Final Salary Pension (Defined Benefit)
This type of occupational pension scheme, also known as a defined benefit scheme, provides benefits usually based on your salary and the number of years you've been in the scheme.
Read about the features of a Final Salary Pension
You'll need to contact your scheme administrator for details on your pension but here are some common features of defined benefit schemes.
- Tax-efficient* - Employee contributions to your defined benefit pension plan qualify for tax relief, and you can take a tax-free cash lump sum on retirement. Read more about the tax benefits. Be aware that pensions in payment are taxed as earned income.
- Defined income - your pension benefits are set (defined) based on the length of time you've been in the scheme and your salary.
- Flexibility - at the normal retirement age you'll usually have a number of options. These, for example, include deferring your income, taking pension income only, and commuting part of the income to a tax free lump sum and taking a reduced income.
- Contributions - your employer will contribute (normally with your own payments) enough for the scheme to pay the defined benefit stated.
Review your Final Salary Pension
Contact your scheme administrator to find out about your pension - you'll find out how to on any correspondence, such as your annual statement.
You can also send us a secure message online anytime.
*This is based on our understanding of current taxation, legislation and HM Revenue & Customs practice, all of which are liable to change without notice. The impact of taxation (and any tax relief) depends on individual circumstances.