Final salary and career average pensions, in more detail

Two dates divide the three stretches. You leave the scheme after your last day of work, unless “You leave the scheme in” names another year. The pension starts at its “From age”, which can come years after you retire.

In the year it starts paying, the pension includes every rise from the stretches before it and takes no rise of its own. From then on it is taxable income, as tax in your plan describes.

A yes to “Still earning it?” adds an amount for each year from the plan’s start until you leave or it starts paying, whichever comes first. Each amount grows with your salary, and the last year of work adds only the part up to your last day of work.

A lump sum set as a multiple is based on the pension actually paid that year, including any rises. It is cash in hand rather than income, so it is not taxed. Unlike tax-free cash from a pot, it never uses the lump sum allowance. “Paid into” names the kind of pot it goes to first, and anything an ISA cannot take follows the order a surplus is saved in.

“To a surviving partner” sets the share that continues after a death. It is paid from the age the pension would have started for the partner who died.