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Retirement options

Your savings in the Plan are flexible. You can use the money you’ve built up in your pension fund in the way that’s best for you.

Cash lump sum

You can usually take up to 25% of your savings as a tax-free cash lump sum (capped at £268,275), and then use the rest to provide a taxable retirement income through either flexible income drawdown, an annuity, cash or a combination of options.

Flexible income drawdown

Where you keep your savings invested and take out money as and when you want to.

You can transfer your pension fund to a drawdown provider of your choice. Compare their services to find the one that’s best for you.

The Plan offers a drawdown transfer arrangement with Legal & General. Find out more about the L&G Mastertrust Pension Access Scheme.

Annuity

Pays you a regular, guaranteed income for the rest of your life.

You can buy an annuity from an insurance company of your choice.

You can get different types of annuity, and you can shop around for the best deal, like you would for your home or car insurance.

Once you’ve bought an annuity, you can’t change your mind.

Cash

You can take all your pension fund as a one-off cash lump sum.

Remember, only the first 25% (capped at £268,275) is available to you tax free, and you’ll pay tax on the remaining amount. This is the only option that can be paid directly from the Plan.

A combination of the above

You don’t have to choose just one of these options. You can mix and match them to suit your circumstances.

For example, you might want to use drawdown and cash at the start of your retirement when your expenses might be higher, but then later buy an annuity, if you no longer want to manage your retirement income yourself. It’s completely flexible and up to you.

Making a choice

Each of these options has advantages and disadvantages, so it’s a good idea to consider each one carefully in relation to your own situation and get some guidance before making a final decision.

If you take a lump sum to begin your pension but then change your mind, please be aware that the tax consequences can’t be reversed. This means that your lump sum allowances will be reduced (even if you’re returning the lump sum to the Plan) and you may incur an unauthorised payment charge.

 

To make the process of transferring to a drawdown arrangement smoother for our members, the Plan offers an income drawdown transfer option with Legal & General.

The Trustee has checked the L&G Mastertrust Pension Access Scheme and selected it from a range of options.

It’s a defined contribution pension scheme, which, like the Plan, is managed by a board of trustees who are legally bound to look after your money. The difference is that you can take income drawdown directly from the L&G Mastertrust Pension Access Scheme.

How it works

You can choose for your pension fund to be transferred from the Plan and paid into the L&G Mastertrust Pension Access Scheme. As part of our arrangement with Legal & General, our Plan members are offered customised terms at a competitive rate.

This could be for you if you’re thinking about investing in a drawdown arrangement to access your Plan savings but don’t want to choose a different provider from the market.