My retirement
When you retire, we will pay you a pension for life, plus a one-off tax-free lump sum.
You can choose to give up pension for an extra lump sum.
Your pension choices
When you reach age 55 you can take your pension if you want to. But be careful, the earlier you take it the longer you will need to make it last.
Age 55 is the current minimum age the Government allow people to access a pension. This will increase to age 57 from April 2028.
Remember, you must give up your current post before you can access your pension.
Pension for life
We will pay this to you on the last working day of every month, for your lifetime.
Your pension is taxed as income through PAYE. We deal with this tax for you, but we rely on HMRC to tell us your correct tax code. This could mean your pension is taxed incorrectly for the first few months.
We increase your pension every April, in line with the Retail Prices Index (RPI), up to a limit.
- Any pension you earned before 31 December 2007 increases by RPI up to 5%
- Any pension earned after this increases by RPI up to 3.5%.
Early retirement
The Normal Pension Age (NPA) increased from 65 to 68 from 1 January 2011. This change was agreed by Synod.
If you take your pension before your Normal Pension Age (NPA) we need to reduce it as we are likely to pay it for longer. The earlier you take your pension, the less it will be.
Late retirement
If you are still active and you take your pension after your NPA, you continue to earn extra pension as you usually do.
You usually need to stop stipendiary ministry at age 70, unless you have permission from your Bishop. At this point, you can access your pension.
If you have already left CEFPS and you take it after your NPA we will increase, as we might pay it for a shorter period.
Tax-free cash
We will pay you an automatic tax-free lump sum. This is usually three times your pension, but can be slightly different if you retire early or late.
You can give up part of your pension for an extra tax-free lump sum. If you choose this, your pension will be less.
If you have saved Additional Voluntary Contributions you can put this towards your extra tax-free lump sum. This means you can give up less, or no pension to reach your tax-free limit.
Pension for a spouse or civil partner
We will continue to pay two-thirds of your pension to your spouse or civil partner when you die. We will pay this to them for their lifetime.
When you retire, if you decide to give up part of your pension for an extra tax-free lump sum, we will still pay two-thirds of your original pension.
Reaching maximum pensionable service
Once you reach your maximum pensionable service, you will not earn extra pension, but your pension will still increase each year in line with the National Minimum Stipend.
Taking my pension and later taking remunerated to work
Providing you have not retired on health grounds, you can take up remunerated work in retirement and this does not affect your pension. Check which tax bracket your pensions and any remunerated work puts you in.
If you take up a stipendiary post after you access your CEFPS pension, you will be enrolled in NEST and earn extra pension in this pension scheme for this period of service.
Continuing ministry until age 70
The Clergy Age Limit Measure means you must vacate your office at 70 unless you are a Dean or Suffragan Bishop, or on a contract of employment. You can continue after 70 on a temporary basis, with the agreement of your Bishop. You will still earn pension until you retire.
STEP 1:
Tell your Responsible Body or Diocese your retirement date. They usually ask for at least 3 months’ notice.
STEP 2:
Tell us the date you would like to retire. Telling us late can delay payments.
STEP 3:
We will send you your application form with your retirement choices.
STEP 4:
Complete and send your application form back to us with any certificates.
STEP 5:
If you are in stipendiary service, we check your retirement date with your Responsible Body or Diocese.
STEP 6:
We pay your lump sum shortly after you retire. Your pension will start at the end of the month.
My AVCs when I retire
When you retire and you are ready to take your AVCs, you have 2 choices:
- Take your AVCs at the same time as your Clergy pension, or,
- Transfer your AVCs to another pension provider.
Option 1 – taking my AVCs at the same time as my Clergy pension
HMRC rules allow you to take part of your AVCs as tax-free cash. If you take your AVCs at the same time as your Clergy pension we are likely to be able to pay you most, if not all your AVCs back to you tax-free. This could help with moving costs, or you could put it towards the retirement you are planning for.
This is the most popular way of taking AVCs at retirement.
If we can't pay all your AVcs back to you tax-free, if there is only a small amount left over as excess, we can pay this to you as a taxed lump sum. This can often be easier to manage than transferring the excess to another pension provider.
If you take your AVCs at a different time to your Clergy pension you can only take 25% of your AVCs as tax-free cash.
Option 2 – transfer my AVCs to another provider
If your AVCs go over your tax-free limit, you can move the amount we cannot pay you tax-free to another pension provider and spread payments over multiple tax years. This way, you will pay less tax.
If you do this you could then use the excess in a number of ways, including:
- Leaving it invested to give it more time to grow and accessing the money later
- Use it to buy a guaranteed income called an annuity
- Take chunks from it over a few years until the money runs out
Ill health retirement
Facing the possibility of stopping work due to your health can be difficult. To help with life after work, you can apply to take your pension early.
Do I qualify for an ill-health pension?
To approve ill-health pensions, we need to assess whether you meet the definition of ‘incapacity’, set by General Synod. We do not have discretion over the definition.
The definition is ‘You have a medical condition that prevents you from performing the duties of your office, and this is likely to be permanent’.
How am I assessed against the definition of incapacity?
To assess you, we need to review:
- Relevant medical reports from your GP or medical specialist
- Your occupational health report
- Supporting evidence from your Bishop or Archdeacon
Gathering this information is the most time-consuming part of the process. You can help speed this part up by asking your GP to send us your reports as quickly as they can.
If your situation is not straightforward, we might need help from our independent medical advisers. They might need to talk to your GP or medical specialist, or they may need to meet you to carry out a short medical examination. They will only do this if they need more information to give their opinion. The examination should be local to you.
What if I cannot fill out my forms?
If you are unable to fill out your forms, someone can fill these out for you. The person needs to have a Lasting Power of Attorney for you. When you return the forms, please remember to include a copy of the Power of Attorney.
What if there are medical fees?
If we need to ask your GP or medical specialist to send us medical reports or send us extra information on your condition, they may charge for this. We will pay all fees.
How do I pick a retirement date?
If we approve your ill-health pension, start discussing a retirement date with your Archdeacon, Bishop, Responsible Body or employer.
Your retirement date must be within 6 months of the date we approve your ill-health pension, otherwise you need to apply again. We can extend this if you are waiting for retirement housing with the Pensions Board. Once we have confirmed your retirement, we will send your final pension and lump sum figures, plus a few extra forms.
What can I do if my application is unsuccessful?
If your application does not meet the definition of incapacity, we cannot approve an ill-health pension. If this happens, you can:
- send us further medical evidence to support your application
- appeal to us to review our decision - we have a process you can follow
- appeal to the Pensions Ombudsman to review our decision
If we do not approve your application and your health deteriorates, you can apply again.