Let’s compare your pension options

There’s a lot to consider when you look at your options. It’s so important that you choose an option that will fit in with your plans and lifestyle.

Remember, you can mix and match options and normally you will be able to take 25% of the pension tax free before purchasing an annuity or turning it into flexible drawdown.


  Take a flexible income
Buy a fixed income
Take it all as a cash lump sum
Will I get a guaranteed income for life? No Yes No
Can I have regular income? Yes Yes No
Can I keep paying into this pension? Yes Yes No
Can my money grow? Yes No Yes
Can I lose my money? Yes No Yes
Does my pension pay out a lump sum on death?
Yes No No
Can I access my money if I need to? Yes No Yes
Can I access extra money if need be? Yes No No
Can my pension continue to pay an income after my death? Yes Yes No


Some things to consider before choosing an option

  • Is your money invested in the best way to fund your future for as long as you need it to?
  • What tax will you pay on any withdrawals?
  • Will you have enough left to pass on to loved ones?
  • You need to consider the longer-term impact of making withdrawals from your pension pot because your money could run out before you want it to.
  • Your money is still invested, its value can go up or down and you may get back less than you paid in or not have enough to sustain your required income.

Buy a fixed income for life (annuity)

  • It can’t be changed so will it suit you for the rest of your life?
  • Have you shopped around for the best deal in the market?
  • It’s not suitable if you want to pass on your pension pot when you die.
  • What tax will you pay on an annuity income?
  • Do you really need access to all your pension pots right now?
  • Do you have income elsewhere you can use?
  • What tax will you pay on any cash taken out above your tax free allowance?
  • Where will you re-invest it and what are the risks?
  • What impact will inflation have on your spending power over the years?

To access all of these options you may need to move to a different pension product which offers this functionality. Different charges may apply. Transferring will not be right for everyone. There are a number of points to consider, as you could be losing money by giving up any valuable benefits or guarantees that your current plan offers.

Of course, laws and tax rules may change in the future. This information is based on our current understanding in April 2017 and your personal circumstances also have an impact on the taxes you pay.

Access to impartial guidance

We recommend you seek appropriate guidance or advice to understand your options at retirement. You can get free guidance over the phone or face to face with Pensionwise.

Go to www.pensionwise.gov.uk or call 0800 138 3944.

The Money Advice Service (MAS) guide is also available on the Pensionwise site.

Protect against pension scams

The Pension Regulator have provided information to help people protect themselves from pension scammers.

Find out more on The Pension Regulator website.

The Financial Conduct Authority also provide information as well as a helpful warning list of known scammers.

Read more and use the FCA tool on their ScamSmart website.