Tax and your pension
The Scheme is registered as an approved occupational pension scheme and this means that membership has important tax advantages.
While you’re an active member:
While you’re a member of the Scheme and paying contributions, you will receive tax relief from the government, making it a cost-effective way of saving for your retirement. The tax relief you get depends on your tax band, but as an example, if you pay basic rate tax at 20%, you get 20% of your contribution from the government.
This means for every £1 you contribute, it will only cost you £0.80p.
This also applies to any Additional Voluntary Contributions (AVCs) that you pay.
When you retire
When you retire, you will have the option to take some of your pension savings as a cash lump sum. This is paid to you tax-free. If you have paid AVCs, you might be able to use these to get more cash tax-free too.
Regular pension payments are treated as an income so may be subject to income tax, but you won’t pay National Insurance.
When you die
Your next of kin might be entitled to a lump sum if you die. Any lump sums that are payable are paid tax-free.