In the lead up to National Customer Service Week, we asked Trevor Davis who oversees our Contact Centre to answer our member's most common questions.  

“The team I oversee in our Contact Centre take hundreds of calls from members every day. We know that the pandemic has put pensions at the forefront of many people’s minds. The team really enjoy talking to members and answering any questions they have."

Trevor Davis, Deputy Head of Operations and Contact Centre Manager

Whether planning retirement, actually retiring or coping with a life-changing event such as a bereavement, we pride ourselves on delivering the excellent customer service to make these challenging times as easy to navigate as possible. 

As well as the Contact Centre team, our member website features a Benefit Modeller that enables members to select a number of different retirement scenarios and immediately see how it impacts their payments. They can also Retire Online at the click of a button.

We hope the answers to these ten most frequently asked questions will help you as you plan for your retirement:

1. Once I retire, will my payment ever increase?

This depends on when you were in your pension scheme.

  • If you were in the scheme before 6/4/1997, then your pension payment - or the part that relates to your time in the scheme before this date - won’t increase.

  • The part of your payment relating to your time in the scheme on or after 6/4/1997 will increase each year on 1 January, in line with inflation. This increase is capped at 2.5 per cent, so if inflation increases by more than 2.5 per cent, your increase that year will be 2.5 per cent.

2. Can I take my benefits at any time?

The earliest you can take your benefits is at age 55. However, you can retire earlier than your scheme’s normal retirement age. In both situations, as you’re choosing to take your payments early, they’ll be reduced to reflect that they’ll be paid over a longer period of time.

If you decide to take your payments past your normal retirement age – up until age 75 – they’ll no longer be increased by inflation. Instead, a late retirement factor will be used to reflect the fact they’re being paid later.

3. If I die, will my beneficiaries receive a lump sum?

No. However we’ll make payments, at a reduced level, to any children under the age of 18.  

Payments can also be made to any children between 18 and 23, providing they’re either:

  • in qualifying full-time education

  • have a qualifying disability which means that they cannot work full-time

We may make payments to a spouse or relevant partner but this depends on your former pension scheme’s rules, as well as our rules.

4. When will I receive my payments?

You’ll be paid on the first of each month and in advance.

5. Will my payments be taxed?

Yes. Your annual payments are taxed as earned income. Only your lump sum is tax-free.

6. Do I have to stop working if I take my benefits?

No, you don’t have to stop working, but your payments are considered taxable income and so you may want to consider the tax implications. 

7. Can I take my lump sum and put off taking my annual payments?

No. The lump sum cannot be paid without starting annual payments.

8. Can I take my lump sum once I’ve started my payments?

No. You only have the option to take a lump sum when starting your payments. Once your payments start there is no option to take a lump sum. You’ll receive monthly payments for the rest of your life

9. Can I defer my compensation payments? 

Yes, you can defer your compensation payments up to the age of 75. To do this you can either call us or log into the member website and enter a date in the ‘Defer Your Pension Date’ field, under the Membership Details tab. 

Parts of your PPF compensation may however be payable at different ages, depending on your entitlement under your former scheme. Where this is the case, if you take the first part of your compensation, you will not be able to defer taking the second part beyond the normal retirement age (NRA) applicable to that part.  

10. If I defer, can I change my mind?

Yes, if you defer your payments you can change your mind at any time. Just call us or use the ‘Retire Now’ feature on the member website

To find out more about planning for, or taking retirement, our Retirement FAQs are a good place to start. 

Or you can also speak directly to one of our highly experienced team members on 0330 123 2222. They’ll be very happy to help you. 

Trevor Davis is our Deputy Head of Operations and Contact Centre Manager.

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