At retirement you use the value of your Account to provide you with an income and/or cash sums.

Retirement can be anytime between age 55 and 75 under current legislation and you do not need to stop working to draw your benefits. The minimum age at which you can start taking your benefits will increase to age 57 in 2028.

Having spent years building up your Account it is vital to understand the options available when starting to take your benefits. Further, if you are invested in a Retirement Pathway or in Self Select you need to think about how you will draw your benefits in advance of your retirement as this should impact the Retirement Pathway you select.

Since April 2015, you have more choices about how you take your benefits. Your retirement options will be:

Drawdown

 You can take as much income as you want, whenever you want. Either:

• 25% of each payment will be tax free and the rest taxed at your marginal rate of income tax.
• Or you can take 25% (up to a maximum of £268,275) of your Account as cash on a tax free basis before taking the remainder as income (in this case the income will all be taxed).

Annuity

You can take up to 25% (up to a maximum of £268,275) of your Account tax free and use the remainder to buy an annuity. (An annuity which provides you with a guaranteed income either for life or a fixed term that will be taxed as income.)

You have lots of options in terms of how the annuity can be set up and you should shop around to ensure you get the best annuity deal for your circumstances.

Cash

You can take all of your benefits from the Plan as cash in one go. The first 25% (up to a maximum of £268,275) will be taxed at your marginal rate. The amount of cash you take may itself increase your marginal tax rate and, importantly, if you choose to take all your benefits as a cash sum, you will need to find another source of income to fund your retirement.

You can use all or some of your fund for the above options and/or use a mixture of the options above. Please note that you will need to transfer your Account to a suitable arrangement outside the Plan in order to access some of the benefit options available.

Your retirement benefits and tax

It is important to understand all your options and the implications, particularly around taxation. It is strongly recommended that you take financial advice at the right time. Please note that you can take your benefits in full and still continue in the Plan. However, please note that in certain circumstances this will trigger the ‘Money Purchase Annual Allowance’.