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Taking Benefits From Your Pension Pot

There are several ways to take money from your pension pot, and you can start doing this from the age of 55 (57 from 2028).

There are lots of things to consider and whatever decision you make, you don’t have to stop working to start taking your benefits – it’s up to you.

New regulations mean that from the age of 50, all customers will receive information at least every five years to remind you where you can go for pension guidance and advice. Find out more about the options available to you [PDF: 733KB].

Remember, if you die before the age of 75, any money left in your pension pot can be passed onto your beneficiaries usually tax free.

If you die after 75 – money taken out is added to the beneficiaries' other income and is subject to Income Tax. 

Here are some of your choices to consider, but before making your decision we recommend you take financial advice:

  • Take a tax-free lump sum from your pension pot and keep the remainder invested
  • Move into flexi-access drawdown and take a taxable income by withdrawing money on a regular or ad hoc basis
  • Buy an annuity – this is an income for life
  • Take all your pension pot as one lump sum, 25% will be tax-free and the rest taxed as income
  • Take regular or ad hoc lump sums – 25% of each payment is tax-free and 75% is taxable
  • Or you can mix your options

It can be daunting deciding what to do with your pension pot, but it’s an important step to securing your financial future and our Financial Advisers can help you review all your options and help you make the right choices.