One of the options available to you is leaving your pension to continue growing.

Keeping your membership

You don’t need to decide what you want to do with your Creative Pension Trust pension savings now. We won’t tell you that you must retire or make you take your benefits – you can tell us when you are ready.

We will remind you of your savings with us and your options for them as you get close to your 65th birthday, or whichever date you have selected as a target retirement age.

This is just one option. Other choices include:

Your choices at retirement are some of the most important financial decisions you will make. To ensure you understand your options and can make the best decisions, you may want to consider seeking financial advice. You can find out more about financial advice and guidance on this website.

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Applies to all our plans

Understanding the options

In this handy video, we have put together an overview of your options for retirement. This can help you understand the choices available to you:

More about leaving your pension to grow

Each retirement option has several details you should know about. It’s important to consider each option carefully to choose what is right for you.

Why might you choose this?

The earliest you can access your pension savings is when you reach your 55th birthday, an age set by the government. Unless you have told us your preferred retirement date, we will assume it to be when you reach your 65th birthday. However, if this isn’t right for you, you can tell us your preferred retirement date using the Creative Pension Trust Member Portal and you can continue to let your pension grow.

There are many reasons why you might want to keep your pension where it is for now. For example, you may:

  • enjoy working and not want to give up your job or change your work arrangements
  • have other sources of income that provide a comfortable amount for you to live on
  • want to carry on taking advantage of your employer’s contributions and any tax relief you qualify for, and future investment growth so you have a bigger pension pot when you really need it

It is important to remember that, on average, someone who is aged 55 today will likely live into their mid-to-late 80’s. This means your pension will likely need to last you a long time.

Choosing to keep your savings in your pension means it won’t have to last as long when you do take it and has a greater opportunity to grow, giving you a more comfortable retirement when you are ready to take your pension.

What happens to your pension savings?

If you choose not to take your pension, it stays where it is and can continue to grow. If you are an active member of the scheme and pay in regularly when you get paid, you can also benefit from your employer’s contributions and you will benefit from tax relief on what you pay in if you currently pay tax on what you earn. You will continue to benefit from any investment growth too.**

**It is important to remember that the value of your investments can go down, as well as up, and you can get back less than you invested.

Will you need to review your arrangements?

Yes, you should regularly review your arrangements and update us of any changes to your information. If you have a preferred retirement age, you can select it using the Creative Pension Trust Member Portal. You can also use it to:

  • Provide us with an up-to-date personal email address, which we need to communicate important updates about your pension to you
  • Decide whether you want us to manage your investments for you or make your own investment decisions
  • Nominate your beneficiaries so we know what you want to happen to your pension savings if anything happens to you
  • Easily consolidate other pensions into Creative Pension Trust to give you a clear view of your total pension savings***

***You should understand the features and charges of other pensions first and seek professional financial advice if you are not sure. Check with your product provider before transferring as there may be a penalty for leaving their scheme.

Are there any other flexibilities?

Yes, because you aren’t making any commitments about your retirement, you retain the flexibility you’ve always had with Creative Pension Trust. You may want to consider:

  • Increasing your contributions so your pot can continue to grow
  • Consolidating other pensions from previous jobs so everything is easier to administer in the run-up to your retirement***
  • Ensure the way your pension savings are invested are appropriate based on when and how you think you might want to retire

***You should understand the features and charges of other pensions first and seek professional financial advice if you are not sure. Check with your product provider before transferring as there may be a penalty for leaving their scheme.

Are there any limits or other considerations?

Yes, there are limits set by the government as to how much you can pay in every year and how much your total pension savings across all your pensions can be without incurring tax charges. You and your employer can save a total of £40,000* tax-free into your pension every year. This is known as the Annual Allowance.

If you pay tax on what you earn, you will receive tax relief on what you pay in up to a maximum of 100% of your earnings or the Annual Allowance, whichever is lower. Any amounts above this cap attract a tax charge. Itis important to note that this reduces to £4,000* if you have begun taking benefits from other pensions you have. This lower limit is called the ‘Money Purchase Annual Allowance’.

The total amount you can save tax-free across all your pensions is known as the Lifetime Allowance. The current cap is £1,055,000*. Benefits above this amount are taxable unless you have made special arrangements for existing large pension pots, known as ‘pension protection’.

*Allowances, limits and tax bands are set by the Government and subject to annual review. All information provided is based on current legislation and HMRC rules, which are subject to change.

Can I access tax-free cash?

No, you will need to review other options if you want to access tax-free cash. If you intend to keep your pension topped up before you retire, you should be mindful that the amount you can pay into your pension each year reduces if you have begun taking benefits from another pension.

Will your money be taxed?

No, until you begin taking money out of your pension you will not be taxed. However, if you continue paying money in, you may benefit from tax relief if you pay tax on what you earn.

Are there income guarantees?

No, not until you decide how you would like to draw your pension benefits.

What happens when you die?

If you die before your 75th birthday, your pension pot will be paid to your nominated beneficiaries, subject to the normal checks. This may be your family and loved ones or even a charity.

You can tell us what you would like to happen by nominating your beneficiaries in the Creative Pension Trust Member Portal. The payment is usually tax-free unless you die after your 75th birthday, in which case tax is paid according to the recipient’s tax position.

An example

You are 55 years old, employed, and your pay falls into the Basic Rate of Income Tax. Your pension pot is currently £10,000 and you pay into your Creative Pension Trust account every time you get paid. Your total regular contribution is £150 per month, with £93.75 coming from your pay and an additional £56.25 coming from your employer.

Because your employer pays into your pension every time you do, and you receive tax relief on your pension contributions because you are a Basic Rate taxpayer, you are able to save £150 per month towards your retirement for just £75. No other savings account is as efficient for your long-term savings as a workplace pension.

Cost to you (credited from your pay packet) £75
Plus your tax relief* £18.75
Total regular saving into Creative Pension Trust £93.75
Plus your employer’s contribution £56.25
Total saved into your pension for your £75 £150

Since you are effectively able to double the value of your contribution every time you pay in, you choose to retire on your 65th birthday. Assuming you maintain the same contribution, this would give you an additional £18,000 to enjoy during your retirement, excluding any investment performance.

*Allowances, limits and tax bands are set by the Government and subject to annual review. All information provided is based on current legislation and HMRC rules, which are subject to change.

Important information about pension investments and retirement:

  • The value of your investments may go down as well as up
  • As with all investments, you may not get back what you initially invested

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