Get ready to retire
Normal retirement from the Scheme is at age 65, although you can choose to retire earlier from age 55 (rising to age 57 in April 2028). If you retire early, between ages 55 and 59, your benefits will be reduced for early payment. In most cases, you can retire from age 60 without any reduction.
My Retirement Planner is a secure, online tool provided via Clarity from BW. It shows you a range of projected values for your Scheme pension depending on your personal circumstances and when you want to retire. We’ll send you an invitation to register when you’re within a year of your earliest retirement date (usually age 54). The My Retirement Planner guide provides more details.
YOUR OPTIONS AT RETIREMENT
When you retire, you can take your full Scheme pension in the usual way. Alternatively, you can choose from the following options:
Lump sum option
You can choose to exchange some of your pension for a tax-free cash lump sum of up to 25% of the value of your benefits. This is known as a Pension Commencement Lump Sum (PCLS) and, while not an issue for most people, the amount is capped by the Lump Sum Allowance at £268,275. If you’ve previously applied to HMRC for ‘pension protection’, your PCLS may be higher.
If you take a lump sum, the amount you receive will be worked out depending on your age at retirement. This is because the amount you’re exchanging for a lump sum is multiplied by a factor that varies according to age.
Taking a lump sum at retirement doesn’t affect the pension payable to your partner/dependant.
If you’ve been paying Money Purchase Additional Voluntary Contributions (MPAVCs), your MPAVC fund will first be used to provide all or part of your tax-free lump sum before giving up any pension.
Bridge the gap option
If you take your pension before State pension age (SPA), you could bridge the gap in your income by choosing to receive a larger pension from the Scheme up to your SPA, and a smaller one afterwards. This option is not available if you take ill-health early retirement.
You can find out more about this levelling option in the Bridge the Gap booklet.