Your Benefits at Retirement

About three months before you reach age NRA, the Scheme administrator will send you a statement of benefits and options, as long as we have your home address or email address.

Please help us keep your records up to date - tell us if you change your home address or your email address.

Your statement of benefits and options will clearly set out your pension and tax free lump sum entitlement.

Your entitlement to a fixed or optional tax - free lump sum at retirement is determined by the date you left service, and your options will be clearly set out in the retirement benefits and option statement you receive from the Scheme administrator at the time of your retirement.

In addition, the statement will provide information on: 

• Your pension payments and tax (your pension will be paid monthly in arrears on the last working day of the month). 
• Pension increases after retirement.
• Death benefits after retirement.

If you paid Additional Voluntary Contributions (AVCs) you will have an AVC fund with the Prudential Assurance Company Limited which will provide you with additional benefits.

You can take your AVC benefits at any time from age 55. There are different options including:

1. Buying an annuity.
2. To provide all or some of your BCSSS tax-free cash on retirement (you can only do this if you are taking your BCSSS pension at the same time).
3. Taking the whole of your AVC fund as a cash lump sum, the first 25% will be tax free, and the remaining 75% will be added to your income in the tax year you take it and you will be taxed accordingly.

You don’t have to take your AVCs at the same time as you start to draw your BCSSS pension, you can take both benefits at different times to suit your circumstances.

If you need help deciding what to do you can get help from Pension Wise, a service set up by the Government to provide free and impartial guidance to help you understand what you can do with your AVC pension pot.

To contact Pension Wise call 0800 138 3944 or visit www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

The Lifetime Allowance (LTA) was introduced in 2006, and was a limit on the amount of pension benefits that could be drawn from pension schemes, whether lump sums or retirement income (pension), without triggering an additional tax charge.

From 6 April 2023, the government removed the Lifetime Allowance (LTA) charge and limited the maximum pension commencement lump sum (PCLS) to £268,250 (25% of the LTA in force in 2022/2023), unless individuals hold a valid LTA or PCLS protection.

Members who transferred to one of the Industry Wide Schemes due to privatisation may be entitled to early payment of their BCSSS pension.This will depend on certain British Coal redundancy arrangements which include: 

Ill health early retirement (IHER)

Current contributors

Current contributors to the IWCSSS who are given an ill heath retirement pension from the IWCSSS will automatically become entitled to payment of their deferred BCSSS benefits. Payment will be due from the same date as IWCSSS benefits.

Deferred members 

Deferred members in the IWCSSS who apply for ill heath retirement from the IWCSSS won’t automatically receive payment of their deferred BCSSS benefits. Early payment of BCSSS benefits is separately assessed. 

Redundancy or IHER after taking early retirement from BCSSS 

BCSSS members who take a reduced early retirement pension may later receive unreduced benefits in the IWCSSS due to redundancy or ill health retirement. If so, the BCSSS pension will be increased to the full amount of pension due from redundancy or ill health retirement, calculated at the date of redundancy or the date the IWCSSS pension starts. 

Your first pension payment is taxed using an emergency tax code. Once your first pension payment has been made, details of your pension are sent to HM Revenue and Customs (HMRC) who then provide the Scheme administrator with the correct tax code to use for future payments.

Overseas pensioners are treated in the same way for their first pension payment and will initially pay tax. If you live overseas and do not think you should pay UK tax please contact HMRC; if they agree they will send the Scheme administrator a revised tax code.