I seem to recall that some time ago First Sea Lord, CDS and VCDS all retire on full pay. Has probably changed though. -Cetep
I suspect that you may be thinking of the situation whereby CNS, CGS , and CAS used to be promoted to the relevant five star rank on their last day of service, and given that CDS was a five star rank until 1 April 97. On relinquishing the preceding four posts, five star officers could take a once only option to go for either half pay, or what was known as active list retired pay, which would almost certainly have been virtually the same rate initially. However, these rates would have diverged quite considerably thereafter due to index-linking for active list retired pay, especially since all the officers concerned would all have had getting on for 40 years' reckonable service. So, no contest really.
After 1 April 97, the "problem" would not have arisen, since the only promotion to five star rank since, of which I am aware, was for Lord Guthrie, who was promoted to Field Marshal in 2012, and who will almost certainly have been awarded a variation of active list retired pay.
A long time ago! I recall an Air Chief Marshal declining a promotion to MRAF as he figured the index linked ACM pension would be better than the fixed one of an MRAF, allegedly! - A2QFI
Given the above, I would tend to support the use of the word "allegedly" in this recollection, and would indeed add another A-word, namely "astonished" at anyone declining a fifth star!
Jack