How do you want to use your pension pot?
When it comes to deciding how to use your pension pot, there’s no one ‘right answer’ as the options you choose will depend on your individual circumstances.
You should now be aware of all the options that are available to you, but before you make your decision you need to make sure that you’re aware of how all the options work. Also, bear in mind that you can combine some or all the options, either at the same time or one after another – giving you complete flexibility to meet your income needs now and in the future.
Remember it’s important to shop around, you don’t have to stay with Legal & General. Different providers may have higher rates of payment, different options, features, qualifying criteria and charges. The options they offer could have different tax implications for you.
Don’t forget, Pension Wise from Money Helper is a government service that offers free and impartial guidance and can help you reach a decision on the best approach for you.
Take a look at the product options we can offer
A flexible income
If you want a flexible income and the ability to keep your pension pot invested so that it may benefit from investment growth, then a Flexi-Access Drawdown product may be for you.
You can choose to take money out when it suits you, there may be a charge for this. How much and how often you take money is up to you, but when you’ve taken it all there’s nothing left.
- Take up to 25% of your pension pot as a tax-free lump sum
- Invest the rest with the flexibility to access the remainder of your pot when you want
- The value of your investment will go up and down. It isn’t guaranteed, so you may get back less than you put in
How does Flexi-Access Drawdown work?
Flexi-Access drawdown is when you choose to move some or all of your pension into drawdown and keep it invested. This may be in the same investments you had for your pension or it could be different investment funds. You can then take money out (drawdown) when it suits you. The more money you take out, the quicker your pot will run out. If you change your mind at a later stage and want a guaranteed income, then you could use whatever remains in the pot to buy an annuity or another suitable product.
A guaranteed income for life
With a Pension Annuity, you will be paid a guaranteed amount every month, or year, for life. So you'll always know exactly how much you're getting.
Pension Annuity Key Features
- Take up to 25% of your pension pot as a tax-free lump sum
- Use the rest to buy a guaranteed regular income for life
- Choices include a fixed or increasing income and how often it’s paid
A guaranteed income for a set period, with no lump sum payment at the end
A Cash-Out Retirement Plan product may provide a tax-efficient way to take cash as a guaranteed income for a set period of time. It can be used as a bridge to a future date when another source of income starts.
At the end of the set period the product ceases, with no further payments made.
Cash-Out Retirement Plan Key Features
- Take up to 25% of your pension pot as a tax-free lump sum
- Use the rest to buy a regular income for a set period of up to 25 years
- The income stops at the end of the set period
A guaranteed income for a set period, with a lump sum payment at the end
If you like the security of a guaranteed income for a set period of time, but want to give yourself options later in life, then a Fixed Term Retirement Plan product may be for you.
At the end of the set period a lump sum is paid to you, that you can then use to make new retirement income choices.
Fixed Term Retirement Plan Key Features
- Take up to 25% of your pension pot as a tax-free lump sum
- Use the rest to buy a regular income for a set period of up to 25 years
- The income stops at the end of the set period
- A lump sum is payable to you at the end of the set period
Need some help?
There are different retirement income products to choose from and the rates they offer can vary. Shop around to make sure you get the best deal for your situation and use available guidance and advice services before you apply. Other providers may have more appropriate products or be able to offer a higher level of retirement income.
Retirement guidance
Pension Wise from MoneyHelper
You can get guidance from the government's free and impartial service to help make your money and pension choices clearer.
The availability of appointments can vary between a few days and several weeks, so if you need guidance, it's a good idea to book an appointment slot now:
0800 100 166
Monday to Friday 9am to 5pm.
Calls may be recorded and monitored.
Speak with us
Our colleagues in Cardiff are always happy to answer your questions or help you apply for a quote.
Coop Member helpline 0345 026 8689
Coop Bank Member helpline 0345 070 1148
Or to find out about our Retirement Advice service call 0808 304 6861.
Monday to Friday
9am to 5pm
Call charges will vary. We may record and monitor calls.
Get financial advice
Financial advisers can give you professional advice for pension planning.
You usually need to pay for their service and in return they recommend how to make the most of your pension given your circumstances.
To find and compare financial advisers please visit their website below.