You’ve contributed to it for many years, but what can you do with your pension pot? When you reach the current retirement age of 55, you’ll be able to access your funds, so it’s important to understand your options:
If you choose to receive your entire pension as a lump sum, you can typically access 25% as a tax-free lump sum, while the remaining 75% will be taxed as income.
With this option, you’ll typically receive a 25% tax-free lump sum. With the remainder of your pension, you can purchase an annuity, which provides an annual income for the rest of your life. With our personal pension accounts, you can use flexible drawdown to take an income from your pot. This income is taxable.
Instead of taking a lump sum, you can simply take a regular income, typically receiving 25% tax-free.
You can access your pension from 55 years old, but it doesn’t mean you have to. You could leave your pension pot untouched and keep contributing until you need it, offering greater growth potential.
By fully understanding your options, you can choose the most suitable for you in retirement.Back to FAQ's