Your retirement options

A cash lump sum

You can choose to take all of the money that you have saved in your Pension Account as one-off cash lump sum at retirement. The first 25% would be tax-free and the rest would be taxable as income.

If you want to choose this option, it’s important that you consider the amount of tax you would be liable for. The remaining amount would be combined with any other income you have earnt in that tax year, which could push you into a higher tax bracket. If you take your benefits in this way, no further benefits would be payable from the Scheme.

Purchase an annuity

When you retire, your Pension Account can be used to buy an annuity from an insurance company. In exchange for the value of your Pension Account, the insurance company will agree to pay to a guaranteed income for the rest of your life.

You will need to choose what type of annuity you buy, for example whether it will increase each year, and whether it will pay an income to your spouse or lump sum in the event of your death.

You can still take up to 25% of your Pension Account as a tax-free lump sum and the remainder of your Pension Account can then be used to buy the annuity.

The Trustee will make available to you the services of a company that specialises in selecting annuities across the open market to help you obtain quotations appropriate to your individual circumstances on retirement. You can also use your own financial adviser if you wish.

Flexible income or a series of lump sums

These options are not available through the Scheme so you would need to transfer your Pension Account to another approved pension arrangement to take either of these options. Once transferred, your money remains invested and you can either draw this as a flexible income or as a series of lump sums.

If you take the flexible income, you can take your 25% tax-free lump sum and then draw an income each year. Any income you draw will be taxable.

If you wish to take a series of lump sums, the first 25% of each lump sum will be tax-free with the remainder being taxable.

Advice and guidance

Whichever option you are considering, we recommend that you take financial advice from an approved adviser before making your decision. The Government has also launched a free guidance service for DC members who are over age 50. You can find more information at

If you are considering transferring your Pension Account to another arrangement, please read the information on how to spot a Pension Scam, please click here.