Your questions answered
Here you can find the answers to frequently asked questions about retirement and the options available to you at retirement. We may add to these from time-to-time so it is worth checking back. If your question is not answered, you might wish to call the Scheme’s administrators, Broadstone, on 0117 937 8700 or by email at aliaxis@broadstone.co.uk.
General retirement-related questions
Can I access my pension savings now even if I am still working or haven’t retired yet?
Yes, you can access your pension savings from age 55, regardless of whether or not you are still working.
However, you should be aware that once you have received any taxable cash from Drawdown or a taxable cash lump sum (other than from a small pot), this will restrict the amount of future pension savings that you or your employer can make on your behalf into a defined contribution pension without incurring a tax charge. This is known as the Money Purchase Annual Allowance (MPAA).
How is my pension income taxed?
You can usually take up to 25% of your pension savings tax-free. However, any pension income above this (whether from an annuity, drawdown or taxable cash) is taxed in the same way as earnings. However, unlike earnings you do not make National Insurance contributions on your pension income. You will pay tax at your marginal tax rate, which will depend on the amount of income you receive from all sources. Please note if you are currently employed and receiving a salary, taking your pension could potentially mean that you move up to a higher tax band. In addition, if you decide to take all of your Aliaxis DB Scheme savings as a cash lump sum in one go, this could mean that you end up paying more tax, as you may move up to a higher tax band.
What is the Annual Allowance?
The Annual Allowance applies to all savings you make into a registered pension arrangement, which restricts the amount that you (and your employer) can save each tax year without incurring a tax charge. The standard Annual Allowance for the current tax year can be found here (please note this reduces if you have a ‘high’ income).
A separate Money Purchase Annual Allowance will apply to you, irrespective of your income, if you access your pension savings flexibly and take a taxable income. This includes taking taxable income from a drawdown fund, as well as the taxable part of a cash lump sum. It doesn’t apply if you buy an annuity. Once the Money Purchase Annual Allowance is triggered, this restricts the amount that you (and your employer) can save into a money purchase (defined contribution) pension arrangement each tax year without incurring a tax charge. The Money Purchase Annual Allowance for the current tax year can be found here.
Therefore, if you are planning to continue working and/or saving into a pension arrangement after taking your pension savings, you should take the Money Purchase Annual Allowance into account when deciding which option to take.
My Scheme pension savings are small. What can I do with them?
If your Aliaxis DB Scheme savings are less than £10,000 you may be able to take this as a ‘small pot’ lump sum. This means that you can take your entire Scheme pension savings as cash. Up to 25% of the lump sum would be tax-free, with tax paid on the remainder. Taking a cash lump sum in this way would not trigger the Money Purchase Annual Allowance; you would need to let the Scheme administrators know that you are taking a ‘small pot’ lump sum rather than an Uncrystallised Funds Pension Lump Sum (UFPLS).
If you have pension savings in more than one plan, and your total savings are worth less than £30,000, you may also be able to take all of your pension savings as a one-off lump sum. Please contact the Scheme’s administrators if you believe this could be the case for you.
What State benefits will I receive in addition to my Scheme pension savings?
In addition to any pension savings you have built up in the Scheme, you will also receive a State Pension payable from your State Pension Age. Your State Pension Age will depend on when you were born.
What if I live overseas or move overseas?
You can still take your pension from the Aliaxis DB Scheme if you live overseas. Your pension will normally be paid by bank transfer and can be paid to a non-UK bank if you wish.
The pension will be calculated in Sterling, so if you wish your pension to be paid in local currency, there may be a cost to do this from the bank. If you are resident for tax purposes in a country outside the UK, you will need to consider any local tax issues which may arise due to your new income. Ordinarily, UK tax will be charged on this pension at the time it is paid. However, you will still normally be entitled to a personal allowance to set against this or any other UK income. Wren Sterling is not able to advise you on any local tax consequences or offer guidance on steps you might take to reduce any tax liability.
You may also be able to transfer your benefits to an overseas approved pension arrangement provided that you have taken advice from a UK registered financial adviser if your transfer value is more than £30,000.
What happens if I change my mind?
If you respond to say that you wish to take your early retirement pension from the Scheme, you have a cooling off period of two weeks from the date you sign the acceptance form. If you decide within this two week period that you no longer wish to retire early please contact the Scheme’s administration team at Broadstone, on 0117 937 8700 or by email at aliaxis@broadstone.co.uk, as quickly as possible.
Some annuity rates quoted by insurance companies are only guaranteed for a short period of time. This will usually be two weeks but the financial adviser will confirm the exact period for the insurance company you have chosen and how this interacts with the cooling off period.
Who regulates UK pension schemes?
The Pensions Regulator is the UK supervisory body for occupational pension schemes. The regulator is responsible for monitoring the running of occupational pension schemes to ensure the protection of member benefits. You can contact the Regulator on 0845 600 0707 or go to thepensionsregulator.gov.uk
What if something goes wrong or I have a complaint?
We hope that the retirement process runs smoothly for you. However, if you do have an issue or complaint, please contact the Scheme’s administrators, Broadstone, on 0117 937 8700 or by email at aliaxis@broadstone.co.uk, and they will let you know how to take the matter further.
If you are unable to resolve your issue through the Scheme’s administrators, having followed the Trustee’s dispute resolution procedure where relevant, then you can contact the MoneyHelper service by calling 01159 659 570. They should be able to assist you and answer any questions you may have. You could also go to their website at moneyhelper.org.uk
If your concern still cannot be satisfactorily resolved, you can then refer it to the Pensions Ombudsman. The Pensions Ombudsman is an impartial organisation set up to investigate complaints about how a pension scheme is run.
Contact the Pensions Ombudsman at:
Pensions Ombudsman Service
10 South Colonnade
Canary Wharf
E14 4PU
Tel: 0800 917 4487
Email: enquiries@pensions-ombudsman.org.uk
Website: http://pensions-ombudsman.org.uk
You can also submit a complaint form online:
pensions-ombudsman.org.uk/our-service/make-a-complaint
If I were to transfer, do I need to be careful where I transfer to?
You should be aware that individuals are being approached by “unregulated” providers suggesting that they transfer their pension benefits in exchange for seemingly tempting investment opportunities and/or cash. This type of offer could be a scam. You could lose most or all of your pension savings as a result of tax charges, scammers’ fees and losses on fake or unsuitable investments. See pension-scams.com or fca.org.uk/scamsmart for further information.
If you believe you have been approached with such an offer, contact Action Fraud on 0300 123 2040, actionfraud.police.uk/report_fraud
Retirement Options tool related questions
How do I use the Retirement Options tool?
Is my data secure?
We appreciate members’ concern around providing detailed personal data. The information you provide is not stored anywhere on our systems once you close the Retirement Options tool. We ask you to input the information in the tool and we only request relevant information. For more information please see the Data Privacy Policy.
Are the figures in the Retirement Options tool guaranteed?
No. In practice, if you choose to transfer your benefits out of the Scheme then the amount you will receive each year will depend on how your savings are invested and how these investments perform over time, or the annuity rates on offer at the time if you choose to purchase a pension in the future. A financial adviser can help to choose the right option for you.
What assumptions are used in the Retirement Options tool?
The tool can only give you an indication of your options so you shouldn’t rely on it alone to make any decision. It is based on the information that you input and the following assumptions:
- The tool assumes you’re ready to retire now
- The tool assumes you’re in good health
- The tool does not take into account the impact of any tax, in particular, income tax and the Lump Sum Allowance
- The tool does not take into account the impact of increases in the cost of living (inflation)
- The tool does not show how you might take your AVC account at retirement. For more information about the AVC account, please refer to your retirement quote
- The annual increases on your Scheme pension, shown in the graph view, are based on the Rules of the Scheme and in some cases, assumptions have been made where these increases are linked to inflation. The actual annual increases you receive each year are set in accordance with the Scheme Trust Deed and Rules.
The Retirement Options tool is not financial advice. You should discuss your specific circumstances with an FCA-Registered Financial Adviser before making a decision.
How up to date are these figures?
Please see your retirement quote letter for the date of your pension figures and your transfer value. For the illustration of a regular income, an assumption has been made regarding the annuity rates available to purchase in the open market. The rate used is updated monthly and is based upon annuity rates as provided by HUB Financial Solutions.
I have a technical problem using the Retirement Options tool – where do I get help?
Please contact the Scheme’s administrators, Broadstone, on0117 937 8700 or by email at aliaxis@broadstone.co.uk
I’ve looked at the Retirement Options tool and I want to make a decision – what do I do next?
Please see the Make your decision page.