Member Benefits

Benefits up to age 75

When you take (or crystallise) your benefits, you are entitled to:

  • A one-off tax-free lump sum of 25% of your Plan known as the pension commencement lump sum which is paid at the date of crystallisation, and
  • A pension for life, which is taxed as earned income. You can choose to defer purchasing a lifetime annuity and take income drawdown in the form of unsecured pension directly from your SIPP. This gives you a considerable amount of flexibility. We will calculate the maximum level of pension that you can take using Government Actuary Department rates. The maximum pension that you can take each year will be 120% of this value. The minimum is nil, meaning that you do not have to draw any pension if you do not wish to. We are required to recalculate your maximum pension at least every five years.

Your SIPP is split into 1,000 segments, each of which have the same options open to the Plan as a whole. This means that instead of taking your benefits in one go, you could take your benefits in stages by crystallising some of your segments and taking tax-free cash and pension from them, while the balance remains un-crystallised. You can therefore phase your retirement to match your income needs. You must crystallise all segments of your Plan by your 75th Birthday.

Your SIPP will be tested against the lifetime allowance at the time of crystallisation. If the lifetime allowance is exceeded, then a tax charge will be applied to the excess (unless you have the necessary protection).