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Your pension

How it works

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While you were paying into the Fund, you built up a pension that was based on your earnings and your years of membership. 

When you left the Fund (either because you stopped working for Smith+Nephew or when the Fund closed to future accrual), your pension was broadly calculated on that date according to this formula: 

(1/60th x final pensionable earnings) less (1/240th x final band earnings, to take account of any earnings-related State Pension you had built up) x (years of service) 

If you built up service in the Fund before 1 May 1992, then you may have periods of service where a different accrual rate was used to calculate your benefits. 

Your deferred pension has received annual increases since your date of leaving/date of closure, to help protect it against increases in the cost of living.

Additional Voluntary Contributions

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While you were an active member, you might have paid extra contributions, known as Additional Voluntary Contributions (AVCs). Your AVCs will provide you with additional benefits at retirement. 

Any AVCs you paid are invested on a defined contribution basis and you will receive annual statements from the AVC provider. This would be either Clerical Medical, Prudential, Scottish Widows or Utmost Life (formerly Equitable Life), depending on where you chose to pay AVCs.


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Mercer OneView has a retirement calculator that lets you explore your options for taking a pension from the Fund. You can: 

  • Take your annual Fund pension 
  • Take some tax-free cash and a reduced Fund pension 
    You can take your full pension or give up part of it (up to 25%*) for a tax-free cash lump sum.
  • Decide how to take any AVCs you’ve paid
    You can choose to include these as part of your Fund benefits, put them towards your cash lump sum, or take them separately from the Fund and use them to purchase an annuity or take a lump sum with another provider.
  • Take a cash equivalent transfer value (CETV)
    Some members might prefer to transfer the value of their Fund pension to another provider (such as a defined contribution (DC) pension arrangement), where they may be able to take it as more flexible payments or leave it invested. There is more information about pension freedom and choice here. Anyone with DC retirement savings can get free, impartial guidance from Pension Wise to help them decide what to do with their money.

*Subject to a cap of £268,275 for most members

Early retirement

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Currently, in most pension arrangements the earliest date you can start to receive your pension is age 55. Some deferred members of the Smith & Nephew UK Pension Fund have the option to take their pension from an earlier date, age 50 subject to meeting HMRC’s requirements at retirement. Mercer will be able to confirm if this lower ‘protected retirement age’ applies to you.

The government is increasing the minimum pension age to 57 on 6 April 2028. This change will apply to the Fund, but you may still be able take your pension earlier than age 57 – for example, if you are in ill health or you have a protected retirement age of 50 or above. If you think your retirement plans may be affected by these changes, please do contact Mercer for more information about what pension options are available to you.

You can use the online calculator on Mercer OneView to see what an early retirement pension might look like, using different retirement dates. 

When you retire, you’ll receive a pension, which is an income for life. You have the same options shown above, for taking a tax-free lump sum or accessing more flexible benefits. 

Your pension will be reduced because it is paid early and therefore for longer. 

However, if you joined the Fund before 6 November 1987, you may take an unreduced pension at age 60 in respect of: 

  • (for women) pensionable service before 1 June 1995 
  • (for men) pensionable service between 17 May 1990 and 1 June 1995.

Late retirement

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You can choose to retire later than your normal retirement age, but you will need the consent of both the Trustees and the Company. 

Your pension will be increased because it is paid later and therefore is expected to be paid over a shorter period of time.

Tax allowances

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The Lifetime Allowance (LTA) is the total pension savings you can have without paying an extra tax charge. In March 2023, the government announced that the tax charge would be abolished from April 2023, and from April 2024 the LTA will cease to exist. At the same time, the maximum tax-free cash you can take at retirement has been capped at £268,275 (or 25% of the last LTA of £1,073,100) – unless you have an earlier LTA protection (see below).

The LTA was first introduced in 2006 and successive governments have raised or lowered it over that time. Members were able to avoid a tax charge by applying for ‘protection’ from HMRC. If you applied for protection when the LTA was higher than its final level of £1,073,100, you may be eligible to take a higher tax-free cash amount.

There is further information on the LTA here:

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