Taking your benefits at retirement

If you’re approaching retirement, you might not realise that there are a few different ways you can take your Scheme benefits when the time comes.

Option 1 – Take a Trivial Commutation Lump Sum

Taking all of your pension as a one-off lump sum is called a Trivial Commutation. There are strict rules in place about who can trivially commute their pension and it is generally only available if the total value of your pension benefits from all the schemes you’re a member of is less than £30,000.

If you choose this option, 25% of your benefit will be paid to you tax free, and the rest will be taxed at your marginal rate of income tax.

Option 2 – Transfer your benefits out of the Scheme

You have the option to transfer your benefits out of the Scheme to another registered pension arrangement, if that’s something that will work best for you. Transferring might be useful if you would like to combine your pension savings in one place or if you would like more flexibility.

Option 3 – Start taking your benefits as a monthly pension

If you wish, you can start taking your Scheme pension any time after you turn 55 (rising to 57 from April 2028) and receive a monthly payment for the rest of your life. Once your pension has been put into payment, you usually can’t transfer it out of the Scheme. 

Please note that the Scheme rules require you to take your benefits before your 75th birthday.

Next steps

If you’re thinking about taking your benefits in the near future, you can request a retirement quote from the administration team at any time.

Although we are unable to give you advice about your pension, you can seek independent financial advice at any time with a professional who can discuss your options with you. To find an adviser local to you, visit www.vouchedfor.co.uk. For more general information and guidance about money and pensions, you can visit the government’s free financial guidance service, MoneyHelper, at www.moneyhelper.org.uk