Your retirement is a goal to look forward to. However, if your retirement is to meet your expectations, you will need to plan and secure your retirement income.

Your retirement income and benefits, over and above the basic flat-rate State pension, will in general be provided by either the State Second Pension Scheme (S2P), a personal pension plan, a stakeholder pension scheme or the Local Government Pension Scheme. The four options are described briefly below.

State Second Pension (S2P)

• The State Second Pension (S2P) is an element of State Pension payable in addition to the flat rate Old Age Pension.
• Benefits are paid by the Department for Work and Pensions (the old DSS) and cannot be paid before State Retirement Age.
• Initially, S2P will be an earnings related pension but it is proposed that, from some future date to be decided upon by the Government, it will be changed to begin accruing as a flat rate pension for people under age 45 at the date of the change.

• Various institutions, such as banks, building societies and life assurance companies provide and administer personal pensions and stakeholder pension schemes.
• Your chosen organisation invests your contributions and when you retire the investments are cashed in and the sum of money realised is used to buy retirement benefits from the insurance market.
• Your benefits are therefore based on investment returns and are not guaranteed or linked to your earnings.
• The age from which you may receive them will vary according to the plan, but you may not be able to receive that part which replaces the State Second Pension (S2P) before State retirement age.

• The Local Government Pension Scheme (LGPS) is a statutory, funded pension scheme.
• As such it is very secure because its benefits are defined and guaranteed in law.
• The LGPS is contracted-out of the State Second Pension (S2P) and must, in general, provide benefits at least as good as most members would have received had they been members of S2P.

• A tax-free lump sum when you retire.
• A pension based on your final pay.
• The ability to increase your pension by paying extra contributions.
• Voluntary retirement from age 60.
• Retirement from age 50 with your employer's consent.
• An ill health pension from any age.
• Redundancy cover from age 50.
• A death in service lump sum of two times final pay.
• A widow's or widower's pension.
• Children's pensions.
• The index-linking of benefits to ensure that they keep pace with inflation.