When it comes to deciding how to use your pension savings, you don’t have to feel restricted, there’s no ‘one’ right answer, retirement is a journey and you may need different options at different points on that journey.

It's important to shop around, as different providers will have different products and charges. Getting quotes from providers will help give you a fuller picture of what your options are, and what they could mean for your money in retirement.

You can access your pension pot from the Normal Minimum Pension Age, which is usually 55 (57 from April 2028), or sometimes earlier if, for example, you’re in ill-health.

Options available to you

If you’re ready to take your income you have four options and you can choose one, or a combination of these:

Take a flexible income

Take a guaranteed income

Take cash lump sums

Leave your money to grow

Your pension savings

25% tax-free

Usually, up to 25% of your pension savings can be withdrawn tax-free (subject to your allowances).

75% taxable

Your remaining pension savings can be used to buy a guaranteed income, moved into a flexible income account (with or without a regular income) or taken as a cash lump sum. These will all be subject to income tax alongside any other income you receive. 

 

 

Ready to start to look at your options?

Read our handy tips to consider before you start taking money from your pension pot and our step-by-step guide on options available to you.

Start now