Buy-out: how it works

A buy-out is happening because the Scheme has enough money to provide benefits at or above the level that the PPF would provide. The reasons for this include that, when the Scheme started being assessed for the PPF, more members had died, and fewer members were married, than expected.

Find out more about buy-outs and how they work at MoneyHelper.

This funding position means that the Scheme has been able to secure a buy-out with the insurance company, Pension Insurance Corporation plc (PIC) instead of the PPF assuming responsibility for the Scheme.

Being able to secure a buy-out is good news, as most members will get more pension income from PIC than they would from the PPF. Please refer to your letter from March 2023 for more information about changes to your benefits.

The purpose of PIC is to pay the pensions of current and future policyholders. PIC is a specialist insurance company and a leader in the provision of annuities, in bulk, to the members of defined benefit pension schemes. They pride themselves on the quality of their customer service and are acknowledged as a leading company in the UK in this regard. PIC has insured the benefits of more than 300,000 pension scheme members and has a portfolio of approximately £41 billion to back future pension payments. Their past clients include Cadbury, Rentokil, M&S, the Co-Op, BHS, Kingfisher and WPP.

PIC offers a high degree of security and is an insurer that’s amongst the UK’s largest and most secure financial organisations. In a buy-out, you have a contract with them in which they guarantee to pay your benefits.

You can read more about PIC at pensioncorporation.com and they will be sending you more information shortly.

The buy-out completed on 1 August 2023 and PIC have taken over full responsibility for paying members benefits in the Scheme.

The transition to PIC began in mid-2023 and completed on 1 August 2023. You should have received a letter from PIC confirming completion of the buy-out.

As the buy-out completed on 1 August 2023, you’re now an individual policyholder with PIC.

In the same way as a pension paid by the PPF, pension income from an insurance company isn’t affected by changes in investment markets. As part of a buy-out, PIC will commit to provide all future pensions and benefits payable to members.

Under the buy-out, PIC will take over the responsibility for paying your benefits directly to you, along with any relevant death benefits such as a pension for your spouse.

See FAQ 2 for more information on the security of your benefits with PIC.

Buy-out: impact on my pension

As part of the PPF assessment period and buy-out process, Open Trustees was required to review member benefits to make sure benefits had been calculated in line with the Scheme Rules. A broad range of individual elements contributed to the overall benefit review. Some of these elements affected a very small amount of people while others affected most and as a result any changes were unique to each member. We issued letters in March 2023 confirming new benefits and providing details about any changes.

Scheme members who are not yet taking their benefits may have access to a statutory transfer-out option, which PIC will then provide, if applicable.

If you want to consider this, please contact PIC to find out more – contact details can be found here.

If you would like some impartial guidance, or you are thinking of transferring out, you should contact MoneyHelper, on 0800 011 3797 before taking any further action.

No. This is not permitted either by the Scheme Rules or by the law.

You can ask for a retirement quotation from your Scheme administrators, Barnett Waddingham.

Choosing when and how to take your benefits is an individual decision that depends on your particular circumstances. We’re not allowed to give you financial advice. For that, you should to talk to a regulated financial adviser. You can find an adviser near you at MoneyHelper

The Scheme Rules and overriding law allow you to convert benefits into a one-off cash payment in certain circumstances. Your age and total pension savings (in the Scheme and elsewhere) are relevant factors for this purpose, and you must not have started to receive your pension.

If you want to consider this, please contact our administrators to find out more – contact details can be found here.

Lifetime Allowance

If you retired before 6 April 2006, the Lifetime Allowance doesn’t affect you. But if you retire after that date, the Lifetime Allowance limits the total value of all your pension benefits that you can build up. If you go beyond that limit, you have to pay an extra tax charge. For the 2022/2023 tax year, the Lifetime Allowance is £1,073,100 as a lump sum and is now frozen until 2026. That’s equivalent to an annual pension income of £53,655.

Most people don't need to apply for Lifetime Allowance protection. Generally speaking, the Lifetime Allowance has reduced over time, and this protection allows you to keep the benefit of an older, higher version of the Lifetime Allowance. Most people don’t need to apply for this protection because their pension savings are not close to the Lifetime Allowance, so they won’t have it.

You can check whether or not you have protection on the HMRC website . Log in and click ‘Check your existing protection’. If you do have protection, you’ll see confirmation of it while you’re logged in to the HMRC website. Where this applies, please download a copy of the page that tells you the type of protection you have, so you can send it to our administrators.

If you have enhanced or fixed Lifetime Allowance protection – or if you intend to apply for it – and we don’t know about it, an increase to your benefits could result in an extra tax charge. So it’s important that you tell our administrators.

In the Spring 2023 Budget, the Government announced an intention to abolish the Lifetime Allowance which may affect tax limits on your pension benefits in the future. However, at the current time the Lifetime Allowance remains in place.

More information

PIC - now the buy-out with PIC is completed, they will pay the pensions of current and future policyholders. You can find out more about this specialist insurance company that’s amongst the UK’s largest and most secure financial organisations at www.pensioncorporation.com/

MoneyHelper - MoneyHelper offers a broad range of financial guidance and support: you can access free, impartial help about money matters and your pension, find a local financial adviser and use a range of handy calculators and tools www.moneyhelper.org.uk.

Get in touch

Need to update your personal details or have any questions about your benefits? Contact Pension Insurance Corporation:

Call on:

0800 081 7000 (freephone)
+44 (0)121 828 0185 (from abroad)



Write to us:

Pension Insurance Corporation plc
3 Devon Way
Longbridge Technology Park
B31 2TS

New British Steel Pension Scheme member?

If you moved over to the new British Steel Pension Scheme in March 2018 you can find all the information about your scheme here: www.bspspensions.com

New British Steel Pension Scheme member?

If you moved over to the new British Steel Pension Scheme in March 2018 you can find all the information about your scheme here: www.bspspensions.com