You usually only retire once, so the process of retiring – the many choices you need to make and steps you need to take – may surprise you. If you’re getting ready to take your benefits, here’s a few things to know and do.

When you can take your benefits

Usually you can take your full pension benefits when you reach your normal retirement age for your scheme. For most members this is between age 60 and 65, but it’s not the same for everyone. You can find out your normal retirement age by logging into your pension record.

If you take your benefits earlier or later, it may affect how much pension you receive:

  1. Taking benefits early

    You may be allowed to take your pension earlier than normal retirement age, under certain conditions. Consent from the Trustee and/or the bank may also be required.

    But remember… because of the way it’s calculated, taking your pension early will mean you will receive less than if you had taken it at normal retirement age. This is because you will likely be receiving it for longer. If you’ve been off work for a long time because of ill health, you may be able to get your benefits early without a reduction.

  2. Taking benefits later

    You might be able to delay taking your benefits until after normal retirement age (but usually no later than age 75). If you do this, the value of your benefits may increase to reflect the fact that you’re taking them later, and that they will likely be paid for less time.

    See the impact of taking your benefits earlier or later by logging in and getting a retirement quote and selecting a retirement date of your choice (not available for all members).

Your retirement options

You usually have options for how you take your benefits to pay for life after work. The options available to you will depend on your pension scheme and where you live. Each option has some flexibility to help you shape your income:

  1. You could take your benefits as a pension or as cash

    • Take your benefits as a regular income (pension), paid directly into your bank account. It’s guaranteed to last you for the rest of your life, so you don’t need to worry about this income running out. Depending on which pension scheme you’re a member of, your income could go up a bit every year to make up for rising prices. But these increases are capped, so they might not keep up if inflation is high. Log in to your pension record for more detail on any increases to your pension.
    • Swap a portion of your benefits for a cash lump sum. You may be able to get this money tax free depending on applicable tax limits. You can then take the rest of your benefits as a regular income, but the amount you’ll receive every year will be lower than if you’d not taken the cash lump sum. However, if you have previously waived your right to a lump sum from the scheme, this option will not appear for you. The maximum amount you can take as a tax-free cash lump sum may be capped, depending on the rules of your pension scheme and where you live.
    • Take all your benefits as a cash lump sum. If the value of your benefits is small, you could potentially choose to take that money in one go as cash, instead of having an income. You’ll probably have to pay tax on some of the money you get. When you can take this option will depend on the rules of your scheme and the laws of your jurisdiction.
  2. You could transfer your benefits out

    You can exchange your benefits for a pot of cash (called a transfer value) which you can then use to secure a retirement income, tailored to your needs, with another approved scheme or provider.

    Transferring out could give you more freedom and flexibility over how you receive your benefits (in relation to timing, increases or benefits for your dependants).

    But transferring out could also leave you worse off. You could be giving up a guaranteed income for life which may increase while in payment, as well as (where applicable) valuable benefits for your loved ones when you die.

    IMPORTANT: The information given on this website is not financial advice. As this is a one-off decision, we strongly recommend you speak to an independent financial adviser before transferring.

How you can take your Additional Voluntary Contributions (AVCs)

On top of your main benefits, you have the option of investing additional money – called Additional Voluntary Contributions (AVCs). These AVCs are invested as a separate savings pot and therefore the value may rise as well as fall on a daily basis. The value is not guaranteed.

As mentioned in Your retirement options you may have an option to take a certain amount of tax-free cash from your pension. Most people use their AVCs to take as much tax-free cash as they can without reducing their regular pension income. If the value of your AVCs is equal to or less than the amount you can take as a tax-free cash lump sum, you may (depending on your pension scheme and where you live) take all your AVCs as tax-free cash.

If you don’t want to take your AVCs as a tax-free cash lump sum, or if you have any remaining after taking a cash lump sum, you could potentially use them to:

  1. Buy an income

    You can use some or all of your AVCs to buy a guaranteed income from an insurance company. This is called an annuity. Different companies will offer different annuity rates, so it’s important to shop around. Once you’ve bought an annuity, you might not be able to change it.

  2. Take your money a bit at a time, called ‘drawdown’

    Drawdown lets you invest your money in an approved retirement fund and take an income from it when you need it. You’d have to move the money in your AVCs pot out of your pension scheme to do this, and it would be up to you to manage your money so that you have enough for the rest of your life.


    The information given on this website is not financial advice. We recommend you speak to an independent financial adviser before making your decision.

Note: These options may not be available to all members and may vary depending on where you live.

Did you know?

If you still work for the bank and want to transfer just your AVCs, you may not need to opt out of your pension scheme. You may be able to transfer your AVCs to another approved provider and still remain a member of your pension scheme – and preserve your remaining benefits until you’re ready to take them. This is not permitted in all jurisdictions and you should check with the administrator if you are considering this option.

Tax at and in retirement

Your pension income is normally treated as earned income for income tax purposes. When you start taking your benefits, you may be able to choose to take some of the value as tax-free cash. If you choose to do this, it will reduce your pension income and in turn, how much tax you’ll have to pay.

Did you know?

How much tax you pay depends on your total taxable income.

Your total taxable income is made up of all your pensions, and also any income from other sources, including your State Pension.

Different rates of income tax apply depending on the type of income and how much it is. When you get your pension income, we will normally deduct the tax before paying the rest to you. Most pension schemes work in a similar way.

Get ready to retire

  • Get a quote to see how much your benefits are worth now or at a future date (not available for all members).

  • Track down other pensions to work out what your total retirement income could be.

    Remember that before you retire you can boost your benefits by paying or increasing your Additional Voluntary Contributions (AVCs) subject to any requirements in your jurisdiction.

  • When can I take my benefits?

    The normal retirement age, for most members, is between age 60 and 65. You may be able to retire earlier than this, but your retirement income (pension) would be lower. You could also potentially retire later, but usually no later than age 75. Get a retirement quote to have a better idea of what you’ll get at any particular age (not available for all members). You may need to ask the administrator to run a late retirement quote for you.

When you decide the time is right…

Six months before you’d like to take your benefits:

  • Tell your manager (if you still work for the bank). Confirm when you intend to leave work.
  • Contact the administrator to advise of your intention to retire. They will then send you a retirement pack for you to fill in and return. But before you do…
  • Research your options, and get financial advice to make the best choices for you.
  • Beware of scammers and stay safe.