Retirement options

There are a number of options for you to consider when taking your Pension. 

 

What happens if I don’t have a large pension pot?

If the total value of your entire pension savings and benefits (in all your pension pots) is no more than £30,000 you may be able to take your entire pension pot as a lump sum. 25% of the lump sum will be tax-free and the rest will be taxed as part of your income. This is known as trivial commutation and is only available from the age of 60.

 

Can I take any of my Pension without any tax deductions?

You can usually take up to 25% of your pension pot as a tax-free lump sum. The money that is left can be used to provide you with a pension. Current tax laws mean you'll pay tax on your pension income - only the lump sum is tax-free.

 

What is an annuity?

It's a contract you buy from an insurance company. You give them a lump sum such as the proceeds of your pension pot and in return they guarantee you an income for life. You can opt to have your income remain fixed, or to increase each year. You can also choose whether or not a dependant’s pension is provided on your death. However, you should be aware that these options will impact on the level of income you receive.

 

You can use all the money in your pension pot to buy an annuity. Or if you decide to take a tax-free lump sum, then you can use the remainder of your pension pot to buy a smaller annuity. It's best to ask for financial advice to make sure you get the best deal as there may be other ways to take your income. Once you buy an annuity, you can't usually change it – so it's really important to make the right decisions.

 

The amount of annuity you can buy will depend upon a number of factors at the time, such as;

  • Interest rates
  • Your age and state of health
  • Your life expectancy
  • The options you choose (for example you can choose an annuity that increases your payments each year, or guarantees your payments for a period of time).      


Please click here to read more on your flexible pension options.

 

Please be aware of Pension Scams, click here for more information.

 

Please see below for a list of retirement options depending on your section of the Plan.

 

 

When you retire, your Retirement Account will be used to purchase the benefits of your choice. If you're unsure how to take your benefits please contact a financial advisor.

 

 
YOUR OPTIONS
  Annuity A bit at a time Cash
Description Purchase an income for life (pension) from a specialist company Take your fund as cash lump sums or a regular amount each month Take your whole fund as cash in one go
Can I still take a tax free cash lump sum with this option? Yes - up to 25% of the value of your fund Yes - up to 25% of the value of your fund Yes - up to 25% of the value of your fund
Can I do this option within the Telefónica UK Pension Plan? No - your fund must be used to purchase an annuity outside of the Plan No - your fund must be used to purchase a flexible retirement product from a
specialist company		 Yes

 

For more information on your retirement options click here.

 

Spouse or Dependants Pension


If you joined the Telefónica Pension Plan before 1 March 2013 there may be an entitlement to a Spouse or Dependant's Pension. To find out more please speak to our administrators Standard Life click here to find their contact details.

 

To understand how any Spouse or Dependant Pension will be impacted by you stopping your Pension contributions or leaving the Plan please click here.

The Normal Pension Age under the Plan is age 60 so if you wish you can retire from age 60 and take your Plan benefits without reduction. However, you have the right to work beyond age 60.

 

The benefit you get will depend on the section of the final salary scheme you belonged to.

 

Former Section 2 members

For each year of pensionable service, and proportionately for part years, up until 28 February 2013 you will receive a pension of 1/60th (or 1.67%) of your Final Plan Salary.

 

If you opted out of final salary before it closed on 28 February 2013 and became a Section 2A member, then your accrual rate will have been 1/80th for the period of service from the date of opt out up until the final salary section closed on 28 February 2013.

 

Former Section 3 members

For each year of pensionable service, and proportionately for part years, up until 28 February 2013 you will receive a pension of 1/80th (or 1.25%) of your Final Plan Salary and a lump sum of 3/80th of your Final Plan Salary.

 

If you opted out of final salary before it closed on 28 February 2013 and became a Section 3A member, then you will have ceased to accrue 3/80th lump sum for the period of service from the date of opt out up until the final salary section closed on 28 February 2013.

 

The Plan Administrators will contact you six months before you reach age 60 with a pension quotation. At that time you will be asked whether you wish to take your benefits or postpone them until later. You'll also be given the option to take up to 25% of your benefits as a tax free cash lump sum in exchange for a reduction of your pension.

 

Spouse and Dependants Pension


To find out more on your entitlement to a Spouse or Dependant Pension please speak to our administrators LCP. Click here to find their contact details.

 

To understand how any Spouse or Dependant Pension is impacted by your stopping your Pension contributions or leaving the Plan please click here.

 

When you retire, your Retirement Account will be used to purchase the benefits of your choice.

 

 
OPTIONS
  Annuity A bit at a time Cash
Description Purchase an income for life (pension) from a specialist company Take your fund as cash lump sums or a regular amount each month Take your whole fund as cash in one go
Can I still take a tax free cash lump sum with this option? Yes - up to 25% of the value of your fund Yes - up to 25% of the value of your fund Yes - up to 25% of the value of your fund
Can I do this option within the Telefónica UK Pension Plan? No - your fund must be used to purchase an annuity outside of the Plan No - your fund must be used to purchase a flexible retirement product from a
specialist company		 Yes

 

For more information on what your options are click here.

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