As a member of the KPS-MP you have the following options:
- Take all of your Retirement benefits as a one off cash sum, with 25% being tax free and the remainder taxed at your marginal rate of income tax. This is called an “Uncrystallised Fund Pension Lump Sum” or “UFPLS” for short.** Or “Small Pot Lump Sum” if all your benefits in the Scheme has a value of £10,000 or less.
- Use your Retirement Account to buy an annuity, which is a pension paid by an insurance company.
- Take 25% of your Retirement Account as a tax-free lump sum and use the balance of your Retirement Account to buy an annuity.
Please note you can also take withdrawals from your Retirement Account as and when you require – with no limits. Generally 25% of it will be tax-free. This is called “flexi-drawdown”. However, the KPS-MP is currently not able to offer this option and should you wish to take advantage of this, you will need to transfer your Retirement Account to a pension provider who can offer you the “flexi-drawdown” option.
** By taking all your pension savings as one off taxable lump sum you may be subject to a reduced Money Purchase Annual Allowance .