Taking your benefits
The options you’ll have at retirement will depend on the section(s) you’ve been in.
What will you receive?
Defined benefit pension
If you built up pension in one of the defined benefit sections of the Fund you’ll receive a pension for the rest of your life and, under the current law, you'll usually have the option to take up to 25% of the value of your benefits as a tax-free cash lump sum. To get a detailed outline of your personal options please contact Nestlé Pensions.
Retiring overseas
If you're planning on spending your retirement overseas, we will still be able to pay your pension, provided you’re living in a country with an established banking system. It is possible to make international payments by bank transfer. However, you should bear in mind that the payment will be made in sterling and you will be charged for converting it into the local currency. Before we process your payment overseas, we will need to see a copy of your passport to perform some anti-money laundering checks. Please note we can still make payments to a UK bank account even though you’re living overseas.
Defined contribution account
If you built up savings in one of the defined contribution sections of the Fund, such as DC Start or DC Core, you can choose how to use your DC account to buy an income in retirement. You can choose one or a combination of the following:
Cash
You can take all or part of your account as cash. 25% of the total value of all your pension benefits can be taken tax free. If you take more than 25%, you’ll have to pay tax on the balance, and you may pay a higher rate of tax if you take your whole account at once.
Income drawdown
You can transfer your account to an external arrangement, which allows you to withdraw variable amounts of income (subject to tax) while your account remains invested.
The income you will receive is not guaranteed for life and will vary depending on the investment performance of your remaining account. Income drawdown products can be complex. We recommend that you get financial advice before committing to one.
Guaranteed income for life
You can use your account to provide a pension by buying an annuity from an external provider. The amount of pension you receive will depend on the type of annuity you choose and the price of annuities at that time.
For example, you could choose one that provides a pension for your partner after your death, an enhanced annuity that takes into account your health and lifestyle (possibly giving you a better rate), or an annuity that rises with inflation. You would pay tax on your pension payments and the price of annuities at that time.
How your pension will be paid
Your DB pension will be paid monthly for the rest of your life directly from the Fund into your bank or building society. If you retire mid-month, the first payment will include a proportionate amount for the month you retired in. You will pay income tax on your pension income, but you do not pay National Insurance on your pension income.
If you have a DB pension and a DC account there are several different options that may be available to you. When you are starting to think about retirement, please contact Nestlé Pensions and ask for a retirement quote.
Pension increases in retirement
Defined benefit pension
Once you're receiving your pension from the defined benefit sections of the Fund, it increases each year to help the value of it keep pace with inflation. Different increases apply to different parts of your pension depending on when you built up your pension. As such, the increases we apply will differ from member to member. Once your pension is in payment, we will write to you every April detailing how your pension is to be increased in the coming scheme year.
Defined contribution account
If you choose to use your DC Start or DC Core account to provide a pension by buying an annuity,any increases your pension will receive will depend on the options you choose when you buy your annuity. For more information about the options you’ll have for your DC account, see What will you receive?