When you reach your selected retirement age you can choose how you receive your benefits. The Retirement Option Modeller will help you compare each of these options.
Use your Personal Account to buy an annuity that will provide you a guaranteed fixed income for the remainder of your life. This can also provide an income to your Spouse, Civil Partner/same sex spouse or Dependant(s) following your death.
You may take up to 25% of your Personal Account as a cash lump sum on retirement. This is normally tax-free.
Take up to 100% of the value of your Personal Account as a lump sum at retirement. 25% is normally tax-free with the remainder taxed as income.
You do not have to take your entire Personal Account as a single UFPLS. However, if you elect to only take a proportion of your Personal Account at retirement you will be required to transfer the remainder to another registered pension scheme or use it to purchase an annuity.
If you elect to take a UFPLS from the DC Section of the Scheme or any other pension arrangement you have, your Annual Allowance for the year in which you receive the lump sum (and for future years) will be replaced with a Money Purchase Annual Allowance.
You can also transfer your Personal Account to an appropriate drawdown policy. This option allows you to have full control over your pension savings. Once you have transferred your Personal Account to the drawdown policy, you can take your funds as either a single lump sum or series of lump sums, each made up of a taxable and non-taxable element (normally 25%).
You can normally select to retire at any age after you have reached age 55 (or age 50 if you joined the DC Section of the Scheme before 6 April 2006). You must take your retirement benefits on or before age 75.
If you are taken ill and unable to continue working you may be eligible to have your pension paid early on the grounds of ill-health. You will need to provide satisfactory medical evidence, in the opinion of the Trustee that you have become too ill to work.
This option may enable you to use the value of your Personal Account to fund ill-health retirement at any age.
If you require any further information or wish to apply for ill-health retirement, please contact your local HR team.
As a member of the DC Section of the Scheme it may be possible to take all of your benefits as a lump sum if your Personal Account is small enough.
To qualify you must:
Be aged at least 55 (or retiring at an earlier age because of ill-health) and
Your Personal Account must be valued at less than £10,000.
You have the option of flexible retirement which allows you to use your Personal Account to secure your pension income and continue to work for the Company. To qualify for a flexible retirement, you will need to:
Be aged at least 55 and have obtained the Company’s consent
Have at least £20,000 in your Personal Account and use at least £10,000 or 10% of your Personal Account for the provision of retirement benefits.
You will not be allowed to exercise this option more than once in any 12-month period. Your employment will be deemed as continuous for any State or employment benefits that are dependent on this fact.
To help you understand your options, the Government has set up a free and impartial service called Pension Wise.
This service is available free of charge to any member of the DC Section of the Scheme providing:
Guidance on your pension options and how to make the best use of your money
Information about tax when taking money from your pension and
Tips on getting the best deal, including how to compare financial products, get financial advice and avoid pension scams.
You can visit the website at www.pensionwise.gov.uk or call 0800 138 3944 to book either a face-to-face or telephone appointment for specialist guidance on what you can do with your pension pot.