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A Step-by-Step Guide to
Retirement Planning

This section helps you to look at your pension savings all together.

Decide your Target Retirement Date

One of the first things to do is to decide roughly when you are likely to want to start accessing your pensions savings. This is called your Target Retirement Date. You can change this at any time but it helps to look at the estimated value of your savings at a certain date.

You can find your Target Retirement Date on your Cheviot pension statement

Gather information about your pension schemes.

The government offers a service to help you trace previous schemes at: This service does not cover personal pension schemes - you will have to write to the provider to get details of your benefits. The provider is usually the insurance company or other financial institution which invests your contributions until you retire.

You can transfer benefits from other pension schemes into Cheviot at retirement to access the new flexibilities.

Work out what types of schemes you have

Some might be money purchase, others might be final salary. You need to consider the benefits differently so make a list of each.

A money purchase scheme is a scheme which provides a fund at retirement rather than a guaranteed income. The level of income is not known and will vary depending on which options you choose. If you choose to access your fund early, it is likely to be smaller. A money purchase scheme is also known as a defined contribution scheme.

A final salary scheme is a scheme which provides benefits based on your salary at retirement or when you left the scheme. The amount of income at retirement is known and will usually increase from the date you leave the scheme to the date you take your benefits. You may have paid contributions to the scheme. A final salary scheme is sponsored by an employer who pays the balance of the cost. Final salary schemes are sometimes called defined benefit schemes. Contact the administrators of your scheme for more information. If necessary use the Government's tracing service.

Your Benefits

Most money purchase schemes will provide annual statements. Some final salary schemes provide a statement when you leave but then do not contact you again until you are close to retirement. You might need to contact some of the schemes to get updated information. Use the relevant form to note the key information.

Defined contribution schemes

You need to list the value of your fund today for each scheme and the projected value at your Target Retirement Date. Projections are only estimates and your fund at retirement might be more or less than the projection. Make a note of the retirement date as it may be different for each scheme. Defined contribution schemes usually allow you to take your benefits from age 55 but this is not always the case.

Final salary schemes

If you have left your final salary scheme, your statement will show what your pension was at the date you left. It may also show (or you can request) an estimate of what the pension will be at your retirement date, whether any benefits are provided for your spouse or dependants and any pension increases. It is really important to check what the retirement date is under the scheme and so when the pension is payable. You may be able to take it early but it is likely to be reduced. If you take it later, then it may be increased.

How much income are you likely to have

Once you have gathered the information, you can use it to estimate how much income you will have in retirement. Remember:

  • Pensions quoted from defined contribution schemes are only estimates – the amount may well be very different depending on market conditions when you retire, how much your funds have grown and when you start accessing your benefit .
  • Pensions from final salary schemes are usually more accurate but you need to make sure that you know when the pension is payable. Taking a final salary scheme pension early can often mean a significant reduction. It is not usually possible to take final salary benefits flexibly.
  • You can consider transferring your final salary benefits to a money purchase arrangement to access the new options but this is not usually in your best interests because you would be giving up a guaranteed level of retirement income. The Government requires you to take independent financial advice before you are allowed to transfer final salary benefits to a money purchase scheme.
  • If you have savings in the With Profits Section you will need to transfer them before you can access them using the new options. But you do not need to take independent advice before you transfer.

The information on this page is provided in good faith but is not legal or financial advice or binding on the Trustee. The trust deed and rules will override in the event of any inconsistency.

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