You're flexibly retired

Did you know?

• You can take flex up to three times

  fully retiring on your final flex

• You reduce working hours when you flex

  but the reduction doesn’t have to match the percentage of your pension you’re taking

• You’ll continue to build your pension

  as you continue to work and earn a salary

An example of a flexed pension

Here's what benefits could look like after a flex, and then when fully retired. Remember, your situation is unique. Flexible retirement enables you to make decisions about when and how you'd like to access your benefits, reduce working hours or fully retire.

• 

  Sam’s first flex at age 60

  Sam’s Retirement Income Builder pension, calculated to the date he flexibly retires, is £13,875. This means he has a full annual pension at age 60 of £13,875 and a one-off, tax-free (up to a limit) cash lump sum of up to three times this amount, at £41,625.

  Sam wants to flex and take 80% of this, which would amount to a pension of £11,100 and a cash lump sum of £33,300.

  As he is drawing some of his pension before the Normal Pension Age (NPA), early retirement reductions will be applied in line with USS rules. This means the total pension he’ll receive at age 60 on taking flexible retirement will be £9,129.30, with a £27,387.90 cash lump sum.

  At the same time, Sam has agreed with his employer to reduce his working hours and salary by 20%.

  He’ll continue to contribute to his Retirement Income Builder pot, based on the 80% of his original hours that he’ll continue to work.

  As he’s chosen to take the full 80% of benefits straight away in his first flex, Sam will fully retire on his next flex.

• 

  Sam flexes to full retirement at 66

  Since flexibly retiring at age 60, Sam has been working 80% of his previous hours. He also took 80% of the £13,875 pension he had built up to that date.

  When he fully retires at age 66 he’ll take the remaining 20% of this, which amounts to £2,775. This will not be subject to early retirement reductions because he’s not bringing it into payment before the NPA.

  Some benefits will also be increased due to Sam bringing them into payment later than age 65, and the amount will have grown each year between the ages of 60 and 66 in line with USS Standard Pension Increases.

  Sam’s pension package when he fully retires will be made up of:

  • The pension he started taking at age 60, plus increases to full retirement at 66: £10,900.86
  • The remaining, unflexed pension at 60 with increases applied until age 66: £3,452.30
  • The pension he built up from age 60 to 66 while he continued to pay in to USS: £4,125

  He could also take a one-off, tax-free (up to certain limits) cash lump sum of three times his unflexed pension and the pension built between 60 and 66, amounting to £22,731.91.

  This brings Sam’s total annual Retirement Income Builder pension to £18,478.16, with a one-off cash lump sum of £22,731.91.