My retirement
When you retire, we will pay you a pension for life.
You can give up pension for a tax-free lump sum, and/or a spouse or civil partner pension.
Choices we offer
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 allows people to access a pension. This will increase to age 57 from April 2028.
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.
Early retirement
If you take your pension before your Normal Pension Age (NPA) we reduce it as we are likely to pay it for longer.
Your NPA will be 60, 62, 65 or 68. If you are not sure what your NPA is, just ask and we can let you know. The earlier you take your pension, the less it will be.
Late retirement
If you take it after your NPA we will increase, it as we might pay it for a shorter period.
Tax-free cash
You can give up part of your pension for a tax-free cash sum. If you go for this, we will reduce your pension.
Think carefully whether this is the right choice for you.
Optional pension for a spouse or civil partner
You can give up part of your pension to provide a pension after your death to your spouse or civil partner.
We will only pay a pension to your surviving spouse or civil partner following your death in retirement if you choose this when you retire. You need to make this choice at retirement, you cannot change your mind later.
Choices with other providers
Most people are happy to stick with the choices we offer. Taking your pension from us can often be the best option, but transferring your pension can give you more freedom and flexibility over how you take your money.
How does a transfer work?
A pension transfer means giving up your pension in return for a sum of money, which is called a ‘transfer value’. Your transfer value could be a large amount of money which you could transfer to another registered pension scheme to then take as cash or invest.
While it is invested it could go up in value, but there is a risk it could go down in value too. Once you transfer your pension, there are lots of different ways you can use your money, and even leave it to loved ones.
Is transferring a good idea?
Transferring can be worth exploring, depending on your circumstances. Having more flexible ways to access your money can really help if you are in poor health and your life expectancy is limited, or you are single or have no dependents.
You might want to get your hands on more money up front and even leave money to your loved ones. But, there are risks to doing this. Transferring means, you will give up your pension and the guarantees and security that go with it, such as:
- a guaranteed pension that lasts as long as you live
- yearly increases in line with inflation, up to a cap
- the option of a tax-free lump sum when you retire
- the option of a pension for your spouse or civil partner after you die
Because of these guarantees, if your transfer value is more than £30,000 you must take professional financial advice first. To make it easy for you to get advice we have partnered with Ecclesiastical Financial Advisory Services (EFAS) who can give you the advice you need.
If you transfer your pension, you cannot transfer it back to us.
You can move your pension to another provider and leave it until you need it. With this option, your money will be invested so it can go up and down.
The earlier you take it the longer you will need to live off it, so only take it early if you can afford to do this.
The longer you leave it the more chance your pension will have to grow.
Your pension can be passed on tax-free if you die before age 75. After this, it is taxed as income.
You can take your whole pension in one go as cash. A quarter is tax free, and the rest is taxed as income.
This could push you into a higher tax bracket, which means you will pay more tax than you usually do for that tax-year.
Amount you'll get tax-free
You'll need to plan how to provide an income and make sure you have enough to last your lifetime, and whether you want to leave anything to someone when you die.
It's worth knowing what you will do with the money. If you leave it in the bank and inflation increases, it will reduce the spending power of your money.
Amount that is taxed
You can get a regular income that goes up or down. So, if you need more money in one year but less in another, you can easily plan for this.
Before you do this, you can take a quarter of your pension as a tax-free lump sum at the start. Your income after this is taxed.
As you get to pick how much you want and when you want it, your income is not guaranteed to last as long as you live. The more money you take out in the early years, the less is left for the future.
With this option, any money left when you die can pass on to your loved ones, in some cases tax-free.
Instead of a regular income, you can take cash lump sums until your money runs out. How much you take is up to you. If you want to take large amounts over a shorter period, you can easily do this.
A quarter of each amount you take is tax-free and the rest is taxed as income. In between taking money out the rest stays invested. This gives your money a chance to grow, but it can also go down.
With this option, any money left when you die can pass on to your loved ones.
A lifelong pension (also known as an annuity) provides you with an income that will last as long as you live. You can also get an income for a set number of years. If you want security instead of flexibility this is the option for you.
Before you buy an annuity, you can take a quarter of your pension tax-free. After this your pension will be taxed as income.
There are various types of annuity. The main features you can decide are how the pension will increase, whether you want to provide a pension for your husband, wife or civil partner when you die, and whether there is a minimum length your pension will be paid, for example 5 years.
If you smoke or have a medical condition, you may be able to get an ‘enhanced’ annuity.
Buying an annuity is a one-time, irreversible decision, but not one you necessarily need to make when you retire. You can move your pension into ‘drawdown’ first while you value financial flexibility and buy an annuity later in life when you value security of income more.
As you cannot change your mind once you have bought an annuity, and annuity prices vary significantly, shop around to make sure you get the best deal.
You don’t have to choose one option when deciding how to take money from your pension.
Mixing your options can give you flexibility to suit different needs at different times during your retirement.
For example, you could use one option at the beginning of your retirement – such as flexible retirement income. And you can use another option later – such as an annuity to get a guaranteed retirement income.
If you have a large pot, you might be able to split it to provide some guaranteed retirement income and leave some invested.
If you have more than one pension pot, you might choose different options for each pot.
You can also keep saving into a pension if you want, and get tax relief up to age 75.
How do I access my pension?
When you are ready to access your pension, get in touch with us and let us know the date you wish to take it.
We will send you the information and forms you need. We can then put your chosen option into action. It can take up to 3 months to set everything up, so once you know your retirement date, start speaking to us.
Taking my pension and carrying on working
If you are still working, you can take your pension and continue in employment. You do not have to wait until you stop working to take it. But, if you are thinking of taking your pension early, you will need to make it last longer.
If you are interested in this, think about which option suits you best. Most of the ways you can take your pension mean this is added to your income for the year. It is added to your salary and other income and is taxed depending on which tax band this puts you in.
If you take a larger amount from your pension while you are still earning, this can put you into a higher tax band, so a higher proportion of your pension will be taxed.
If you do take your pension and continue working, your employer still needs to contribute into a pension for you, as long as you still meet the automatic enrolment criteria.
If you take one pension, but you still need to save into another, we'll set you up with a new pension which you can take again later.
Before you do this, there can be a tax implication.
If you access your pension and save into another pension at the same time, you'll trigger a tax implication called the Money Purchase Annual Allowance (MPAA).
MPAA is the limit on how much you can save into one pension, while receiving money from another.
You'll trigger this if you access your pension in a flexible way, except if you buy a guaranteed income (an annuity).
If you trigger this, you can only save £10,000 a year into your new pension before paying tax. If you are likely to save more than £10,000 into your new pension, think carefully about this before going ahead.
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.
What should I do if my health is affecting my work? First, talk to your line manager and/or employer about your concerns. They will try and find ways of helping you continue your duties. They will usually refer you to an occupational health adviser who will offer advice and guidance on how your condition can be managed.
If you are over 55
If you are over 55 and your health is preventing you from working, you can access your pension as normal. If you are taking your pension before your Normal Pension Age, we need to reduce it for early payment.
The usual retirement options apply.
If you are under 55
If you are under 55, and you are permanently unable to work due to health problems, you might be able to access your pension early. We need to reduce it for early payment.
As you will be accessing your pension before age 55, the minumum age the Government allow people to access a pension, we need evidence of your condition. This is known as an ‘ill-health’ pension.
It can take time to approve ill-health pensions, often up to 6 months. Some cases are straightforward, but some are complex, and we might need independent medical advice.
We will try and keep you informed as much as we can throughout the process.
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 speak to you to carry out a short medical examination. They will only do this if they need more information to give their opinion. The examination will be over the telephone and at a time convenient for you.