Planning to retire
Options at retirement
There are a number of decisions that you will need to take when you retire and it might be worth considering these now.
Decision 1 - Take your pension?
Do you want to take your pension when you retire from the Company or do you want to defer it until a later date?
Decision 2 - Do you want tax free cash?
You will have the option to take your benefits as a full pension or you can give up part of your pension for a tax free cash lump sum on retirement (also called a "Pension Commencement Lump Sum"). You will be able to take up to 25% of the value of your total pension as a lump sum.
Decision 3 - Do you want to give up pension for extra supplement or give up supplement for extra pension?
The Supplement Guide explains the options available to you.
Decision 4 - How will you spend your Additional Voluntary Contributions (AVCs)?
You will have three options at retirement:
- Take your AVCs as part of your lump sum. You can take up to 25% of your pension (up to £50,000) tax free. You may need to pay tax on any amount taken in excess of this;
- Use your AVCs to provide an income through an annuity or drawdown; or
- Leave your AVCs and take them at a later date (called "deferring your AVCs").