Why leave it for now?

If you can afford to leave your pension invested, while not guaranteed, it is more likely to lead to a higher retirement income, especially if you’re still working and contributing.

Why could leaving it for now be a good thing?

If you have another source of income or want to support others after you’re gone then leaving your pension invested could be the right choice for you. Leaving your pension invested offers a range of possibilities and we’ll help you understand your options. Here are some of the advantages of leaving it for now:

Stay flexible – You can keep your options open. If you don’t need the money now you can leave your pot invested and take it later.

Top-up your pension pot – By continuing to pay into your pension. You’ll get tax relief on any payment you make and if you’re 55 (57 from 2028) or over you’ll be able to access your money any time.

Support family – When you die, any pot which remains can be passed on. Who receives it is at the discretion of Standard Life. You can let Standard Life know who you would like it to be paid to by completing an expression of wish form. As Standard Life decides who receives the pot, it is normally paid out inheritance-tax free

  • If you die before age 75, payments out will normally be income tax-free.
  • If you die after age 75, payments out will normally be charged income tax at the beneficiary's marginal rate.

Stay invested – Your pension pot will have the opportunity to grow. You could benefit from potential future, tax-efficient growth. This isn’t guaranteed.

The value of your investment can go up or down and may be worth less than what was paid in.

What do I need to think about?

Another source of income – If you choose to defer your pension, you’ll need to carry on working or have other sources of income. You won’t be able to enjoy your retirement income straight away.

No guarantees – You run the risk of investments performing poorly and your pot falling in value.


Flexible income

Flexible income, or drawdown, gives you the freedom to choose your own level of income and the flexibility to suit your personal needs.


Fixed income

Fixed income, or an annuity, is a guaranteed income for life. It’s easy to set up with no fuss after that.


Take cash from your pension

Withdraw cash lump sums from your pension whenever you like. The first 25% is normally tax-free.

To sum up

Flexibility Keep your options open – if you don’t need the money now you can leave your pension pot invested and take it later. Risk of pension falling in value
Investments could perform poorly and your pot could fall in value.
Support family Pass on your pot, normally inheritance tax free, when you die.    
Stay invested You could benefit from potential future, tax-efficient growth.    
Top-up your pension pot By continuing to pay into your pension.    

Tax rules and legislation can change. Any information given is based on our understanding of law and current HM Revenue & Customs practice, as at April 2017. Your personal circumstances also have an impact on tax treatment.

The information provided here should not be regarded as financial advice. If you are unsure you should speak to a financial adviser. There’s likely to be a cost for this.

As with any investment the value of your pension can go up or down and you may not get back what was paid in.

 Are you approaching retirement?

We recommend you seek appropriate guidance or advice to understand your options at retirement. If you don’t already have an adviser, we’re here to help. You will have access to the Government’s free impartial guidance service – Pension Wise – provided through Citizens Advice or The Pensions Advisory Service. Their contact details can be found on the Contact us pages in the links provided. This guidance can be accessed on the internet, by telephone or face to face.