At a glance
Optional tax-free cash lump sum of up to 25% of your transfer value
All savings go to a spouse or dependent on death before age 75
You'll need to make sure your money lasts as long as you need it to
Read
more about drawdown
on the MoneyHelper website
By investing your retirement savings into a Drawdown arrangement you’ll have the flexibility to withdraw taxable cash, as and when you need it, throughout retirement.
However, you’ll be responsible for managing your savings, including choosing which funds to invest in.
The Plan doesn’t offer Drawdown directly. So if you want to use Drawdown you will need to transfer into a pension arrangement which does offer this. You could choose to move to LifeSight, which the Trustee can put you in contact with as a way of accessing a Drawdown option, or you could choose to find your own Drawdown arrangement to meet your needs as LifeSight may not be the most appropriate option for everyone. There are many different ones available. Once you start to withdraw any taxable income from your Drawdown account, the amount you (and your employer) can save into a defined contribution pension in future, without incurring a tax charge, reduces to £4,000 a year. So, if you are planning to save into a pension in future you’ll need to take this into account.
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At a glance
Optional tax-free cash lump sum of up to 25% of your benefits
Select the level of benefits and cover you need to match your priorities
You'll need to shop around to get the best deal.
Take a look at MoneyHelper’s annuity comparison tool to search the market
By buying an annuity, you’re able to tailor a regular, guaranteed retirement income to suit your circumstances.
For example, you’ll be able to decide whether you want to include an income for your spouse or civil partner after you die and whether you want your income to increase over time or remain level. You may also be able to get a higher income if you are in poor health or are a smoker.
Buying an annuity is a bit like buying car insurance – different companies offer different rates. So you may be able to get a higher income by shopping around. This is often referred to as an ‘Open Market Option’. You can shop around yourself, or you can use an annuity comparison service. The Trustee has appointed HUB Financial Solutions to provide a comparison service for members of the Plan for those who wish to use it. You can also choose to use another annuity broking service or purchase an annuity yourself, using publicly available tools.
Once you have bought an annuity, you can’t change the shape of it or change the provider, so it’s worth taking the time to choose the right one.
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At a glance
Take all of your benefits as a cash lump sum
You'll be taxed on 75% of the amount you take, possibly at a higher level than you're used to
No guaranteed income for your retirement
Up to 25% of your lump sum can be paid tax-free (up to certain limits, please refer to the LTA information on the government website).
Once you take a taxable cash lump sum, (unless it’s a ‘Small Lump Sum’) the amount you and your employer can save into a defined contribution pension in future, without incurring a tax charge, reduces to £4,000 a year. So if you are planning to save into a pension in future you’ll need to take this into account.
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