You will be contacted by the Scheme administrators approximately 6 months before you reach your normal retirement date or your target retirement age.
If you are thinking of retiring before you reach your normal retirement date or target retirement age, please contact the Scheme administrators three or four months before the date you have in mind. This will give sufficient time to prepare your pension calculation and for you to consider the figures. We understand that this is not always possible if you are retiring suddenly because of a change in your personal circumstances.
If you have Defined Benefits these have now been transferred to Just Retirement Ltd, ("Just"). Further information on the transition of DB plan benefits can be found here.
If you have not yet retired and have benefits in both the old Defined Benefits Plan and the new Defined Contributions Plan, there is currently an option to combine your benefits at retirement. This can be helpful if you wish to take part of your pension benefits as a tax-free cash lump sum. We have an agreement in place with Just to continue to offer this option. You will need to tell the Scheme administrators if you are interested in finding out whether it is possible to combine your benefits before they are paid to you.
If your benefits are not combined, or if you only belong to the Defined Contribution Plan, you may need to start thinking about potentially buying an Annuity from your Defined Contribution account, to provide you with an income when you retire. Before purchasing an Annuity it is wise to shop around to see the costs of different types of Annuity that the various providers can offer. You may want to think about buying an Annuity which incorporates a spouse's pension for example, or increases in line with inflation. If you have any long-term health condition such as diabetes, hypertension, asthma, etc, or if you have ever had a critical illness such as heart disease or cancer, you may be eligible for an Impaired Life Annuity which pays out an enhanced amount. Ask each provider to supply a quotation for the type of Annuity you are interested in, so that you can compare the figures for that type of Annuity from different providers.
Below is a link to the Which website which provides a good outline of Annuities and some of the alternatives available:
http://www.which.co.uk/money/retirement/guides/annuities-explained/
A possible alternative to buying an annuity is “income drawdown” up to your 75th birthday. This allows you to keep your money invested in your pension account and take out an income in the meantime. There is a maximum amount of income that you will be able to take depending on your age and fund value. Income drawdown is a high risk and complex financial arrangement.
You should obtain independent financial advice if you are thinking of retiring and are unsure of the best course of action in your particular circumstances.