Your retirement options

The normal retirement age in the defined contribution (DC) section of the Schroders Retirement Benefits Scheme is 60, but you can use the money in your individual account to secure your retirement income before or after that age – it all depends on your personal circumstances.  

 

There are a number of options to consider when it comes to retirement, which we’ve outlined for you below:  

Retiring early

The normal minimum pension age is set by the government at age 55 (rising to age 57 in 2028). If you do this you need to consider that your individual account has not had as long to build up.  

Retiring early due to ill-health

If ill-health permanently prevents you from continuing your employment with Schroders, you may be able to access the money from your individual account before the age of 55. The Trustee will decide whether you meet the requirements to access your individual account early based on evidence provided by a registered medical practitioner. We recommend contacting the Schroders HR team for guidance in the first instance. 

Retire with the right amount

Everyone’s retirement needs and life plans are different, so there’s no one-size-fits-all solution to making sure you have enough to live on when you stop working – especially if you’re thinking of accessing your individual account early.  

Our retirement living standards page can help you work out how much you need to achieve your desired lifestyle. For further help, you can also: 

Check you’re on track

As a member of the DC section, you receive an annual benefit statement. It contains all the details about your individual account, including how much you’ve already saved and what income you might be able to buy with it in the future. You can see this on Aptia OneView where you can also view the value of your individual account at any time. 

There are also modelling tools available on Aptia OneView to help you plan for the future. 

Consider other sources of income

When you retire, you might not have to rely on the money you’ve saved in your individual account alone. In fact, having multiple sources of income in addition to your Schroders pension can help you to safeguard your retirement plan, especially if any of your investments deliver returns that are less than expected. Additional sources of income may include other savings plans or investments, or income from property. You may also receive income from the State Pension. 

What happens to my pension if I keep on working?

If you continue to work for Schroders or for another employer after the age of 60, you can delay taking the money saved in your individual account until your actual retirement date. If you’re still working for Schroders contributions will continue to be made into your individual account.  

 

However, if you choose to take your benefits while still in employment, all contributions to your individual account will stop. You’re also able to take your pension benefits and re-join to continue saving for retirement if you keep working for Schroders. 

How to take your money

Before your retirement date, Mercer will provide you with information about your options. To secure your retirement benefits, your whole individual account will need to be used at the same time and transferred out of the DC section. You’ll also be offered an appointment with a pension specialist to talk through your options. They will only give you guidance and not financial advice. You’ll then be able to choose your preferred way(s) to take your money. The amount you get will depend on a number of factors: 

  1. The contributions made to your individual account to date 

  2. The performance of your chosen investment funds 

  3. The age you choose to take your money 

Accessing your individual account before you retire

In order to provide you with more flexibility as you approach your retirement you can ask for a cash lump sum to be paid from your individual account. This is called an Uncrystallised Funds Pension Lump Sum (UFPLS). This means you do not need to immediately take your whole individual account out of the DC section to secure your retirement benefits. Instead you can take a few amounts out as you get closer to your retirement. You must have reached your minimum pension age to do this and:  

  • You’re restricted to one withdrawal per year 

  • You’ll be able to make a maximum of three withdrawals 

Please contact Aptia to find out more about this option.

Your retirement options

Tax-free cash

You can take up to 25% of your individual account as a tax-free cash sum when you retire. The current maximum tax-free amount you can take is £268,275.

Cash

You can take the rest of your individual account as a cash sum. This will be taxed as income and may move into a higher tax band, so you could end up paying more in tax than you expect.

Annuity

You can use some or all of your individual account to buy an annuity. This provides you with a guaranteed income, either for the rest of your life or for an agreed number of years.

Income drawdown

You could leave your money invested, and draw down sums of money as and when you need it. You decide how much you want to take out and when, or you can set up a regular income. Either way, this enables you to benefit from a flexible income while your money remains invested and continues to grow. To access this, you’ll need to transfer your individual account to a different policy that will allow this.

Combine your options

The good news is that you don’t have to choose just one option. You can enjoy a degree of flexibility that allows you to take your money in a combination of ways that best suit your needs and lifestyle. For example, you could take 25% as a tax free cash sum, purchase an annuity with some of your money, while having the rest invested and drawing down sums of money as and when you need it. There’s even the option to delay using the money in your individual account to secure your retirement income up to the age of 75.

Before choosing how to access your money in retirement, we recommend getting independent financial advice to understand the most suitable options for your current situation and long-term life plans. For help finding an adviser, take a look at our Guidance and advice section. Please note that you’ll need to pay for any costs associated with obtaining financial advice.