Old-age savings scheme
Old-age savings scheme – A great addition to your other savings
Disbursement
With an old-age savings scheme, you can have your savings disbursed as a lump sum. Once you've retired or reached the earliest possible retirement age, you'll have complete control over the disbursement from your old-age savings scheme, and you can choose to receive it all at once or in several installments. This is why an old-age savings scheme can be a great addition to your annuity certain or whole-life annuity scheme.
Get your pension disbursed at once
With an old-age savings scheme, you’ll receive a lump sum that you can spend exactly how you want.
You won’t get tax relief on the contributions to your old-age savings scheme – but instead, you won’t have to pay taxes on the disbursement. So, what you save up will be yours to keep.
Your age determines how much you can contribute
There are different rules for how much you can contribute to an old-age savings scheme without incurring a charge. The determining factor is how many years you have until reaching state pension age.
If you have more than seven years until state pension age, you can contribute up to per year. If you have seven years or less left until state pension age – or you’re already a state pensioner – you can contribute up to per year.
The contribution limits for an old-age savings scheme apply to your total contributions across all pension companies or financial institutions.
Have you received a pension disbursement?
Please note that if you’ve received a disbursement form a deductible pension scheme, such as a whole-life annuity scheme or an annuity certain scheme, within the last 10 years before your state pension age or later, the disbursement is considered “disqualifying”. This means that you cannot contribute more than per year to your old-age savings scheme – even if you have seven years or less until state pension age.
If your contributions still exceed this limit, you’ll be required to pay a charge of 40 per cent on the excess amount. However, you may transfer the excess amount to an annuity certain scheme or whole-life annuity scheme the following year. Then, your charge will be reduced to 4 per cent.
These rules regarding disqualifying disbursements have been in effect since 1 April 2018 and apply to old-age savings schemes across all pension companies.
Contact us
Do you need assistance?
If you would like to review your pension, make changes to your savings or have other questions about your pension scheme, please contact our Customer Centre.
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