They can be taken as either a lump sum or income, but the options are determined by the scheme

There are no guarantees to the income or lump it will provide at retirement.

Lump Sum options:

• PCLS –
  • A tax free lump sum which is very unusual for it not to be available due to scheme rules or if the member has full used their LTA they can’t take a PCLS.
  • The maximum available is 25% of the fund or 25% of the LTA available, whichever is lower.
• UFPLS –
  • A lump taken from uncrystalised or unused funds.
  • The payment is usually 25% tax free with 75% taxed at income tax rates

Income Options:

• Scheme Pension –
  • The income is paid directly from scheme assets or by an insurance company selected by the scheme administrator.
  • A scheme may offer this option, but they first must offer a lifetime annuity.
• Lifetime annuity –
  • Income is paid by the insurance company the member has selected.
• Drawdown Pension –
  • Income is taken from the member’s fund directly known as an income withdrawal or via short term annuities.