Understanding your Retirement Options
Deciding what to do with your retirement income is important and you should think carefully about what is right for you.
We will write to you in advance of your 65th birthday to provide you with your retirement options.
You may however claim your benefits at any time from age 55 whether you leave your employer or not.
There are circumstances when you can take your retirement benefits earlier than age 55 (for example, if you are forced to retire due to ill-health or are terminally ill).
If you would like to take your benefits before your 65th birthday please contact us to request your options.
What options are available?
There are a number of options available to you depending on the size of your pension pot.
- Leave the pension pot untouched
You may decide to leave your pension pot invested and take it at a later date.
- Get a guaranteed income (an annual pension or annuity)
Choose a guaranteed income with the full amount - by buying an annual pension (an annuity) with an insurance company or
Choose a guaranteed income and a tax free lump sum - where the member can take up to 25% as a tax free lump sum and the rest is used to buy an annual pension with an insurance company.
- Take your whole pot as cash
25% of this will be tax free, the remaining 75% will be subject to income tax.
Members wishing to buy an annual pension may do so through the Scheme’s appointed provider, JLT Wealth Management, or alternatively appoint their own provider. This would involve transferring your fund to the provider. The provider will outline the types of annual pension available to you.
The Scheme does not offer flexible income (flexi-access drawdown or multiple lump sums) or the opportunity to mix pension options. If a member is interested in these options they can transfer their entire pension pot to another provider. The options available to members are kept under review by the Trustee.
Pension Wise is the Government’s free and impartial guidance service giving individuals information to help them make a decision on how to take their pension pot. Guidance can be accessed in a number of ways as detailed on the Pension Wise website.
Members should access this guidance and consider taking independent financial advice to help them decide which option is most suitable for them.
Remember, you do not need to decide on these options until you wish to take benefits and you should seek financial advice to determine the best option for you.
Members are warned that if they take a cash lump sum from their pension to invest somewhere else, or plan to take income drawdown, scammers may operate in these markets. Further details are available in the Pensions Regulator's member leaflet.
What happens after I claim my benefits?
If you remain in employment you will continue membership of the Scheme after claiming your benefits. This means that employer and employee pension contributions continue as normal. This enables you to build up another pension pot.
Please note that, based on our current understanding, when you come to retirement, if your entitlement to state benefits is subject to 'means testing', you may find that the income you receive from the Scheme could be offset against your entitlement to, or reduce the amount you receive from, certain social security benefits.