Take your…
Benefits from the Aliaxis DB Scheme
At a glance…
The Pensions Regulator believes, for most members, it’s likely in their best financial interests to take a pension from the Scheme. If you choose to stay in the Aliaxis DB Scheme, you’ll have:
- A pension at retirement based on your salary and service
- Tax-free cash – the option to exchange part of your Scheme benefits for a tax-free cash lump sum (usually up to 25% of your total pension value)
- Annual increases to your pension, in line with the Scheme Rules
- A pension for your dependants (your spouse, civil partner, partner and/or children) on your death, based on a percentage of your pension, in line with the Scheme Rules
- A lump sum payable to your dependants if you die soon after retirement, in line with the Scheme Rules
How long might you live?
People are living longer. Improved healthcare, working conditions and a reduction in smoking rates have all contributed to increasing life expectancy from generation to generation.
Understanding how long you might live is an important part of planning for retirement, especially if you’re considering the drawdown option, as you’ll need to make sure your money lasts as long as you need it to.
The National average for a typical 65-year-old, in good health, as at July 2024 is shown on the right.
So, if you are retiring at age 65, you could live for at least 20 years after that (based on data from the Office of National Statistics). That’s 20 years of paying for the things you’ll need and want.
But we’re not all ‘typical’, it’s possible you could live a shorter time or much longer than this. In fact, 1 in 4 65-year-old retiring now could live in to their 90s and 1 in 33 could live to 100, so they’d need to manage their money wisely!
Sally’s choice
For Sally, a pension that could provide a regular income for life for her, and her husband Jim if she died first, and which provided protection against future increases in the costs of living, gave her the peace-of-mind she needed. So, she decided not to transfer out of the Scheme and took the Scheme pension.
Sally’s choice is just an example and does not suggest a particular option that you should choose yourself. Please look at all of the options available to you and consider seeking independent financial advice before making any decisions about your own benefits.
Why this option might suit you
Here is a list of characteristics that this option provides or doesn’t provide. Have a look through and see if these characteristics suit your personal circumstances. For example, is the reassurance of a regular income for the rest of your life a priority or would you rather withdraw money as and when you need to?
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The reassurance of a regular income for life | ✔ YES |
Taking your Aliaxis Pension gives you the reassurance of a regular income paid, normally monthly, to you for as long as you live, a bit like your salary is now. This is particularly useful if:
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Pension increases to protect against inflation | ✔ YES | Parts of your Aliaxis Pension increase in value each year to protect you against increases in the cost of living (inflation). By this we mean as the cost of things like fuel, bread, milk etc. go up, so does your pension income. |
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A pension for my spouse/civil partner/qualifying dependent on my death | ✔ YES | Your Aliaxis Pension will provide an income to your spouse/civil partner/qualifying dependent when you die, giving additional reassurance for you and your loved ones. |
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Leaving an “inheritance” | X NO |
You will receive a pension for your spouse/civil partner/qualifying dependent as outlined above. If you die within the first five years of retirement, a lump sum will be paid equivalent to the remaining pension instalments which would have been paid for those five years (without increases). |
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Something easy to manage | ✔ YES | Super easy, you don’t have to do anything, your pension will be paid to you regularly, just like your salary is now. |
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Money to use now | ✔ YES | In exchange for a reduced regular income from your Aliaxis Pension, you can typically take up to 25% of the value of your pension as a tax-free cash lump sum when you retire. |
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The flexibility to change my income when I like / need | X NO |
There is no flexibility to change your income from the Aliaxis Pension once you retire – only the annual increases change the amount you receive. |
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The ability to invest my money myself | X NO |
There is no option to manage any investments. |
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Suitable if I expect to live a long time | ✔ YES | Definitely. Your Aliaxis Pension will be paid to you for as long as you live.
It’s worth noting that on average (based on national figures from the Office for National Statistics) we’ll live until our mid-80s, however there’s a 1 in 4 chance you’ll live in to your 90s and 3 in every hundred people retiring now will live to be 100 years old. |
Tax
Tax-free cash lump sum
- You can take some of your Aliaxis DB Scheme benefits as tax-free cash (usually up to 25% of the benefit value)
- The amount of the tax-free cash lump sum depends on the terms offered by the Aliaxis DB Scheme and is subject to the Lump Sum Allowance (see Tax & State benefits section).
Income (subject to tax)
- Your annual income will be taxed at your marginal rate of income tax for that year (20%, 40% or 45%)
- As your pension income is stable, you can expect to pay a similar level of tax each year (subject to any other income you have).