Taking benefits from your pension pot

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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

*In most cases you can take 25% of your pension fund as a lump sum. The maximum tax free cash you can take across all your pensions is £268,275 unless you have registered for Lifetime allowance protection'

It can be daunting deciding what to do with your pension pot, but it’s an important step to securing your financial future. We strongly recommend that you speak with Pension Wise - a Government Service that offers free, impartial guidance to help you understand your pension options. If you would like us to book you an appointment with them, please call us on 0800 622 323 or you can contact Pension Wise direct or call 0800 138 3944.

Alternatively, you can speak to our Financial Advisers who can help you review all your options and help you make the right choices.

You should be aware that the value of your pension may go down and you may get back less than you invested.

The tax treatment of pensions depends on individual circumstances and may change in the future.

When you contact us we'll explain the advice services we offer and the charges. NFU Mutual Financial Advisers advise on NFU Mutual products and selected products from specialist providers.

Financial advice is provided by NFU Mutual Select Investments Limited.