How your pension income is affected
The amount you’ll get as pension income will be calculated using your pensionable service and final pensionable salary at the date you opted out.
Between the date you opt out and the date you start taking your pension income, it should increase a bit every year to help keep up with inflation. Check your schedule factsheet to see how this works for you.
If your total pension benefits are more than £1,073,100 you’ll have to pay more tax
This £1,073,100 limit is called the Lifetime Allowance. If you have already reached the Lifetime Allowance, or you’re close to reaching this limit, it’s very important that you speak to a financial adviser. They can help you decide whether it’s better for you to carry on building up benefits in the Fund, or to opt out.
If you have Fixed Protection from HMRC, you won’t be able to build up any pension savings over your limit without paying a significant tax charge.
If you opt out of the Fund, you’ll automatically join the Retirement Savings Plan (RSP) instead
This is the bank’s Defined Contribution pension plan, which works in a different way to the Fund. With a Defined Contribution pension, you build up a pot of money that you can use when you decide to take your pension. You put in some money every month, your employer puts in some for you too, and you’ll get tax relief on top. This money is invested to help it grow. How much you’ll get when you take your pension depends on how much you put in, how the investments perform, and how you choose to take your money when you come to use it.
You’ll start by automatically saving 8% of your ValueAccount into the Retirement Savings Plan. You can choose to save more than this if you like, up to certain limits.
You can also choose to opt out of the Plan if you want to. You might want to do this if you’ve already built up a total of more than £1.03m in pension savings. You can check how much of this allowance your Fund benefits have used up on the Fund website. If you have built up more than the £1,073,100 limit, opting out could mean you’d avoid losing any valuable tax protection you might have in place.