Planning your retirement
It’s worth starting your retirement planning early. Many people will wait until a few years before retirement to start thinking about it seriously, but we recommend starting much sooner. After all, you may be living in retirement for two or three decades.
When you come to retire, you'll have some choices about how you take your benefits. You can choose to take a pension from the Scheme, which is a guaranteed income for life, or you can choose to transfer your benefits to an alternative arrangement. This could be an annuity, which is also a guaranteed income, or to a personal pension. In a personal pension, you could either choose to take the value of your benefits as a single lump sum, or you could invest them and take out your money as and when you need it.
If you haven't taken your Scheme pension and your retirement benefits are worth at least £100,000, you may be eligible to take a partial transfer. This means that you could use some of your benefits to take a pension from the Scheme and some to access the flexible retirement options from a personal pension or annuity. There's more information about this on the IFA advice page.
No matter what you decide to do, you'll be able to take up to 25% of your benefits as a tax-free cash lump sum. The remainder will be taxed as income, regardless of how you choose to take it.
The Scheme has provided access to a financial adviser, Origen, to help you understand your options and make the right decision for you. There's more about this on the IFA advice page. It's important that you consider taking financial advice when you're deciding what to do with your benefits, as you generally cannot change your mind once your benefits have been paid.
The below video from Origen gives you some more detail about your options from the Scheme.
Retirement options video
Retirement planning will look different for everyone but here are some actions we’d recommend.
- Make sure you keep in touch with all your different pension providers so you don’t lose track of a pension. It can be useful to sign up for digital communications and provide a personal email address. If you think you may have lost track of a pension, you can use the Pension Tracing Service to help find it.
- As you get closer to retirement, make sure you know what you’re on track to receive from each pension. Don’t forget to include the State Pension!
- Find out when you can retire from your various pensions, again including the State Pension. It may not be the same age for all of them.
- Put together a retirement budget, taking into account ALL forms of income you might have when you stop work and any outgoings you expect to have.