions?

If you are still making contributions to your pension then you need to take into account Bid/Offer Spread which has the effect of reducing the value of ongoing contributions.  You can avoid this charge by switching to the Retirement Account which does not feature a Bid/Offer Spread.