Has anyone seen this before?

Cap_Scarlet

I have an early retirement / deferred income scheme which works as follows:

I contribute a percentage of my gross earnings to the scheme (currently 6%, rising to 8%). The total contribution is multiplied by a "factor" which gradually reduces over time. This factor more than doubles the contribution.

The scheme pays out over 5 years starting on my 60th birthday. The payout is 7% for the first four years with the balance payable on the 5th anniversary.

I assume this means that - as I am paying in gross - that the receipts will then be taxable?

What would be the best way to avoid / mitigate that tax?

I have seen that Cyprus taxes pensioners at 5% but to be honest I don't really fancy living in Cyprus.

Any other thoughts?