Bank of America
Access your savings Now consider your personal circumstances and retirement plans. The Plans offer investment flexibility so that you can ensure that your investments are in line with how you plan to access your savings.
The earliest age you can access your savings is age 55. From 2028, this will increase to 57, and will then always be 10 years below the State Pension Age. And you can delay accessing your savings until age 75. So you just need to decide the right age for you – known as your Target Retirement Date.
Remember that the earlier you access your savings, the less time you have to make contributions/receive bank contributions. Contact the Plan Administrators if you need to change your Target Retirement Date.

Bank of America Merrill Lynch UK Pension Plan
Merrill Lynch UK Defined Contribution Plan

The Plan's normal retirement age is age 62. So unless you choose otherwise, this will automatically be your Target Retirement Date. For most members, this may be too early.

Choosing the right target retirement age is particularly important when it comes to your investment choice. If you are invested in a Lifestyle option, this age determines when your Account moves between investing in funds that aim to maximise growth (the Growth phase) and the Pre-retirement phase where your investments align with how you plan to access your savings.

If your Target Retirement Date is set too early, your investments will change too soon, and you may lose out on potential growth. If it is too late, you may not get the best value for money when you come to accessing your savings.

Bank of America UK Pension Plan

The Plan's normal retirement age is age 60. So unless you choose otherwise, this will automatically be your Target Retirement Date. For most members, this may be too early.

Choosing the right target retirement age is particularly important when it comes to your investment choice. If you are invested in a Lifestyle option, this age determines when your Account moves between investing in funds that aim to maximise growth (the Growth phase) and the Pre-retirement phase - the objectives of which will depend on the Lifestyle option you choose.

If your Target Retirement Date is set too early, your investments will change too soon, and you may lose out on potential growth. If this is too late, you may not get the best value for money when you come to accessing your savings.
Access your savings
Now consider your personal circumstances and retirement plans. The Plans offer investment flexibility so that you can ensure that your investments are in line with how you plan to access your savings.

When do you want to access your savings?

The earliest age you can access your savings is age 55. From 2028, this will increase to 57, and will then always be 10 years below the State Pension Age. And you can delay accessing your savings until age 75. So you just need to decide the right age for you – known as your Target Retirement Date.
Remember that the earlier you access your savings, the less time you have to make contributions/receive bank contributions. Contact the Plan Administrators if you need to change your Target Retirement Date.

Bank of America Merrill Lynch UK Pension Plan
Merrill Lynch UK Defined Contribution Plan

The Plan's normal retirement age is age 62. So unless you choose otherwise, this will automatically be your Target Retirement Date. For most members, this may be too early.

Choosing the right target retirement age is particularly important when it comes to your investment choice. If you are invested in a Lifestyle option, this age determines when your Account moves between investing in funds that aim to maximise growth (the Growth phase) and the Pre-retirement phase where your investments align with how you plan to access your savings.

If your Target Retirement Date is set too early, your investments will change too soon, and you may lose out on potential growth. If it is too late, you may not get the best value for money when you come to accessing your savings.

Bank of America UK Pension Plan

The Plan's normal retirement age is age 60. So unless you choose otherwise, this will automatically be your Target Retirement Date. For most members, this may be too early.

Choosing the right target retirement age is particularly important when it comes to your investment choice. If you are invested in a Lifestyle option, this age determines when your Account moves between investing in funds that aim to maximise growth (the Growth phase) and the Pre-retirement phase - the objectives of which will depend on the Lifestyle option you choose.

If your Target Retirement Date is set too early, your investments will change too soon, and you may lose out on potential growth. If this is too late, you may not get the best value for money when you come to accessing your savings.

Understand your choices

Choosing how to access your savings is an important decision and the right option for you will depend on your personal circumstances.
Important note: if you are a member of the Bank of America UK Pension Plan, certain restrictions will apply over how you use your Plan savings. All members will have a Guaranteed Minimum Pension (GMP). Some members may also have an Internal Annuity Conversion (IAC) and/or an A-day guarantee – read about these in the BoA Plan Handbook.
Annuity
Option to take up to 25%* of your savings tax free
Then buy an annuity (regular income in retirement) from the open market.
Cash
Option to withdraw your savings in one or multiple lump sums of which 25%* of each lump sum is tax free
The number of cash lump sums you can take from the plan depends on whether or not you are an employee member when you access you savings and/or the discretion of bank and the trustees of the Plans.
Income drawdown
Option to take up to 25%* of your savings tax free, and
Access your savings in a number of stages (income drawdown) over a longer-term period. You would need to transfer your Account out of the Plan to use this option.
You may be able to choose a combination of these options
* The amount will depend upon your personal circumstances but will be at least 25%.
Choosing how to access your savings is an important decision and the right option for you will depend on your personal circumstances.
Important note: if you are a member of the Bank of America UK Pension Plan, certain restrictions will apply over how you use your Plan savings. All members will have a Guaranteed Minimum Pension (GMP). Some members may also have an Internal Annuity Conversion (IAC) and/or an A-day guarantee – read about these in the BoA Plan Handbook.
Annuity
Option to take up to 25%* of your savings tax free
Then buy an annuity (regular income in retirement) from the open market.
Cash
Option to withdraw your savings in one or multiple lump sums of which 25%* of each lump sum is tax free
The number of cash lump sums you can take from the plan depends on whether or not you are an employee member when you access you savings and/or the discretion of bank and the trustees of the Plans.
Income drawdown
Option to take up to 25%* of your savings tax free, and
Withdraw your savings in a number of stages over a longer-term period
You may be able to choose a combination of these options
* The amount will depend upon your personal circumstances but will be at least 25%.

What is right for you?

There is no right or wrong answer and some members may choose a combination of options. The following case studies simply illustrate some of the options that may be considered.
Important note: if you are a member of the Bank of America UK Pension Plan, certain restrictions will apply over how you use your Plan savings – the case studies below do not take this into account. Please also note that the investment options shown are currently only applicable for the Bank of America Merrill Lynch UK Pension Plan and the Merrill Lynch (UK) Defined Contribution Plan.
What will Jackie do with £25,000?
What will Mo do with £100,000?
What will Jim do with £50,000?
What will Dee do with £250,000?
There is no right or wrong answer and some members may choose a combination of options. The following case studies simply illustrate some of the options that may be considered.
What will Jackie do with £25,000?
Meet Jackie who has
£25,000 in savings

Annuity

First Jackie takes £6,250 tax-free cash. If Jackie then chooses an annuity, she may receive £930 a year for a single-life level pension or £870 a year for a joint-life pension.
Why it might appeal to Jackie
  • She could top up her other retirement income securely.
  • She would have the certainty of a steady income that would not run out.
Points to consider
  • On her death, her spouse would only receive income if she had taken a joint-life pension – this would be £435 a year using the example annuity above.
  • Will this small amount of income make a difference to her lifestyle? Does this option give her value for money?
  • Her decision would normally be irreversible.

Cash

First Jackie takes £6,250 tax-free cash. If Jackie takes her remaining savings as cash in one go, she would receive a £18,750 taxable lump sum.
Why it might appeal to Jackie
  • Jackie has her eye on several things for the house and would like an all-inclusive holiday for her family.
Points to consider
  • Jackie needs to consider the tax implications of taking a large taxable lump sum in one go.
  • Once the cash is spent, nothing would pass to her beneficiaries on death.

Income drawdown

If Jackie keeps her remaining savings invested and withdraws cash over a fixed period (income drawdown), she may choose to take a fixed taxable amount each year for three years.
Why it might appeal to Jackie
  • Jackie has several holidays planned.
  • She may benefit from a little investment growth while her savings continue to be invested, although the value of her fund could also fall.
Points to consider
  • Jackie would currently need to transfer her savings out of the Plan if she wishes to take this option.
  • Jackie could decide to either take up to 25% as tax-free cash immediately, or take it in stages as she draws her income, depending on the type of drawdown she chooses.
  • Jackie needs to consider the tax implications of taking a fairly large taxable lump sum for a few years.
  • If Jackie dies before age 75 and before withdrawing all her savings, these could pass directly to her beneficiaries free of tax.
  • There will be investment management charges on the savings that continue to be invested.

Jackie plans to take all of her savings as cash

She is confident that she has enough income from other sources to provide for her retirement – her mortgage is paid up and she has other savings. She decides to take her tax-free cash sum – the remainder of her savings she also wants to take as cash in her first year of retirement. The taxable payment will be added to any other taxable income to determine the rate of tax she will pay on it.
How Jackie might invest her savings in the run-up to retirement
As Jackie is not a confident investor and prefers to take as little investment risk as she needs to, she has chosen the Lifestyle – Tay option. 5 years before her Target Retirement Date, she should choose the Lifestyle Tay – Cash option during the Pre-retirement phase (if she does not take action, her savings will automatically be invested in the Flexible option) so that her savings are already invested in a Cash fund when she wants to take them at age 62.
Jackie needs to keep her investments under review in case her circumstances and priorities change.

See the other case studies

What will Jim do with £50,000?
What will Mo do with £100,000?
What will Dee do with £250,000?
What will Jim do with £50,000?
Meet Jim who has
£50,000 in savings

Annuity

First Jim takes £12,500 tax-free cash. If Jim then chooses an annuity, he may receive £1,890 a year for a single-life level pension or £1,770 a year for a joint-life pension.
Why it might appeal to Jim
  • It would provide an additional regular income to top up his other savings.
  • Jim would have the certainty of a steady income that would not run out.
Points to consider
  • On his death, his spouse would only receive income if he had taken a joint-life pension – this would be only £885 a year using the example annuity above.
  • As Jim expects to live until age 90, he believes the annuity will give him value for money.
  • Jim’s decision would normally be irreversible.

Cash

First Jim takes £12,500 tax-free cash. If Jim takes his remaining savings as cash in one go, he would receive a £37,500 taxable lump sum.
Why it might appeal to Jim
  • He could use the lump sum to pay off his mortgage, reducing his future income needs.
Points to consider
  • Jim needs to consider the tax implications of taking a large taxable lump sum in one go.
  • Once the cash is spent, nothing would pass to his beneficiaires on his death.
  • Jim needs to ensure he has enough income from other sources to live on if his savings run out.

Income drawdown

If Jim keeps his remaining savings invested and withdraws cash over a fixed period (income drawdown), he may choose to to take a fixed taxable amount each year for three years.
Why it might appeal to Jim
  • These payments meet his income needs during the three years until his other pensions come into payment (62-65).
  • He may benefit from additional investment growth, although the value of his savings could go down. Jim needs to consider the tax implications of taking a fairly large taxable lump sum for a few years.
Points to consider
  • Jim would currently need to transfer his savings out of the Plan if he wishes to take this option.
  • Jim could decide to either take up to 25% as tax-free cash immediately, or take it in stages as he draws his income, depending on the type of drawdown he chooses.
  • If Jim dies before age 75 and before withdrawing all his savings, these could pass directly to his beneficiaries free of tax.
  • There will be investment management charges on the savings that continue to be invested.

Jim plans to take all of his savings as cash at age 62

Jim knows that he will be able to rely upon his other sources of income, such as his final salary pension from his previous employer. Taking cash will tide him over until this becomes payable at age 65. Jim needs to carefully review his tax position as taking the taxable cash sum in one year may mean that he would be liable to pay higher-rate income tax. He may consider taking it over a longer period.
How Jim might invest his savings in the run-up to retirement
Jim has chosen to be invested in the Lifestyle Thames option as it provides his investments with good opportunities to grow, plus he prefers a more ‘hands off’ approach to his investments. 13 years before his Target Retirement Date, Jim needs to make sure he is invested in the Lifestyle Thames - Cash option (if he does not take action, his savings will automatically be invested in the Flexible option) during the Pre-retirement phase so that his savings are invested in a Cash fund when he wants to take them. This will ensure he gets the best value for money.
Jim needs to keep his investments under review in case his circumstances and priorities change.

See the other case studies

What will Jackie do with £25,000?
What will Mo do with £100,000?
What will Dee do with £250,000?
What will Mo do with £100,000?
Meet Mo who has
£100,000 in savings

Annuity

First Mo takes £25,000 tax-free cash. If Mo then chooses an annuity, he may receive £3,810 a year for a single-life level pension or £3,570 a year for a joint-life pension.
Why it might appeal to Mo
  • If Mo wants additional regular income for himself, which will not run out during his retirement.
  • Mo anticipates a long life expectancy so security of income is important to him.
Points to consider
  • On his death, his spouse would only receive income if he had taken a joint-life pension – this would be £1,785 a year using the example annuity above.
  • His decision would normally be irreversible.

Cash

First Mo takes £25,000 tax-free cash. If Mo takes his remaining savings as cash in one go, he would receive a £75,000 taxable lump sum.
Why it might appeal to Mo
  • Mo wants a deposit to put on a holiday apartment so could do with the extra cash now.
Points to consider
  • Mo needs to consider the tax implications of taking a large taxable lump sum in one go.
  • Once the cash is spent, nothing would pass to his beneficiaires on his death.
  • Can the holiday apartment generate extra income in retirement?

Income drawdown

If Mo keeps his remaining savings invested and withdraws cash over a fixed period (income drawdown), he may choose to to take a £4,000 taxable amount each year, ignoring any potential investment returns.
Why it might appeal to Mo
  • If Mo is happy to drawdown an income and keep the capital invested.
  • If Mo is comfortable managing his ongoing investments.
Points to consider
  • Mo would currently need to transfer his savings out of the Plan if he wishes to take this option.
  • Mo would have to review the investment returns he receives to ensure his income will be sustainable for the rest of his life.
  • Mo could decide to either take up to 25% as tax-free cash immediately, or take it in stages as he draws his income, depending on the type of drawdown he chooses.
  • If Mo dies before age 75 and before withdrawing all his savings, these could pass directly to his beneficiaries free of tax.

Mo plans to buy an annuity at age 62

Mo likes knowing that he will receive a regular income for the rest of his life and his Bank of America Merrill Lynch UK Pension Plan will be his main source of income. If he dies before age 75, and chose a joint-life option, the annuity that would be payable to his widow would be tax free.
How Mo might invest his savings in the run-up to retirement
Mo is invested in the Lifestyle Severn option as it offers the maximum potential growth for his pension savings but prefers to leave the detail to the fund managers. 7 years before his Target Retirement Date, he needs to ensure that he has chosen the Lifestyle Severn – Annuity option (if he does not take action, his savings will automatically be invested in the Flexible option) during the Pre-retirement phase. This means that he will be invested in Gilt and Cash funds at retirement, ensuring best potential value for his money.
Mo needs to keep his investments under review in case his circumstances and priorities change.

See the other case studies

What will Jackie do with £25,000?
What will Jim do with £50,000?
What will Dee do with £250,000?
What will Dee do with £250,000?
Meet Dee who has
£250,000 in savings

Annuity

First Dee takes £62,500 tax-free cash. If Dee then chooses an annuity, she may receive £9,470 a year for a single-life level pension or £9,030 a year for a joint-life pension.
Why it might appeal to Dee
  • If Dee wants the security of a regular income.
  • She could provide some protection for her spouse by taking out an annuity that would provide them with a pension on her death.
Points to consider
  • On her death, her spouse would only receive income if she had taken a joint-life pension – this would be £4,515 a year using the example annuity above.
  • Her decision would normally be irreversible.
  • Dee needs to consider her life expectancy as she may not receive value for money.

Cash

First Dee takes £62,500 tax-free cash. If Dee takes her remaining savings as cash in one go, she would receive a £187,500 taxable lump sum.
Why it might appeal to Dee
  • Dee has a second child to put through university – extra cash in the short term will help with these costs.
Points to consider
  • Dee needs to consider the tax implications of taking a large taxable lump sum in one go.
  • Unspent money may be passed to beneficiaries on her death. However, if the cash is spent, nothing would pass to Dee’s beneficiaries.

Income drawdown

If Dee keeps her remaining savings invested and withdraws cash over a fixed period (income drawdown), she may choose to to take a £18,750 taxable amount each year, ignoring any potential investment returns.
Why it might it appeal to Dee
  • If Dee is happy to take some investment risk to get a higher income through retirement.
Points to consider
  • Dee would currently need to transfer her savings out of the Plan if she wishes to take this option.
  • Dee would have to review the investment returns she receives to ensure her income will be sustainable for the rest of her life.
  • Dee could decide to either take up to 25% as tax-free cash immediately, or take it in stages as she draws her income, depending on the type of drawdown she chooses.
  • If Dee dies before age 75 and before withdrawing all her savings, these could pass directly to her beneficiaries free of tax.
  • Dee could still buy an annuity at a later age if she wishes.

Dee plans to take advantage of income drawdown

Dee recognises that this will potentially give her greater returns on her savings while she is able to rely on her spouse’s secured source after they both stop work. Dee will transfer her savings out of the Plan to take advantange of income drawdown as this option is currently not available in the Plan. Dee is also keeping her options open – she may later decide to buy an annuity in her 70s.
How Dee might invest her savings in the run-up to retirement
Dee is invested in the Lifestyle Thames option as she was happy with this medium level of investment risk during the Growth phase and she has always had limited time to take control of her investments. If time continues to be an issue, meaning Lifestyle continues to be appropriate, Dee needs to make sure she is invested in the Lifestyle Thames – Flexible option 13 years before her Target Retirement Date (also the default option) so that her Account continues to be invested in suitable investments that aim to continue to achieve potential growth. If Dee finds she has more time, she may prefer to invest in one or more of the Freestyle funds that aim to achieve growth.
Dee needs to keep her investments under review in case her circumstances and priorities change.

See the other case studies

What will Jackie do with £25,000?
What will Jim do with £50,000?
What will Mo do with £100,000?

Consider

Your income
  • Lifestyle
  • Healthcare
Your income
  • State Pension
  • Partner’s income/pension
  • Other income and savings
  • Tax position
Your attitude and outlook
  • Age now/life expectancy
  • Attitude to investment risk
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