Planning for retirement

Getting ready to retire is an exciting time, but there’s also lots to think about and plan for. When you retire, you have some choices about the way you take your benefits from the DB Section. 

Get a pension quote

You should begin by finding out how much your Scheme pension will be. You can request a pension quote from Trafalgar House, by logging into your personal account via My Work Pension. They’ll send you a retirement pack which includes a personalised statement of your retirement benefits, together with your options.

Consider your options

If you wish to, you can take up to 25% of the total value of your pension benefits as a tax-free cash lump sum (based on current tax rules). You can then use the remainder to provide a taxable income for your retirement. The options available to you when you retire are:

• Take your full annual Scheme pension
  This is paid to you monthly for the rest of your life.
• Take a tax-free cash lump sum and a reduced Scheme pension
  You can give up part of your pension (up to 25%) in exchange for a tax-free cash lump sum. Your monthly pension payments would then be lower than if you take your pension in full.
• Decide how to take any DB additional voluntary contributions (AVCs), if you have them
  You can include your AVCs (either Group or Deposit AVCs) as part of your Scheme benefits, put them towards your cash lump sum, or take them separately from the Scheme and use them to buy an annuity or take a lump sum with another provider. Please remember that any benefits you take outside of your tax-free cash allowance are subject to income tax at your marginal rate. Depending on your income for the year, this may push you into a higher tax band.
• Take a cash equivalent transfer value (CETV) 
  If you want to access your benefits more flexibly, you’ll need to transfer the value of your Scheme benefits to a defined contribution (DC) pension arrangement with another provider. If you take a transfer, you’ll leave the Scheme and no longer be a member. If your CETV is higher than £30,000, you’ll need to take independent financial advice from an approved pensions adviser before a transfer can go ahead.

Advice and guidance

Your benefits in the DB Section provide valuable security for your future, and it’s a good idea to take financial advice when thinking about your retirement options.

You can speak to an NFU Mutual Staff Financial Adviser or an independent financial adviser (IFA) to help you decide what’s best for your circumstances.

You can also find more information about pensions and retirement from the MoneyHelper, which is the government’s free financial guidance service.