Retiring from the DB Section

Whether you’re starting to wind down by reducing your hours or still working full time with an eye on the day you can stop, there are a few final steps you can take to prepare for retirement.

When taking your pension from the DB Section, there are a few things to consider, such as whether you want to take a cash lump sum, and if so, how much. If you’ve paid Additional Voluntary Contributions (AVCs), you’ll need to decide whether to include them as part of your pension or take them separately.

Briefly, your options from the DB Section include:

taking your annual pension
taking a tax-free cash lump sum of up to 25% (capped at £268,275) of the value of your pension and a smaller annual pension
taking a one-off payment of all your benefits. This is only available to you if your benefits are valued at less than £30,000.

Alternatively, if you think you’d like more flexibility to manage your retirement income, you can transfer out of the scheme to a defined contribution (DC) pension arrangement with another provider.

Help & guidance

If you need advice, make sure you use an adviser who’s qualified to give advice about pensions, and watch out for pension scams. You can find an adviser in your local area by going to VouchedFor or Unbiased, or use the retirement adviser directory on the MoneyHelper website.

Review your finances

If you have any debts, could you clear them before your retirement date? The MoneyHelper website has a ‘Bill Prioritiser’ tool, which can help you by sorting your bills and payments into the right order and explaining what you need to do if you are struggling to pay.

Once your debts are clear, you should concentrate on building up an emergency cash reserve – just in case of unforeseen circumstances.

If you think you may have lost touch with a former pension plan, the government provides a free tracing service to help you find it again.

You may also have other lost savings accounts or investments, such as premium bonds or ISAs. You can track them using My Lost Account.

Check your retirement budget again and make sure your estimated income is going to cover all your outgoings, with some extra spare for emergencies.

Get your paperwork in order

Give your pension providers plenty of notice of your chosen retirement start date (six months should be enough). In any event, you can expect to hear from Aptia, our pension administrator, around six months before your retirement date – as long as they have your correct contact details.