Member Login 
Your Options At Retirement
At retirement there are multiple ways to take a pension.
Each person and their future plans may be different.
How To Take Your Pension
Your Retirement Account provides benefits once you retire – whether you choose to do so at the standard retirement age (65) or otherwise.
Your Retirement Account can be used to provide one or more of the following benefits, within HMRC limits and (in some cases) subject to the consent of the Trustee
- a pension (annuity purchase)
- a cash lump sum
- drawdown / flexible income arrangement (allowing you to flexibly access your Retirement Account as and when you need it)
If you want to take your Retirement Account as a one-off cash lump sum at retirement, you can do this directly from the Scheme. The options to purchase a pension or a flexible income are facilitated by a range of providers and insurers outside of the Scheme – you can access these options at retirement by transferring your Retirement Account to one of them.
There is a modeller on the member portal, which you can access here www.mybaxipension.co.uk. This can give you an estimate of how much you might receive on retirement under the various options available.
The Trustee has partnered with Hargreaves Lansdown to provide you with guidance as well as annuity purchase options at retirement. The Trustee has also entered into an agreement with Legal & General to give you one possible route for accessing drawdown at retirement. For more information, please see below.
When can you take your benefits from the Scheme?
The Scheme’s normal retirement age is 65. If you do not select a retirement age and are invested in a Lifestyle strategy, the Lifestyle will use a retirement age of 65. Therefore, it is important to let us know if you want to retire at a different age.
You can retire at any time between the age of 55 and 75, although you cannot take your benefits while still being employed by Baxi. You can change your retirement age by accessing the member portal at www.mybaxipension.co.uk or by completing an Investment Decision Form (under Downloads) and returning it to the Scheme Administrator. Note that from 2028, the lower limit of taking benefits will be raised to 57.
More information about your options on retirement
DrawDown arrangement / Flexible income
You cannot utilise a drawdown / flexible income arrangement directly within the Scheme when you reach retirement. However, you can transfer your Retirement Account to a different pension arrangement. Transferring your Retirement Account may allow you to access drawdown or flexible income options, such as a flexi-access drawdown (FAD). With flexi-access drawdown, your Retirement Account remains invested and you can withdraw money from it as-and-when you want, a bit like a bank account. You will need to check with the FAD provider whether there are limits on withdrawals, and whether any charges apply.
If you use your Retirement Account for drawdown or flexible income (including flexi-access drawdown), the Money Purchase Annual Allowance will apply to you from then on. You can find more information on the Money Purchase Annual Allowance in the glossary section.
The Trustee has entered into an agreement with Legal & General to allow you to access flexi-access drawdown by transferring your Retirement Account to the Legal & General WorkSave Master Trust at retirement. This is just an option offered by the Scheme, and it may not be right for you, depending on your circumstances. More information can be found on this below and at the L&G Master Trust Baxi website www.legalandgeneral.com/baxiatretirement
ANNUITY
An annuity will provide you with a regular income (a pension). Most annuities are payable from the date on which you retire to your date of death, but you can also get annuities that pay a pension for a specified length of time. If you decide to buy an annuity, there are a number of different options available.
For example:
- You may choose a pension of a fixed amount, or you may prefer a pension that
increases each year, e.g. in line with inflation. - You may be able to buy a pension with guaranteed payments for a minimum period, for example five years. If you decide to buy a pension with a five-year guarantee and you die before five years’ pension payments have been made, the remainder will usually be paid as a lump sum.
- You may decide to use part of your Retirement Account to buy a pension for your spouse, civil partner or other dependant, payable after your death. The value of pension you can provide for this person(s) will depend on what’s in your Retirement Account, the level of annuity rates when you retire, and the age of your spouse, civil partner or dependant(s).
When buying an annuity, you may also be able to take part of your Retirement Account as a cash lump sum (usually, a maximum of 25%), subject to the consent of the Company. This lump sum is tax free under current legislation.
We have partnered with Hargreaves Lansdown (HL) who can help Baxi members find an annuity provider who suits their requirements. More information about Hargreaves Lansdown can be found below.
CASH
You can take all of your Retirement Account as a one-off cash lump sum at retirement, instead of using it to provide a pension. If you choose this option, 25% of the lump sum
will be tax-free, and the remainder will be subject to tax at your marginal rate of income tax.
If you take your Retirement Account as a one-off cash lump sum when you retire, the Money Purchase Annual Allowance may apply to you afterwards, depending on the circumstances. You can find more information on the Money Purchase Annual Allowance in the glossary section.
HARGREAVES LANSDOWN
We work with Hargreaves Lansdown (HL) to help members of the Baxi Group Pension Scheme get ready for retirement. Hargreaves Lansdown can offer Baxi Group Pension Scheme members a couple of services, such as:
- Annuity quotes provided at 2 months before you reach retirement – essentially helping you understand what your Retirement Account could potentially buy you, in terms of a regular income for life, depending on the provider you choose and the type of annuity;
- Education on various options at retirement – this includes guides as well as educational videos and webinars (check out the Guidance and Education section); and
- A helpdesk that Baxi members can call if they wish to find out more information about options in retirement (at 0117 314 1798.)
You will hear from Buck (the Pension Administrators) when they send you your retirement pack as you approach your retirement. This will include information about your retirement and the options you have available. If you would like additional help or guidance, please contact the Hargreaves Lansdown helpdesk, or alternatively, Pension Wise. More information on your retirement options, Hargreaves Lansdown and Pension Wise can be found in the Guidance and Education section.
One important thing to remember is that your retirement needs are not the same as everyone else’s and that consideration should be given as to which retirement option best suits you. Please note that the Trustee signposts Hargreaves Lansdown’s and Legal & General’s services as options for Baxi members, but you do not have to use them. The Trustee cannot recommend or advise members to use Legal & General or Hargreaves Lansdown. Other options or providers may be more appropriate for you, depending on your circumstances. Please speak to a financial adviser if you wish to receive specific advice on which option is right for you. You can find one in your area at www.unbiased.co.uk. Financial advisers charge for their services, so you may want to ask them to provide a fee estimate at the outset.
LEGAL & GENERAL WORKSAVE MASTER TRUST – AT RETIREMENT
As mentioned above, the Trustee has an agreement with Legal & General. Under this, you can now opt to transfer your Retirement Account to the Legal & General WorkSave Master Trust at retirement to allow you access to flexi-access drawdown. This is just an option offered by the Scheme, and it may not be right for you, depending on your circumstances.
The Trustee has decided to offer this option to members for various reasons:
- The Trustee has secured competitive charges for Baxi members to access flexiaccess drawdown via the L&G WorkSave Master Trust.
- Depending on where your funds are invested at the point of retirement, you may benefit from reduced transition costs by moving to the L&G WorkSave Master Trust (as opposed to an alternative pension arrangement) as the Baxi default investment arrangement (the BGPS Drawdown Lifestyle) and the L&G default investment arrangement both use similar investment funds. As a result, there may be less disinvestment and reinvestment of funds needed as the BGPS investments are already with L&G, and BGPS members who are invested in the BGPS Drawdown Lifestyle would already be partly invested in the L&G Retirement Income Multi Asset Fund, which is the default fund in retirement in the L&G WorkSave Master Trust. The L&G Retirement Income Multi Asset fund is the underlying fund of the BGPS Retirement Income Multi Asset Fund.
- Within the L&G WorkSave Master Trust, Baxi members would also benefit from oversight in retirement from an independent group of trustees who are responsible for ensuring the best interests of all members.
- Baxi members may be able to transfer other DC pension benefits they have (from other employment) into the L&G WorkSave Master Trust too, consolidating all DC pension benefits in one place. Please note, once you start to draw down income or cash lump sums within the L&G WorkSave Master Trust you will no longer be able to transfer in any other pension benefits.
Further information can be found at www.legalandgeneral.com/baxiatretirement
If you have any additional questions regarding the L&G WorkSave Master Trust or to initiate the process of accessing FAD please contact the L&G Mastertrust Pension Access Team on 0345 070 8686. Call charges will vary, and the calls may be monitored or recorded. You can also speak to Buck (the Scheme Administrators) or Hargreaves Lansdown who can help answer any questions on general pensions guidance you might have.
IMPORTANT NOTE ABOUT THE LEGAL & GENERAL WORKSAVE MASTER TRUST: You should shop around to find out what’s best for you. You don’t have to transfer to Legal & General. You have the right to transfer your Retirement Account to one or more other providers instead. Whilst the Trustee has an arrangement to facilitate the transfer of benefits to the Legal & General WorkSave Mastertrust, this is simply to give members who are interested in drawdown an option to consider – it is not a recommendation or an endorsement of the Legal & General WorkSave Mastertrust. The Trustee cannot give you any advice about the choices you make at retirement. If you are interested in moving to any drawdown arrangement, including the Legal & General WorkSave Master Trust, we strongly recommend that you take independent financial advice, to ensure that it is the most appropriate option for you. You can find a financial adviser in your area at www.unbiased.co.uk. Financial advisers charge for their services, so you may want to ask them to provide a fee estimate at the outset.