Rothesay

Rothesay is a UK insurance company that pays defined benefit pensions. If your pension is now paid by Rothesay, it is because the scheme that used to pay it transferred its promises to Rothesay, and Rothesay is now responsible for paying your pension. Your Rothesay policy is Defined Benefit (DB)¹.

Rothesay Life Plc is authorised by the Financial Conduct Authority, with reference number 466067, and appears on the Bank of England's Prudential Regulation Authority list of UK insurers authorised to carry out contracts of insurance². The company is active on Companies House, company number 06127279, incorporated on 26 February 2007⁴.

What Rothesay does: paying defined benefit pensions as annuities

Rothesay's business is paying defined benefit pensions. A defined benefit pension is one where the amount you get is worked out from your salary and how long you worked for the employer, rather than from how much was paid in and how investments performed. These pensions are also known as "final salary" or "salary-related" pensions⁵.

When a scheme transfers its promises to an insurer, the insurer takes on the job of paying the pensions. Rothesay does this as an annuity: a regular income payable for life⁶. An annuity pays a regular guaranteed income for a set period or for life⁷. Rothesay does not pay pension contributions towards policyholders' pension benefits, and it does not need to produce a funding statement because it is a regulated insurance company¹.

If you are already receiving regular pension payments, you do not have the right to cash in your policy¹. That is a feature of defined benefit pensions generally, not a restriction Rothesay has added. If you are not yet receiving your pension, you have more options, which are set out below.

How Rothesay pension increases are worked out

Pension increases under a Rothesay policy follow the rules of the scheme that transferred to Rothesay, and those rules vary. Some pensions increase in line with inflation, some at a fixed rate, and some built up before April 1997 may not increase at all. The Pension Schemes Act 2026 introduces a new law that will allow inflationary increases, also known as indexation, on pension benefits built up before 6 April 1997⁸.

For context on how increases are set elsewhere, the basic State Pension increases every year by whichever is the highest of earnings growth in wages in Great Britain, CPI price growth in the UK, or 2.5 per cent⁹. Public service pensions in payment increased by 3.8 per cent from 6 April 2026, with pensions that began on or after 7 April 2025 increased by 3.8 per cent multiplied by A/12, where A is the number of complete months between the beginning date of the pension and 6 April 2026¹⁰. NHS Scotland pensions increased by 3.8 per cent from 6 April 2026¹².

Some scheme rules use different methods. One scheme rule states that if the increase in RPI in the year is more than 6 per cent, the rate of pension increase will be 6 per cent plus half the RPI increase above 6 per cent¹³. Another states that a pension built up from 1 April 2004 increases by the RPI Method¹³.

If you live abroad, the pension you get from an occupational scheme will increase each year, in line with the scheme rules and current legislation¹⁴.

Taking your pension: full pension, reduced pension and tax-free lump sum

When you reach the point where your Rothesay pension can be paid, you can usually choose between taking the full pension, taking a reduced pension with a tax-free lump sum, or in some cases taking a lump sum instead of a small pension. At the point your pension starts, you may take a tax-free cash lump sum¹⁵.

The tax-free lump sum is normally up to 25 per cent of your pension¹⁶. When you take a lump sum from your pension, 25 per cent is usually paid tax-free, as long as the total amount of tax-free cash taken is within the lump sum allowance, and the other 75 per cent counts as earnings for Income Tax¹⁷. If you take a lump sum from your Rothesay policy, in accordance with DB pensions legislation you will need to start receiving your regular pension payments once you take it¹.

If you have a life expectancy of less than a year, you can take up to 100 per cent of your pension fund as a tax-free lump sum¹⁸.

Taking a lump sum can affect means-tested benefits, because lump sums count as savings¹⁹. If you take a lump sum instead of receiving a small pension, called commuting the pension, you may overpay tax and be due a refund²⁰.

Taking small pensions as a one-off lump sum

If you are not receiving your pension yet and the value of your benefits is less than £30,000, you may have the option to take a one-off lump sum instead of a regular pension¹. This is known as trivial commutation. If the total value of all your pension pots is less than £30,000, you may be allowed to take this as a lump sum²¹.

Separately, you can take a whole pension pot worth up to £10,000 as a lump sum, tax free, from a personal or stakeholder pension²². Any occupational pension scheme where the value is £10,000 or less can also be taken as a small pot lump sum²⁰.

Trivial Commutation Lump Sum Death Benefits are one-off payments, not exceeding £30,000, that convert a person's entitlement to a small amount of pension income into a single lump sum²³.

Transferring your Rothesay pension to another scheme

As an alternative to taking your DB benefits directly from Rothesay, you can request a transfer of the value of your pension benefits, known as your transfer value, to another pension arrangement¹. You can transfer your UK pension pot to another registered UK pension scheme²⁴.

All transfer values have a 6-month guarantee period from the date of calculation¹. That is longer than the usual minimum: defined benefit transfer values are usually guaranteed for at least three months²⁵. You can request further transfer value quotes, but no more often than once every 12 months¹.

To transfer your pension, you usually need to check your current scheme allows transfers out, make sure you will not lose any benefits, decide which scheme to transfer into, check if you need to pay for financial advice, ask your current provider for a transfer value, and ask the new scheme to start the transfer²⁶.

Once a payment has been sent to another scheme on your behalf, the transfer cannot be reversed²⁷. Transfers of defined benefit pensions worth more than £30,000 normally require regulated financial advice before they can go ahead²⁶.

Where a transfer cannot go ahead

A transfer cannot go ahead if the receiving scheme will not accept it. Some providers do not accept transfers in at all. For example, NS&I states that it does not currently accept transfers from other providers into its Direct ISA²⁸.

A transfer also cannot go ahead if the receiving arrangement is not a registered UK pension scheme, or if the scheme rules do not permit transfers out. If you are transferring to an overseas arrangement, different rules apply and the transfer may not be possible.

If you are considering a transfer, the Financial Conduct Authority's guidance on pension transfers sets out the process and the checks involved²⁶. The Pensions Regulator also provides information on reporting concerns about your workplace pension scheme, including dishonesty or fraud, or significant concerns about how the scheme is being run²⁹.

When a Rothesay policyholder dies: what the family needs to do

When a policyholder dies, the family or executor needs to contact Rothesay to let it know and to find out what happens next. Where a lender knows or becomes aware that a consumer is deceased, it must take all reasonable steps to communicate instead with a personal representative of the consumer's estate or the beneficiaries of the consumer's estate³⁰.

In Scotland, there are four steps to sorting out an estate: valuing the property and possessions, paying debts due from the estate, paying inheritance tax and filling in tax forms, and applying for confirmation³¹.

If you are dealing with an estate and need help, Citizens Advice Scotland provides guidance on dealing with an estate after death³¹. If you are struggling with debt while dealing with an estate, free, confidential and independent advice is available from a debt adviser³².

Help for customers who need extra support

Rothesay provides support for customers who need extra help. For customers with a degenerative disease or illness such as Alzheimer's, dementia or cancer, it can provide information on relevant support groups³³. For customers with visual impairment or hearing loss, it can provide different communication formats on request, including Braille, large font and audio, and can accommodate support from a trusted person where possible, such as a power of attorney³³.

For customers going through bereavement, divorce or a serious accident, it can provide information on relevant support groups, such as Cruse bereavement, apply passwords to your account, and provide fraud and scam awareness details³³. For victims of assault, domestic violence or financial abuse, it can set up a safe word to be used when it calls you and when you call it³³.

Rothesay offers communications in Braille, large font, audio files and Sign Video³³. Its SignVideo partnership means British Sign Language users are a click away from a remote BSL interpreter³³. Relay UK helps people with hearing and speech difficulties communicate with anyone over the phone, using the national relay service, and an app is available to download³³.

If you need a family member or friend to speak to Rothesay on your behalf, you can complete a Family and Friends Letter of Authority³³. If you have a Power of Attorney, you can send the details so they can be recorded on your file, enabling the attorney to be spoken to³³. Any friend or family member can become an appointee³⁴.

Complaints: how Rothesay handles them and where to go next

If you are unhappy with how Rothesay has handled something, the first step is to complain to it³⁵. If you remain dissatisfied after Rothesay has considered your complaint, you can take it to the Financial Ombudsman Service. Your client can bring their complaint directly to the ombudsman or ask someone to talk on their behalf³⁶.

The Financial Ombudsman Service is free to use and independent. It can look at complaints about financial firms, including insurers.

If you owe money to HMRC and want to speak to someone about your debts, you can get free, confidential and independent advice from a debt adviser³².

How Rothesay protects you from scams and how your pension is secured

Rothesay states that any information you provide will be treated in confidence, and that it will always carry out full data protection checks before releasing your personal information, whatever format or channel is used³³.

Pension scams are a serious risk. The Pension Scams Action Group, led by The Pensions Regulator, is a multi-agency taskforce bringing together law enforcement, government and industry to tackle pension fraud³⁷. It works to improve public awareness of pension scams, enhance the intelligence picture, support enforcement and regulatory interventions, identify legislative and non-legislative actions, and support victims³⁸.

More than 650 organisations have signed the Pledge to Combat Pension Scams³⁹. The Pensions Regulator has assessed over 2,000 sites using an AI-enabled process to tackle pension scam websites, enabling the removal of 29 high-risk sites⁴⁰. The Stop! Think Fraud campaign provides advice on how to protect yourself from pension fraud³⁷.

If you have concerns about your workplace pension scheme, including dishonesty or fraud, or significant concerns about how the scheme is being run, you can report them to The Pensions Regulator²⁹. If your pension contributions are being persistently paid late into your pension scheme, you can also report this to The Pensions Regulator⁴¹.

Rothesay is subject to the Solvency II funding regime and is required to hold an amount of capital, known as the Solvency Capital Requirement¹. It appears on the Bank of England's Prudential Regulation Authority list of insurers incorporated in the UK authorised to carry out contracts of insurance³.