What will I get?

When you retire you can use the value of your Retirement Account to provide you with benefits to suit your needs and lifestyle.  The benefits can be provided as

  • a cash lump sum;

  • an annuity (a pension) from an insurance company;

  • flexi-access drawdown;  or

  • a combination of the above.

A cash sum

When you retire you have the option to take all or part of your Retirement Account as a cash lump sum. You can take up to 25% of the value of your Retirement Account as a tax free lump sum with any more cash being taxable at your marginal rate of income tax. 

An annuity

When you retire your Retirement Account or the remainder of your Retirement Account if you have chosen to take a cash sum will be used to buy you a lifetime annuity (pension payable for life) from an insurance company.

The amount of pension you can expect to receive will depend on a number of factors including:

  • The terms of the annuity you wish to buy

  • Your health and whether you smoke or not

  • The value of your Retirement Account at the date of your retirement

  • The cost of buying an annuity when you retire.

You will have to decide on the terms of your annuity, for example how it should increase each year (subject to a minimum increase of the lesser of RPI and 2.5% per year), whether it should provide a pension for a dependant after your death and whether payment of the pension should be guaranteed for a number of years. The choices you make will affect the amount of pension that you receive.

Flexi-access drawdown

Flexi-access drawdown allows you to take a cash lump sum and/or an income without buying an annuity.

  • You can drawdown your retirement income when you need it;

  • Easy to pass your pension fund to your dependant;

  • Take as much or as little cash at any time with up to 25% available tax free; and

  • Keep your pension fund invested for potential growth.

The Company has appointed an annuity service provider who will work on your behalf to get the best market rates for you when you retire.  As you approach retirement, you will receive full details of the options available to you and these will be fully explained by the annuity service provider, allowing you to make an informed decision.  Diageo will pay the cost of providing you with access to the annuity service provider.

Signpost to Guidance 

Pension wise: Your Money, Your Choice

The Government’s 2014 Budget announcement on 19 March 2014 set out some significant changes to pensions. Individuals who are able to take advantage of the new flexibility provided by the change to legislation effective from April 2015 are entitled to 45 minutes of guidance via a website, over the phone or face to face.

To receive free, impartial guidance from the government, go to www.pensionwise.gov.uk or Telephone: 030 0330 1001.

  • tailored guidance (online, over the telephone or face to face) to explain what options you have and help you think about how to make the best use of your pension savings;

  • information about the tax implications of different options and other important things you should think about; and

  • tips on getting the best deal, including how to shop around.

In addition to the guidance provided by Pension wise you may want to consider taking independent financial advice.