From age 50 (age 55 from 2010) colleagues can take Flexible Retirement. This means you can draw all your benefits from the GMPS while continuing to work for HBOS.
If this option sounds attractive you will need to consider the following:
- You must use all your individual retirement account to either purchase an annuity or take a combination of a tax free lump sum and a reduced annuity. It is not possible to only use part of your individual retirement account.
- However, once you have taken your benefits, you are eligible to rejoin the Scheme for future service and HBOS will still continue to contribute. For a 55 year old that could mean up to another 20 years of Scheme membership and another tax free lump sum to look forward to at the end!
- The pension benefits you receive under flexible retirement are likely to be less than if you'd remained in the Scheme. This is because your individual retirement account will have received fewer contributions, had less time to grow, and the annuity purchased will start earlier and therefore have to last longer.
- All pensions and annuities are subject to income tax. That means if you opt to take your benefits and continue working for HBOS you will be paying income tax on both your pension and regular earnings. Only you will know if you're happy with this but you need to be particularly wary if the extra income from your annuity pushes you into a different tax bracket.
You can also use the HBOS Pension Planner to see the effect of leaving the Scheme at an age of your choosing.
