How the income delivered from a Final Salary pension is calculated varies from scheme to scheme, but is always defined. You should receive an annual statement from your pension scheme, which ought to include a value of your pension at retirement. A Final Salary pension can provide you with a secure income throughout your retirement.
Yet, you may still want a flexible income to meet your retirement goals. This may be because you plan to spend more in early retirement, or at a later point. For example, you may have mortgage debt remaining, plan to travel, or want to financially support loved ones.
Many Final Salary pension schemes will allow you to take a one-off lump sum from your pension to kick-start your retirement. This will reduce your income during retirement but does provide the flexibility of a capital sum if you need it. It can be difficult to understand how your different assets fit together and how you can use them to reach retirement goals.
This is an area we can help you with. If you have a Final Salary pension, you may be considering transferring out. At retirement, you do have the option of giving up the benefits of a Final Salary pension and, instead, receiving a lump sum which must be transferred to a Defined Contribution pension. Receiving a lump sum can seem attractive. However, a guaranteed income for life is often more valuable. Please contact us to discuss your Final Salary pension and what it means for your retirement lifestyle.
Usually, there are ways to create a flexible income stream that will suit your goals whilst retaining the security offered by your Final Salary scheme. Please get in touch or call A pension is a long-term investment.
Learn more and compare subscriptions content expands above. Full Terms and Conditions apply to all Subscriptions. Or, if you are already a subscriber Sign in. Other options. Close drawer menu Financial Times International Edition. Search the FT Search. World Show more World. US Show more US. Companies Show more Companies. Hypothetical calculations were introduced to safeguard the position of members who after completing sufficient service to qualify for retirement benefits, had a break in service and then, at a later date undertook further pensionable employment.
Hypothetical calculations act as an 'underpin' for members who leave pensionable service, although the nature of the underpin will vary depending on the particular circumstances of the member.
Our Hypothetical calculations factsheet offers additional information along with examples. This amount is banked each year with your eventual pension made up of all the amounts that have been banked each year. The average salary is used to calculate your final salary benefits when you retire. If you have had a break in service after 1 April of more than five years then the salaries used will be those at the time of the break.
If you have no pensionable service on or after 1 January , your average salary will be the best days in the last days before you left service. This fixed amount is reviewed each year in line with factors provided by HM Treasury — see the updates page for details of the current fixed amount. Where this restriction applies, any contributions not used in the calculation of the final average salary will be refunded if the service to which the salary relates is in the Final Salary arrangement.
Where a member in the Career Average arrangement has a Salary Link, meaning the salaries earned during service in the Career Average arrangement are taken into account to determine the best final average salary, the restriction will apply when determining the best final average salary used to calculate benefits in the Final Salary arrangement. The restriction does not apply in respect of the accrual of pension in the Career Average arrangement.
0コメント