Scottish Widows Personal Investment Plan

sjw11

I'm trying to help my 76yr brother who has a "PIP" with Scottish Widows (Halifax)
It's performance has been poor at best, and he / we are considering cashing in or putting it somewhere else.
What sort of investment is this ? As far as I can see he is only allowed to take out 5% per year, which to me seems very restrictive given his age. That 5% may be the largest amount before it becomes taxable, which would make it sound like some sort of pension.
Any clues greatly appreciated 

EthicsGradient

There was a similar thread last year: Will this be a 'chargeable event' and is there any way of avoiding it? — MoneySavingExpert Forum

Scottish Widows & Halifax Personal Investment Plan | Scottish Widows

Not a "pension"; perhaps closer to an "investment bond" - but Scottish Widows does those too, so there is some difference
https://www.scottishwidows.co.uk/investments/options/fib-fob.html
(perhaps the difference is the "Plan" allows extra investment, when the bond is a one-off payment)
Yes, taking out more than 5% a year (the "tax deferred allowance per year") may be a "chargeable event" which may be taxable. Most talk of this is about investment (or insurance) bonds.

dunstonh

It's performance has been poor at best, 

It probably hasn't.   Many of these ex Halifax plans are either in their cautious managed or wholly in corporate bonds.   Whilst short term recent performance has been poor due to the unwinding of the consequences of the credit crunch, they have still beaten cash over the long term.  These Halifax products are old and likely to have been held for the long term.

What sort of investment is this ?

 an onshore investment bond (single premium, whole of life assurance).  

 As far as I can see he is only allowed to take out 5% per year, which to me seems very restrictive given his age. 

the investment bond, has an annual tax deferred allowance of 5%.   However, that is not restriction and may not be an issue at all depending on his overall tax position.

. That 5% may be the largest amount before it becomes taxable, which would make it sound like some sort of pension.

No its not a pension.  A pension would have been better due to tax reliefs and tax free growth.   The onshore investment bond he appears to have has no tax relief and suffers internal taxation that offsets against basic rate tax.