We pay the benefits you have built up to your date of leaving immediately. You cannot defer payment of your benefits. Your benefits are not reduced for early payment.
Your benefits are not enhanced to your normal pension age; the benefits that you have built up to the date that you leave are paid. For example, you have built up an annual pension of £4,000. If your benefits come into payment because of redundancy, £4,000 annual pension is paid. If you voluntarily retire, it would be reduced for early payment.
Your employer can award you up to £8,344 extra annual pension. This is an employer discretion. They will have a policy about this. You can ask them about their policy.
If you paid additional pension contributions (APCs) for extra or lost pension, reductions apply on the pension that you purchased.
Exit cap payment and further reforms
The exit payment restrictions that were introduced by the government in November 2020 were revoked on 12 February 2021. It was concluded that the restrictions had unintended consequences. The government have stated:
- it is still vital that exit payments deliver value for the taxpayer,
- employers should always consider that exit payments are fair and proportionate, and
- HM Treasury will bring forward proposals at pace to tackle unjustified exit payments.
If you think this could affect you, please contact your employer.