We're delighted that everyone 55 (may be subject to change) and over has control over how they take money from their pension. Pensions are now one of the most tax-efficient and flexible ways to save for the future.
You have flexibility when it comes to accessing your money from your pension at retirement. You should consider your options carefully and choose the one that best suits your plans for retirement. You should also shop around to make sure you get the best deal.
Currently, you can access your pension savings from age 55.
How can you take your money?
You can take cash from your pension savings whenever you want. The first 25% is normally tax free with the rest being taxed as income.
When taking cash from your pension, you should consider, do you really need it now? You may not be making the most of available tax benefits and you need to make sure your money lasts the length of your retirement.
You can choose to take a flexible income, which means using your pension savings to provide a regular income that you can change or stop, at any time. You can dip in and make cash withdrawals at any time too.
Your money stays invested, giving your pension savings the potential to grow, which might help your money last longer. Remember, investments can go down in value as well as up and you might get back less than was paid in.
It’s also important that you keep an eye on how much you take out and what’s left, as your income will stop if your money runs out. Any remaining pension savings may be passed on to your loved ones when you die.
Or, you could choose to buy a guaranteed income for life – also known as an annuity.
Special features can be added to this to meet your needs - such as providing for a loved one when you die. You should consider this carefully because you won’t be able to change providers, cash it in or add special features once it’s set up.
Your pension income is not automatically passed on when you die unless you’ve chosen this as an option.
You may even want to mix and match your choices to suit your plans for retirement.
How can you find out more about these options and which one may suit you?
Visit our website standardlife.co.uk for more information on the different ways in which you can take your money. Use our retirement pathfinder - a quick and easy tool that allows you to explore these different options to see which one may be for you.
How can you find out if you are on track for the lifestyle you want in retirement?
Our handy “how much will I need in retirement?” guide will give you an idea of how much money you'll need to fund your lifestyle, and our retirement calculator will show you how much you are likely to get back based on your retirement savings.
You can register for online servicing to manage your pension online and download the Standard Life app to keep track of your savings on the go. We are here to support you, every step on the way.
We’re ready when you are
We have years of experience under our belt supporting customers like you. We’ve been actively lobbying the government for years to give people more control over their retirement income and we’re ready when you are to take advantage of the increased flexibility.
Remember, you can mix and match flexible and fixed options or keep your money invested and take your benefits at a later date.
*(may be subject to change)Explore your options and use the tool
Access to impartial guidance
We recommend you seek appropriate guidance or advice to understand your options at retirement. If you are aged 50 or over, you can get free guidance over the phone or face to face with Pension Wise, a service from MoneyHelper.
Go to www.moneyhelper.org.uk/pensionwise or call 0800 138 3944.
MoneyHelper guides are also available at www.moneyhelper.org.uk
The value of investments can go down as well as up and you could get back less than was paid in. This includes if you are in drawdown as a portion of your pension remains invested. You need to be comfortable with the level of risk of your investment, which may fluctuate in value frequently and at times significantly.
Sustainability of income
You need to consider the longer-term impact of making withdrawals from your pension pot because your money could run out.More information on other risks
Protect against pension scams
The Pensions Regulator has 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.
Laws and tax rules may change in the future. This information is based on our current understanding in April 2021 and your own circumstances and where you live in the UK also have an impact on the taxes you pay.