As you approach your normal retirement date, the Pensions Team will send you an options letter setting out the benefits available to you on retirement. The pension you receive at retirement is paid monthly in advance for the rest of your life and will be reviewed each year.
Options at retirement
When you retire, you will usually be able to give up part of your pension for a cash sum known as a pension commencement lump sum. Under current legislation this is paid tax free. If you do decide to take a lump sum, any pensions payable on your death will not be affected.
You will normally be able to take a tax free pension commencement lump sum in the region of:
25% of the value of your pension benefits
The amount of pension you give up depends on the amount of lump sum you wish to take and your age at retirement. If you need advice about how much lump sum to take or how to invest it, please contact an independent financial adviser.
Additional Voluntary Contributions (AVCs)
If you paid AVCs whilst an active member of the Scheme, your AVC fund will be used to provide additional pension benefits when you retire. From April 2015, when you retire you can use the value of your AVC’s to provide you with benefits to suit your needs and lifestyle. The benefits can be provided as
a cash lump sum;
a pension from either the Diageo Pension Scheme or from an insurance company;
flexi-access drawdown; or
a combination of the above.
For further information on what you will get, please click here.
Payment of your pension
Pension benefits are paid into a bank or building society account on 6th of every month. Just before you retire, you will be asked to provide us with details of the account where you would like your pension paid.
Unless you are taking up further employment, you should send your P45 to the Pensions Team. If we don't receive your P45, your pension will be taxed at basic rate, currently 20%, until instructions are received from the tax office.
You may also wish to change any direct debit or standing order instructions so that they fit in with the date on which your pension is paid.
Late payment of your pension
You may apply to defer payment of your pension until the earlier of the date your employment ends or your 75th birthday.