Special terms

Below is a list of the special terms used on this site, together with a definition of each.

Annual Management Charge (AMC)

Every investment fund carries an AMC to cover the running costs. The AMC applies per year to the total value of your investments in that fund. For example, an AMC of 0.32% on an annual investment worth £1,000 would attract a charge of £3.20 for that year.

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Annuity

A pension annuity is a product offered by insurance companies. In return for a sum of money from your pension account, the insurance company pays you a pension income for the rest of your life. Depending on the type of annuity you buy, they may also pay a pension to your partner or dependant after you die.

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Company

[Aon Solutions Limited and Aon UK Limited are both company sponsors of the ARP.]

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Income drawdown

Income drawdown is also known as drawdown or flexi-access drawdown. It’s a retirement option that allows you to draw an income from your pension savings, while continuing to invest the rest.

A drawdown arrangement provides more flexibility than buying an annuity but it means you have to manage it to ensure it lasts throughout your retirement. For example, you can usually change how much and how often you receive the income, depending on your needs. You don’t have to take the income regularly, and you can usually leave your pension savings untouched for as long as you like.

By continuing to invest the rest of your pension savings, you can benefit from any future investment growth. But its important to remember there’s no guarantee your investments will rise.

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Normal minimum pension age

This is the earliest age you can take your pension savings and lump sum from a registered pension scheme without a tax penalty. There is no normal minimum pension age if you retire through serious ill health.

  • Since 6 April 2010, the normal minimum pension age has been 55.
  • The government intends to increase this to age 57 from 2028.

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Protected pension age

Before 6 April 2006, some pension schemes gave members a right to take pensions and lump sums before the normal minimum pension age. 

This right was protected after April 2006, but benefits with these rights should be handled carefully to avoid losing the protected pension age.

Please ask the contact centre if you think this might apply to you and you want to find out more for instance, from age 50.

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Salary sacrifice

A way of making pension contributions that reduces your and Aon’s National Insurance costs.

Under this type of arrangement, Aon pays both your and their pension contributions for you, and your salary is reduced by an equivalent amount. 

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Target retirement age

This is the age you have selected to take your pension savings from. 

You can set your target retirement age by logging into your account via the 'My Account' page.

You can change your target retirement age at any time.

If you don’t select a target retirement age, we’ll assume you will retire at the Aon OnePlan’s default normal retirement age, which is 65.

If you have a protected pension age and would like to set your target retirement age to be less than the normal minimum pension age, please get in touch with the contact centre.

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Total Expense Ratio (TER)

Some investment funds attract expenses in addition to an AMC, for example, legal, audit and accounting fees. The TER is the AMC plus the value of any extra charges. The TER applies per year to the total value of your investments in that fund.

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