Your pension – your choice

Retirement isn’t just about getting old, it’s an opportunity for more great adventures.

You might be just starting out on your pension journey, a few years from retirement or it might be just around the corner. Either way you’ll want to know what your options are so you can consider some of the things that could be on your horizon.

Your years of saving, plus your employer’s contributions and the benefits of tax relief will all help build up your savings. So make sure you take it in a way that’s right for you.

Our retirement flexibilities allow you to choose how you access your benefits – you can take a combination of income and tax-free cash to suit the lifestyle you want at retirement.

There are two parts of USS that work alongside each other:

Retirement Income Builder

The defined benefit (DB) part of the scheme that guarantees you a pension income when you retire for the rest of your life.

Investment Builder

The defined contribution (DC) part of the scheme where you can build up a pot of money in addition to your DB pension.



How do you know which part you’re in?

When you join USS, you automatically join the Retirement Income Builder. You will then have additional savings in the Investment Builder if you earn over the salary threshold, have transferred other pension savings into USS since October 2016, or made additional contributions on top of your regular monthly contributions.


Your Retirement Income Builder options

The amount of pension you get from the Retirement Income Builder is based on how long you’ve been a member, and your earnings over that time.

But this isn’t all you get – you’ll receive three times your annual pension as a one off tax-free cash payment, which is flexible to dial up or down to suit you.

You can take more or less cash, or no cash at all, and receive a higher or lower pension instead. Some may want to take as much tax-free cash as possible to pay off their mortgage or go on a once in a lifetime trip. Others may prefer to take less cash and increase their pension to treat themselves little and often.

There’s a limit to the amount of tax-free cash you can take – 25% of the value of your Retirement Income Builder benefits and Investment Builder savings combined.

Example*: a member with a £10,000 annual pension would get £30,000 tax-free cash under the ‘standard’ package. They could take more pension by converting their £30,000 tax-free cash into pension. This would give them around £11,600 each year but no tax-free cash.

Or a member may want more tax-free cash and less pension. They could take an additional £20,000 of tax-free cash by giving up £1,100 of their annual pension. This gives a pension of £8,900 each year, plus £50,000 in tax-free cash – within the 25% limit.

Use our benefit conversion tool to estimate the effects of taking more or less tax-free cash on your pension.


Your Investment Builder options

If you have savings in the Investment Builder, you can take these alongside your Retirement Income Builder benefits, or keep them invested if you don’t need them right away. Your options are:

  • Take as much tax-free cash as possible
  • Leave your savings invested, and withdraw up to 4 cash payments each year**. This can also be done from age 55 without having to retire
  • Increase your monthly income by converting your pot into pension***
  • Transfer out to another provider to buy an annuity or use income drawdown.

Any income you receive in retirement will be taxed at your highest marginal rate, so bear this in mind when balancing your cash and pension.


There are also flexibilities around when you can retire.

The normal pension age is currently 65, but you don’t have to retire then.

You can retire early but your benefits will be reduced to last longer or retire later than 65 and build up more benefits – you can even choose flexible retirement.

Read more about these options.


Where do you start?

If you’re looking to retire, you’ll need to contact your employer’s pension team in the first instance, who will then notify us to start the process.

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There’s a lot to consider – take a look at our tools to help support you and your decision making:

  • Our benefit illustrator estimates your future retirement benefits
  • Our benefit conversion tool estimates the effects of taking more or less tax-free cash on your pension (use the estimated ‘standard pension’ from the benefit illustrator)
  • View your current savings in My USS for both parts of the scheme.

*Based on current commutation factors used to convert cash to/from your pension.

**Please read the Taking cash from your USS Investment Builder pot (UFPLS) factsheet for the implications of cash payments.

***Only available at the time of taking your USS Retirement Income Builder.

For a glossary of our terms please see more information on our important terms page.

Published date: 23 May 2019

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You’ll receive three times your annual pension as a one off tax-free cash payment, which is flexible to dial up or down to suit you