the ricardo international pension scheme (rips) trustee ...ricardo also contributes to your pension,...

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The Ricardo International

Pension Scheme (RIPS)

Trustee RoadshowSeptember 2018

willistowerswatson.com

Today we’re going to cover…

…and the information and tools that are available to help you decide.

2© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

Why pension?1

Know where you’re going…

…to know how much to save

Help it grow

2

3


Your RIPS pension

What’s in it for you?

3


Saving in the RIPS –

what’s in it for you?


Less tax Your contributions are taken from

your income before tax

For a 20% tax payer, £80 in payslip

is worth £100 in your pension pot

For a 40% tax payer, £60 in payslip

is worth £100 in your pension pot

Save up to £40,000 per year tax-

free (your Annual Allowance)*

More money Ricardo also

contributes to your

pension, for example

extra pay that’s

deferred

…up to 7% of your

contribution earnings,

if you contribute this too

• More money for you – the company puts

in up to 7% of your contribution earnings

• You pay less tax

• Expertise and support on hand

More Support Trustees look after the

Scheme for you, to manage

your money and aim to help

it grow

Online tools to support you

on your journey

*unless you have previously drawn benefits flexibly – in which case your Annual Allowance falls to £4,000 per year

willistowerswatson.com 5© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

Pension

Savings

Cash

ISAs

Property

Stocks &

Shares

ISAs

Saving

Accounts

LISAs

There are lots of ways you

can save for your retirement

Note: The Trustees and Administrators are unable to

provide any form of financial or investment advice


© [yyyy] Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.



Saving Accounts

You can access your

savings at any time

and vary the amount

you contribute

month-to-month

Potential growth of

savings can be small

as current interest

rates are low

!

Pension

Savings

Property

Stocks &

Shares

ISAs

Saving

Accounts

LISAs

Cash

ISAs

6Note: The Trustees and Administrators are unable to



© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.



Property

High potential rate of

return from rise of

value in property

market

Requires large

upfront investment

and could be

negatively affected by rising interest rates or

falls in the market

!

Pension

Savings

Property

Stocks &

Shares

ISAs

Saving

Accounts

LISAs

Cash

ISAs







Cash ISAs

You can save up to

£20,000 a year and

the interest you earn

is tax free

Potential growth of

savings can be small

as interest rates are

low – you can access better interest rates

if you agree to invest

for a longer period

of time

!

Pension

Savings

Property

Stocks &

Shares

ISAs

Saving

Accounts

LISAs

Cash

ISAs







Lifetime ISAs

(LISAs)

Receive 25% of your

savings a year as a government ‘top-up’

You can only use it to

purchase property or fund retirement

savings – otherwise

there’ll be penalties.

Only available to

those aged between 18 and 39

Pension

Savings

Property

Stocks &

Shares

ISAs

Saving

Accounts

LISAs

Cash

ISAs



!





Stocks & Shares

ISAs

You can save

£20,000 a year and the investment

return you earn is

free from tax year on

year. You can also

choose the level of risk of your

investments

Stocks and Shares ISAs are subject to

fluctuations in

investment

performance

!

Pension

Savings

Property

Stocks &

Shares

ISAs

Saving

Accounts

LISAs

Cash

ISAs




Knowing where you’re going

means you’re more likely to

get there.

11


Tools available to help you…


Use the Retirement Budget Planner tool to work out how much you may need for your retirement


How does it work?The RIPS Retirement Budget Planner tool


Head to RIPS website1

Have your benefit statements to hand

Tell us who you’re budgeting for

2

3




Drop your icons into the basket4

Double-click to change the numbers

Click through tabs to make your

selections

5

6




Tell us a bit about you7

Tell us about your partner

Select how you plan to access your

savings

8

9




Check out your annuity results10

Check out your drawdown results

Access further learning and support

11

12


A small difference

could go a long way…

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Meet John and Julie…

18

Julie contributes

7% John contributes

5%

They both earn the same amount,

and both started contributing into the Scheme 7 years ago.

The company matches their contributions.


Over 7 years, John misses out by more than you might think…


John’s pot is

worth

£25,962after 7 years

Julie’s pot is worth

£36,347after 7 years

Julie gets £10,385 more

despite putting in only

£4,200 more than John

£21,647 of her pot is free

money from the

company and in

investment returns

£15,462 of his pot is free

money from the

company and in

investment

returns

Julie and John both have a salary of £30,000. These projections assume an investment return of 4% per year over seven years.

£0

£5,000

£10,000

£15,000

£20,000

£25,000

£30,000

£35,000

£40,000

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

John Julie


Remember, if you want to make

any changes to your contribution

rates, you must do so before the

end of the flex window –

14 September.


Using the pension calculatorSee the impact increasing your contributions could have on your future pension pot


Your contributions1

Your Selected Retirement Date

Illustration assumptions

2

3

With the tool you can adjust…


Using the pension calculatorSee the impact increasing your contributions could have on your future pension pot


Set your retirement income target to

model the additional amount you’d

need to save 4


Growing your money Think about how…

…you’ll keep tabs on how it grows

…much involvement and risk you want

…you’ll take it.

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willistowerswatson.com 24© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Wa tson client use only.

One size doesn’t fit all

Where are you on your journey?

PENSION

CHECK IN

Fred’s getting his head

around all his pension pots


Meet Simon


He needs…

• to put some money aside for the future but have enough left

over at the end of the month

• to know the pension basics and what he needs to do

• easy visibility of his savings – something he gets with his

latest banking app

He should…

• look out for his RIPS New Joiner email – a summary of what

he gets and actions to take

• get familiar with the tools and info at www.ripscheme.co.uk

• use the pension calculator to see the impact of saving more

and try to save the maximum amount the company will

match (7% of salary)

http://www.ripscheme.co.uk/


Meet Fred


He wants…

• to check-in with how he’s doing and think about if he needs

to be saving more

• to know where he stands with his savings –

he’s got lots of pensions with different employers

He should…

• use the Retirement Budget Planner to identify any savings

gap he may have

• use the Pension Calculator to see the impact of saving more

Fred’s getting his head

around all his pension pots

PENSION CHECK IN


Meet Alison


She wants…

• to think more about retirement now it’s within 10 years

• to travel the world and access more of her money early on in

her retirement

She should…

• go to an IFA for financial advice

• go to Capita’s At Retirement information

• choose how she wants to access her savings


You can now do more with your pot


70% of members are now accessing their savings via drawdown

Annuity Flex-access Drawdown Cash

Regular income

for a fixed period or for the rest

of your life

Guaranteed income

for the rest of your life or

for a fixed period

Savings remain invested

and you can withdraw

cash payments

Control over your savings

and manging your ongoing

investments

Take your savings as cash

in one go or spread

over time

Control over how you use

your savings

?

?

?

Before April 2015…Now…


A guaranteed

income for lifeAnnuity

Decide your income

year-by-yearFlex-access Drawdown

Access your savings

whenever you wantCash

Consider whether you’d like to

purchase an annuity for your

dependants

Ensure you have

enough savings to not

run out later in life

Ensure you have

enough savings to not

run out later in life

Consider how you will drawdown

your savings, as it will impact

the tax you pay

Withdrawing a large amount

of cash could move you into

a higher-rate tax band

There are charges associated

with different options

Your savings will gradually

be worth less unless you re-invest

or spend it immediately

25% tax-free lump sum 25% tax-free lump sum 25% of each withdrawal is tax free

Taxed at marginal rate Taxed at marginal rate75% of each withdrawal taxed

at marginal rate

Option to purchase annuity for dependantsRemaining funds paid to beneficiaries

(taxed at marginal rate)Remaining funds paid to your beneficiaries

via your will (subject to inheritance tax)

Consider whether you’d like

a fixed income for the rest

of your life, or if you’d like

an income that will rise

with inflation

Please note, if you choose to access your savings through drawdown or cash, this could trigger the Money Purchase

Annual Allowance (MPAA) that would restrict your future tax-free savings unless your total amount is under £10,000.

You’ll need to transfer

out of the scheme,

(except for ‘one-off drawdowns’ to

facilitate payment of a protected sum)

You can take a maximum of three

withdrawals – one per tax year,

at a minimum of £10,000

How to decide what’s best for you


Read the Retirement options factsheet

on our website

Check out the At Retirement information

via your RIPS account

If you’re within 10 years of retiring…now’s the time to think about how you

want to access your savings


If you’re over 50, get free and impartial

guidance at pensionwise.gov.uk

Locate an impartial financial adviser

at moneyadviceservice.org.uk.

Find out more about

your optionsGet financial advice 1 2

If you plan to purchase an annuity,

speak to Capita’s partner, LV,

who can help you source one

Take a look at the

Your pension: It’s time to choose guide

that’s included in your retirement pack


New options

more relevant for you70% of our members are now accessing their savings via drawdown.

We’re making changes to reflect this.


We’re changing

our default option

Currently that’s our Lifestyle Annuity account.

But this will change to a Lifestyle Drawdown

account later this year.

If you’re currently in the Lifestyle Annuity

account you will automatically move to the

Lifestyle Drawdown account unless you ask

us not to.

1

An account that grows

your money assuming

you’ll want to have a

regular income for

the rest of your life…

An account that grows

your money assuming

you control your annual

income, which can vary

from year to year, whilst

keeping your savings

invested

want to.

Don’t worry, you’ll have plenty of time to make a decision and

we’ll be sharing more information to help you decide.

Annuity Lifestyle Drawdown Lifestyle Cash Lifestyle Risk-graded Self Select

You’ll move from... …to


We’re changing

how we grow your moneyWe want to help you grow your money as best we can.

For our Lifestyle and Risk Graded accounts, we’re changing the

funds we invest in on your behalf to ensure you’re getting a good

return on your savings.

2



We’re changing

some of the funds on offer

For those of you who have chosen to be in control of your

investments, we’ll be adding more funds for you to choose from.

We’re also changing some of the funds currently on offer to ensure

they’re still growing your money the best way they can.

3



We’ll be communicating

more about these changes

with you later in the year

35


Any questions?

the ricardo international pension scheme (rips) trustee ...ricardo also contributes to your pension,...

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