Options at retirement age
When you reach your Selected Retirement Age you can choose how you receive your benefits from the following options.
Purchase an annuity
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.
If you require any further information or wish to apply to purchase an annuity, please contact the DC Section Administrator.
If you are considering purchasing an Annuity with some or all of your Personal Account you may wish to also read the Annuity Providers page.
Take an Uncrystallised Funds Pension Lump Sum (UFPLS)
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 or any other pension arrangement, 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.
If you require any further information or wish to apply to take a UFPLS, please contact the DC Section Administrator.
Flexi-access drawdown
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 non-taxable element (normally 25%) and taxable element.
If you require any further information or wish to apply for flexi-access drawdown, please contact the DC Section Administrator.
Small lump sum
As a member of the DC Section 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 at least age 55 (age 57 from 2028) or retiring at an earlier age because of ill-health; and
- Your Personal Account must be valued at less than £10,000.
If you require any further information or wish to apply to take all of your benefits as a lump sum, please contact the DC Section Administrator.
Flexible retirement
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 at least age 55 (age 57 from 2028) 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; and
- Leave at least £10,000 in your Personal Account.
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.
If you require any further information or wish to apply for flexible retirement, please contact the DC Section Administrator.
Helping you choose
The Retirement Options Modeller
We have created a modeller to help you compare the options available to you.
Try the Retirement Options Modeller.
Pension Wise – service from MoneyHelper
Pension Wise is a government service from MoneyHelper that offers free, impartial pensions guidance about your defined contribution pension options.
An appointment with Pension Wise is free and will help you understand what your overall financial situation will be when you retire.
It’ll talk you through your options to help you make the right decision. You’ll also find out about the other factors you need to consider when deciding on your options before retirement.