My options

It's important to take time to think about which option might be best for your financial circumstances.

The options you have when you take your pension will depend on the amount you have earned in the Scheme and when you decide to take your benefits. You will normally be able to choose from:

A full pension – You’ll receive monthly payments for life.

A tax-free cash lump sum and a reduced pension - You may be able to swap some of your pension to receive a one-off cash lump sum, which is paid tax-free.

A one-off taxable cash lump sum - If you have a small pension you may be able to take it as a lump sum and about 25% of the total amount is paid tax-free. You’ll need to meet the HMRC requirements to do this, including:

  • You must be at least age 55.
  • The capital value of all your pension benefits (excluding your State Pension) must be less than £30,000.
  •  If the capital value of your Scheme pension is less than £10,000, you may be able to take it as cash regardless of the value of any other pension savings.

A transfer to another pension arrangement - You may transfer your pension to another arrangement if you wish to consider additional retirement options that may available with other providers.

Additional Voluntary Contributions
If you paid contributions into the M&S AVC Scheme, you can take your AVCs:

  • As part or all of your tax-free cash lump sum. This means you might not need to swap any or as much of your pension for cash.
  • By transferring them to another arrangement, where there may be different options for you to consider. 

It’s not always easy to know the choice that’s right for you and if you’re ever unsure you should seek independent financial advice. You can find an independent financial adviser in your local area by visiting The Money Advice Service.

Please be aware…

The choice you make when you take your pension is permanent and you cannot change your mind once your pension is in payment.

The Trustee always needs to make sure that your pension is paid in line with the Scheme Rules. This can sometimes mean that even though you might meet HMRC requirements your pension cannot be taken as a cash lump sum.

As your pension increases each year you may find that although it currently meets HMRC’s requirements for a one-off cash lump sum, when you come to take your pension it has increased to be worth more than the limits in place at the time and you won’t be able to take it as a cash lump sum.

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