Time to access your pension

You can usually take 25% as tax-free cash – either as a lump sum or bit by bit in smaller portions. The remaining 75% is subject to tax. It’s not necessary to take cash if you don’t want to, though. The remaining portion of your pension (or all of it if you don’t take 25% tax free cash) can be used to buy an annuity, a flexible income, or taken as cash. Tax will depend on your circumstances, including where you live, and the options you choose. Tax rules can also change in the future.

It’s completely normal to have questions about accessing your pension. Our advisers can walk you through the options available.

This option, also known as an annuity, allows you to use part or all of your pension pot to create a regular income for life. It offers certainty, as you’ll always know how much you’ll receive, but it’s not flexible—once set up, it can’t be reversed. We’ll help you decide if this suits your needs and take care of the process for you. Depending on how long you live you might get back less than you paid in.

Often referred to as drawdown, this option allows your pension to remain invested while you decide how much income to take and when. There’s a lot of flexibility with this option, but there’s a risk of taking too much at any one point and potentially running out of money. We use cash flow forecasts to estimate how long your savings might last and offer tax-efficient guidance to help you manage withdrawals now and in future.

As long as you keep your money in your pension pot, it will still be invested. Like any investment, your pension pot could grow, but the value could also go down.

You can withdraw your pension all at once or in stages. When taking it in one go, the first 25% is normally tax free but on the remainder, you could lose 20%, 40% or even 45% to Income Tax if it pushes you into a higher tax bracket (especially if you’re still earning). We can help you plan how you’ll provide an income for the rest of your life.

It’s your pension, to be used in the best way for you. You might combine guaranteed income with flexibility by using part of your pot for an annuity and the rest for drawdown. We’ll help you find the right mix to suit your retirement lifestyle.

Tax will depend on your circumstances and chosen option. Tax rules may also change over time.

Not ready to access your pension yet? Leaving it invested could allow for further growth—but there’s also the risk your pension savings could drop in value. We’ll help ensure your pension is invested appropriately, conduct regular reviews and make sure your money is working for you until you need it.

You can get advice on retirement at any age – the earlier the better. But remember it’s never too late to put plans in place or discuss your options with a qualified financial adviser. We can look at your situation and recommend which steps to take, based on where you are in life.