Retirement is no longer a one-off decision and you don’t have to stop working to take some (or all) of your Scheme benefits. If you are still working for the Bank, you may be able to take your Scheme benefits and continue to work, perhaps part time or on reduced hours. You can find out more about flexible retirement in our hybrid flexible retirement guide.
Taking all your DC pension pot (or any other money purchase savings you have) as cash, opting for ‘drawdown income’ or taking reducing annuities may trigger a reduced Annual Allowance, the MPAA, for any future DC contributions. The MPAA limit for the 2021/22 tax year is currently £4,000 and, if triggered, any contributions to the Scheme (or contributions to other DC schemes) you or your employer make that are over the £4,000 limit are subject to a tax charge
Visit The Money Helper Money Purchase Annual Allowance
page for more information.
It can be difficult to work out how much you might need in retirement. The Pensions and Lifetime Savings Association has developed the Retirement Living Standards to show what life in retirement might look like at three different income levels, and what a range of common goods and services would cost for each level. It’s a useful tool to help you think about what kind of lifestyle you would like in retirement, and the value of retirement savings you are likely to need to achieve this. Visit Retirement Living Standards
for more information.
As a hybrid member, you can choose whether you want to take your DB pension and DC pension pot together or separately. If you take them at the same time, you may be able to use your DC pension pot towards your overall tax-free cash lump sum. If you want to know more about how much tax-free cash you could take, there’s an easy way to estimate it. Why not watch this video today and find out more.
The DB Normal Retirement Age (NRA) under the pension scheme is 65, although you can choose to take your benefits at any age from 55 to 75. In some cases, the Trustee and/or HSBC need to agree to you taking your benefits early (see your section guide and if applicable, 2009 change leaflet in the Information centre). If you take your DB benefits early or late, then your pension will be adjusted accordingly. If you had an NRA under 65 before the 2009 changes and you paid the additional 3% contribution from 1 April 2010 up to 30 June 2015, you'll be able to receive an unreduced pension from an earlier age, generally age 60 (or an earlier age which applied to you before 1 April 2010).
You don’t have to take your DB and DC benefits at the same time but you’ll need to if you want to take your tax-free cash lump sum from your DC pension pot. If you take your DC benefits without your DB benefits, you’ll lose the salary linkage on your DB benefits.
If you don’t take your DB and DC benefits at the same time, or you have some of your DC pension pot left after taking your tax-free cash, you can use these your DC pension pot in other ways. You’ll be told about your options when you decide to take your benefits.
Your DC pension pot will have a Target Retirement Age (TRA) of 65 unless you choose a different age in My Pension. However, if you paid Additional Voluntary Contributions (AVCs), made bonus sacrifice payments or were still paying AVCs into the DC investment funds as at 30 June 2015 you’ll already have a TRA and your DC pension pot from 1 July 2015 will target the same TRA (unless you decide to change it in My Pension).
You may want to think about what age you want to take your DB and DC benefits so that you can target your DC investment choices to that age. If you want to view or change your TRA to any age between 55 to 75 for your DC pension pot, simply log on to My Pension
The HSBC Administration Team, Willis Towers Watson (WTW), will write to you six months before you reach your TRA to tell you the current value of your DC pension pot, the options available and where to get more help and guidance. You can also request to received this information earlier.