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Receive your pension from the Scheme

At a glance

The Pensions Regulator believes, for most members, it’s likely to be in their best financial interests to take a pension from the Scheme. If you choose to take a pension from the Scheme, you’ll have:

  • A pension at retirement providing a regular, guaranteed income for life
  • Tax-free cash – the option to exchange part of your pension for a tax-free cash lump sum (usually up to 25% of your total pension value). This would result in you receiving a smaller monthly pension
  • Yearly increases to parts of your pension, in line with the Scheme rules to protect against increases in the cost of living (inflation)
  • A pension for your eligible dependants on your death, based on a percentage of your pension, in line with the Scheme rules
  • A lump sum payable to one or more of your eligible dependants (determined by the Trustee) if you die within 5 years of retiring, in line with the Scheme rules

Sally’s choice

For Sally, a pension that could provide a regular income for life for her, and her husband Jim if she died first, and which provided protection against future increases in the costs of living, gave her the peace-of-mind she needed. So, she decided not to transfer out of the Scheme and took the Scheme pension.

Sally’s choice is just an example and does not suggest a particular option that you should choose yourself. Please look at all of the options available to you and consider seeking independent financial advice before making any decisions about your own benefits.

Why this option might suit you

Here is a list of characteristics that this option provides or doesn’t provide. Have a look through and see if these characteristics suit your personal circumstances. For example, is the reassurance of a regular income for the rest of your life a priority or would you rather withdraw money as and when you need to?

The reassurance of a regular income for life YES Taking your pension from the Scheme gives you the reassurance of a regular income paid, normally monthly, to you for as long as you live, a bit like your salary is now.

This is particularly useful if:

  • your Scheme Pension is going to be your main source of income in retirement
  • you appreciate the security and predictability of a set, regular income
  • you cannot afford to, or don’t want to, take risk
Pension increases to protect against inflation YES(FOR SOME ELEMENTS OF PENSION) Parts of your Scheme pension may increase in value each year to protect you against increases in the cost of living (inflation). By this we mean as the cost of things like fuel, bread, milk etc. go up, so does your pension income.
A pension for my eligible dependant on my death YES Your Scheme pension will provide an income to your eligible dependant when you die, giving additional reassurance for you and your loved ones.
Leaving an “inheritance” NO You will receive a pension for eligible dependants as outlined above. If you die within the first five years of retirement, a lump sum will be paid equivalent to the remaining pension instalments which would have been paid for those five years (without increases).
Something easy to manage YES Super easy, you don’t have to do anything, your pension will be paid to you regularly, just like your salary is now.
Money to use now YES In exchange for a reduced regular income from the Scheme, you can take up to 25% (one quarter) of the value of your pension as a tax-free cash lump sum when you retire.
The flexibility to change my income when I like / need NO There is very limited flexibility to change your pension from the Scheme once you retire – only the annual increases changing the amount you receive.
The ability to invest my money myself NO There is no option to manage any investments
Suitable if I expect to live a long time YES Definitely. Your Scheme pension will be paid to you for as long as you live.

It’s worth noting that on average (based on national figures from the Office for National Statistics) we’ll live until our mid-80s. However there’s a 1 in 4 chance you’ll live in to your 90s and 3 in every hundred people retiring now will live to be 100 years old.
Tax
Tax-free cash lump sum

  • You can take some of your Scheme pension as tax-free cash (up to a maximum permitted by HMRC)
  • The amount of the tax-free cash lump sum depends on the terms offered by the Scheme
 Income (subject to tax)

  • Your annual income will be taxed at your marginal rate of income tax for that year
  • As your pension income is stable, you can expect to pay a similar level of tax each year (subject to any other income you have)
The contract for the advice would be between you and Origen and the advice provided is confidential. It is your choice whether to use Origen. The Trustee and Aptia (formerly Mercer) are not responsible for any advice you receive or any decisions you make, or actions you take, as a consequence of receiving advice.
Built on behalf of the The First Bus Retirement Savings Plan by Willis Towers Watson. The information
  • is a summary of the applicable law and the Scheme’s trust deed and rules as at May 2021
  • is not a definitive statement of the applicable law or the Scheme’s trust deed and rules and is not legally binding
  • does not constitute financial advice or create any entitlements for members (or anyone else) in relation to the Scheme
In the event of any discrepancy between the information on this website and the applicable law and / or the Scheme’s trust deed and rules, the applicable law and / or the trust deed and rules will prevail.
You should not rely on the information on this website alone and you should consider seeking independent advice before making any decisions in relation to your pension savings (but noting that the Scheme, the Trustee and WTW are not responsible for any advice you receive or any decisions you make or actions you take as a consequence of receiving advice). The applicable law is likely to change over time, and so you should also keep an eye out for any developments which may affect you as you approach retirement. By continuing to use this website you’re accepting its purpose and any limitations.
External links and external content are selected and reviewed when the page is published. The Scheme, the Trustee and WTW are not responsible for the content of external websites. The inclusion of a link to an external website should not be understood to be an endorsement of that website or the site’s owners (or their products/services). Copyright © 2024 Willis Towers Watson. All rights reserved.
© 2024 The Scheme is governed according to the provisions of its formal Rules as well as applicable law. Material on this Portal provides commentary on pension developments for general information and in relation to your pension in the Scheme Material on this Portal also summarises the Rules and some applicable law. However, this Portal is not intended to replicate the Rules and to the extent that any material on the Portal contradicts the Rules, the provisions of the Rules will always take precedence. The material on this Portal is based on the Trustee’s understanding of tax and other legislation in force as of June 2024.