Reviewing your annual pension benefit statement

The retirement age shown on your statement is based on the age you or your adviser may have provided to us in the past. If you wish to change this, simply speak to your adviser, or log in to fidelity.co.uk/clients. If you have already passed the retirement age originally provided to us, then we assume you might retire at 75. If you are 75 or older, we assume you’ll retire in five years’ time. So, if you are 77, for example, we assume you’ll retire at age 82.

You could retire earlier or later than the retirement age we have recorded for you.

An estimated growth rate is used for the investments you have in each account (before the effect of inflation or charges are taken into account). The rate is based on the types of investments you have in that account.

So, the assumed growth rate will be somewhere between 0.6% and 5%, depending on the types of funds in your savings accounts.

If you have drawdown accounts invested in the same investments and percentages, then the growth rate for your drawdown accounts will be the same. If you have different investments and/or percentages, then the growth rate calculated for your drawdown accounts will be different.

In addition, to give you an idea about how your drawdown savings might grow in differing market conditions, we also show growth rates of 3% lower and 3% higher than the mid growth rate, as set out in regulation.

We have also assumed you will keep the same investments and that your future contributions and/or withdrawals will continue as per the current arrangements.

The growth rates used in your forecasts are based on Fidelity’s assumptions about how markets might perform in the future as well as taking into account certain limits as set out by our regulators. While these assumptions are informed by history, they are hypothetical in nature and so the actual growth rate achieved by your investments over time may be very different. This could be higher or lower than the mid growth rate used in the forecast and their value may even fall.

In addition, you may change your existing investments over time, which could also affect how your savings might grow.

Inflation affects the costs of goods and services we buy each year. This means your income will probably buy you less in the future than it does today. As an example, £10,000 in a cash account paying 0% interest could be affected by a 2% annual rise in inflation. If this is the case, then in five years’ time the money would only buy what £9,057 would buy today.

We’ve allowed for the effects of inflation in the forecasts by adjusting the values downward by a fixed rate per year. This means you can compare the projected monthly income with your income today, and what that can buy in today’s prices.

For pension savings accounts we use an inflation rate of 2.5%, as set by the FRC.

For pension drawdown accounts we use an inflation rate of 2%, as set by the FCA.

In reality, inflation rates fluctuate. This will affect the value of your pension and any associated income and how much it will be able to buy in the future.

Charges affect how your savings may grow. We take the following charges into account when forecasting your pension values:

• Investment charges set by the company managing your funds (known as ongoing fund charges) and any rebates that reduce the ongoing fund charges you pay
• Dealing charges 
• Fidelity’s service fee
• Adviser and DFM (discretionary fund manager) fees
• We have not made allowances for other charges such as transaction fees, performance fees or the investor fee within the forecasts.

We have assumed the charges you pay will continue at the same rates.

Your charges may be higher or lower in the future.

You can find details of all the costs and charges you have incurred in the year up to 31 March in the summary of charges section.

We have assumed that any regular contributions you make will stay the same and continue until either the end date you have requested or stop at your retirement date.

You could increase or reduce the amount you are currently contributing or stop your regular contributions altogether.

For example, if you increase your contributions in line with rising wages, your savings might last longer than we have estimated.

We have assumed that any regular instructions to move money from a pension saving account into a drawdown account will stay the same and continue until either the end date you have requested or the pension savings account has run out of money.

You could increase or reduce the amount you are currently moving or stop your regular crystallisations.

We have assumed that any regular withdrawals will stay the same and continue until the drawdown account has run out of money.

You could increase or reduce the amount you are currently withdrawing or stop your withdrawals altogether.

For example, if you increase the income you withdraw in line with rising prices, your savings might not last as long as we have estimated here.

If you have other pension accounts, your adviser will be able to set up other withdrawals to provide you with an income from those savings.

Where you have chosen investments that pay income/ dividend distributions, we have assumed they are always reinvested into the fund they came from.

Distributions can be kept as cash within your account if you wish. Typically, this cash will be used to pay charges or fund withdrawals.

We have assumed you won’t make any additional ad-hoc ‘one-off’ withdrawals

You could choose to take ad-hoc withdrawals at any time in the future.

There are a number of different ways for you to generate a retirement income. Regulations require us to show you what happens if you use your pension savings to buy a guaranteed income for life (an annuity), which is one such income option.

To calculate the guaranteed income that your savings may generate, we have assumed:

•    Your income will be paid monthly (like a salary)
•    Your income will remain the same each year and not increase
•    You are a non-smoker and in good health
•    A five-year guaranteed period has been included - this guarantees income will be paid for a minimum of five years, even if you die during that time
•    It’s a single life policy (there is no income provision for a spouse or partner after your death).

Before taking any money from your pension you will need to speak to your adviser.

You could take money from your pension more flexibly - your adviser will be able to help with what is best for you.

If you did decide to buy an annuity, you could choose different options to these assumptions. The income figure shown would be higher or lower, depending on the options selected. For example, choosing a joint life annuity (to pay an income to a spouse or dependant after your death) would reduce the annuity income figure shown. Depending on your health/lifestyle, the income you may be able to get could be higher.

Also, the cost of buying an annuity will depend on the rates available at the time of purchase and may be different from the assumptions that we’ve made here.

We assume that when you take money from your pension, 25% will be available for you to take as a tax-free cash lump sum.

Most people can take 25% of their pension savings as a tax-free cash lump sum at the point they withdraw money from their pension. However, there are some circumstances where this is different:

• For pension savings accounts opened as a result of a disqualifying pension-sharing order, no tax-free cash is available.
• You have transferred in from older style pensions with some form of protection for tax-free cash, in which case you will be able to take a higher protected rate.
• You exceed the lump sum allowance, and so may not be entitled to tax-free cash on withdrawals over the lump sum allowance.

Your adviser will be able to tell you if any of these apply to you.