You do not have to retire to access your income from the pension Scheme. You can continue to work, although the income from your pension will be taxable, as well as the salary you are earning. The options are different for deferred Defined Benefits, (now administered by Just Retirement Ltd) and deferred Defined Contribution members.
Deferred Defined Benefits
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.
Deferred Defined Contributions
You can ask to draw your Defined Contributions pension at any time between the ages of 55 and 75 (you may be able to access it earlier if you are seriously ill or incapacitated). Be careful if anyone offers to help you access your pension below age 55, this could be an activity known as 'pension liberation' which could lead to you paying high fees to them and a very high tax bill to HMRC.
Whenever you decide to start receiving your DC benefits, you have some flexibility to choose how you want to receive them. Your choices can be found below in the Scheme communication to members of June 2015:
BPS Members with only DC Pension Accrual
You will not know until you decide to take your pension how much your pension account is worth or what benefits it will buy. The final numbers depend on:
- how much you and your employer contributed to your pension account
- how well the investment funds that you have chosen perform
- the age at which you choose to take your pension (the younger you are, the less annual income you will receive)
- whether you opt to take a tax free lump sum as part of your benefit
- the options you choose at retirement (for example whether to purchase a dependant’s pension or to have your pension index linked to offer protection against future inflation)