Important decisions about your retirement savings

It’s time to think about your plans for the future

As a hybrid member you have both Defined Benefit (DB) and Defined Contribution (DC) benefits. The two work in different ways and you have choices about what you want to do with the benefits you’ve built up. The good news is there’s a range of ways you can access your money – and you don’t need to stop working to do it.

Whether you are about to take your Defined Contribution (DC) pension pot, or your retirement is a long way off, it’s worth understanding more about your benefit options. The decisions you make can have a real impact on your retirement income.

Make sure you are saving enough. It’s essential to think about keeping up your contributions and making the most of matching contributions from your employer, even if your circumstances change.

If you’re getting closer to retirement, you may be thinking about your options for how you can take your Defined Contribution (DC) pension pot from the Scheme. You can currently take your DC pension pot at any age from 55 to 75. From 06 May 2028 the earliest age at which pension savings can be taken will increase from age 55 to 57. Discover the range of ways that you can take your DC pension pot to suit your needs.



Your DB pensions at a glance

As an active hybrid member, when you decide you want to take your benefits, your DB pension will be calculated using two methods and you’ll receive whichever one produces the highest pension. Either:

1. A pension based on your DB pensionable service up to 30 June 2015 and your DB pensionable salary at date of retirement (which will include any salary increases from 1 July 2015);

2. Or, a pension based on your DB pensionable service and DB pensionable salary as at 30 June 2015, revalued in line with the Scheme rules as if you left service (to help protect your pension against the impact of inflation) from 1 July 2015 up to your retirement date.

For more information on taking your benefits see the examples in the ‘Your DB and DC pension benefits working together’ (1.9MB, PDF).

Your DC options at a glance

You can use your DC pension pot in the way that best suits your needs. You can buy an annuity, take a flexible income (called drawdown income) or take all your DC pension pot as cash. You can also take a combination of these options, for example, you can take some cash up front, buy an annuity to cover the basics and drawdown the rest. It’s your choice.

When choosing which option, think about your plans for the future. Do you need flexibility or income certainty? Do you have other sources of income? Are you happy to continue to manage investments into the future?

Explore each of the options below to find the one that suits your needs the best.

Drawdown income

Keep your money invested and take a flexible income from it. Take as much or as little as you need, when you need it.
  • You can take a regular income or lump sums when you need them.
  • After you transfer your DC pension pot to a drawdown income provider, you can take up to 25% of your DC pension pot tax-free either all at once or take 25% of each withdrawal tax-free. The balance will be subject to income tax.
  • If there is some drawdown pot left over when you die, this can be passed to your loved ones.
  • The value of your drawdown pot will rise and fall with investment performance.
  • You will need to monitor your investments and spending to ensure your money doesn’t run out.

Annuity

An annuity is a secure, regular income for life that you buy from an insurance company.
  • You can choose the type of annuity that matches your needs.
  • You can take up to 25% of your DC pension pot as a tax-free cash lump sum just before you buy an annuity. Your annuity will be subject to income tax.
  • You can choose an annuity that will provide an income for your dependants after you die.
  • Once you have purchased your annuity, you can’t change the type of annuity or the insurance company.

All cash

Take all your DC pension pot as one or two cash lump sum(s) (split between two tax years) from the Scheme.
  • You can invest your cash lump sum(s) outside of a pension arrangement, and use it as and when you need it.
  • You can take 25% of each cash lump sum(s) tax-free.
  • Any remaining cash from your lump sum would be included in your estate after you die.
  • Once you have taken your cash lump sum(s), you can’t change your mind.
  • Taking all of your DC pension pot may push you into a higher tax bracket as your income is not spread out.

Things to think about:

Additional help to make your choices

Have you watched a retirement webcast?

Our retirement webcasts are designed for members aged 50 and over, to help you understand more about your retirement income options. Click to watch the full series of Retirement webcasts for members over age 50.

Have you tried our Pension Freedom Planner?

The Pension Freedoms Planner is available when you login to My Pension . It’s an interactive modeller and it can help you to work out when you can afford to retire. It shows you the types of retirement income options available with illustrations of the amounts of income your DC pension pot might provide. There are also helpful videos and a guide on My Pension that show you more about how to use the modeller.




Login to My Pension

Check out the Pensions Feedom Planner and set your Target Retirement Age by logging into My Pension.



You’ll need your username and password to log in. Don’t know yours ? If you’re not on the HSBC network, you can click here .

Quick links to external help guides

There's lots of external information to help and guide you through your
options. Here’s some sources worth looking at before deciding:

Insuring Women’s Futures

The Trustee would like to bring to your attention some excellent research and guidance about the “moments that matter” in securing your financial future. Visit Insuring Women’s Futures to learn more about how you can make the most of your retirement savings journey.

Visit Insuring Women’s Futures

Pension Wise

Pension Wise is a free government backed service that offers impartial guidance about your DC pension pot. Book an appointment with Pension Wise to get help and guidance before deciding what retirement option is right for you.

Visit Pension Wise

The MoneyHelper

The MoneyHelper also o!ers free and impartial money advice. You can also use this service to find a retirement financial adviser.

Visit The MoneyHelper

GOV.UK

GOV.UK is the best place to find government services and information for citizens and businesses, guidance for professionals, government policy.

Visit GOV.UK

Explore the Retirement Options

Drawdown Income 

Keep your money invested and take a flexible income from it. Take as much or as little as you need, when you need.

Annuity 

An annuity provides a secure, regular income for life that you buy from an insurance company.

All Cash 

Take all your DC pension pot as one or two cash lump sums (split between two tax years) from the Scheme.