Your pension options

This page introduces the main pension options once you reach 55 years old.

Why compare?


You may already have a good idea which option suits you but it's really worth comparing the features and benefits of each option for added peace of mind.

Once you’ve understood and compared the options, move onto our retirement calculators.

 

Introducing your pension options

Thanks to pension freedoms, from age 55 you can do lots of things with your money. Watch and learn about the options available to you.

4 pension options

You could be paid a set amount every month for the rest of your life, so you’ll know exactly how much you’re getting and when.

  • Take up to 25% tax-free.
  • Use the rest for a guaranteed income.
  • You may be able to combine two or more pension pots.
See annuity options

You can take out what you like when you like. The rest is left invested so it has the potential to grow. If you do make use of flexible access, any future contributions that receive tax relief will be limited to Money Purchase Annual Allowance (MPAA) – currently £4,000 p.a. If MPAA applies, you will need to notify the providers of any other money purchase pension plans you have within 91 days of receiving the cash payment.

  • Take some money tax-free.
  • Leave the rest invested.
  • Take lump sums or income when you need them.
See flexible access options

You can now take all of your pension pot out in cash, however much it is. If you do cash in your pension pot, any future contributions that receive tax relief will be limited to Money Purchase Annual Allowance (MPAA) – currently £4,000 p.a. If, MPAA applies, you will need to notify the providers of any other money purchase pension plans you have within 91 days of receiving the cash payment.

  • Combine the value of your pension pots.
  • Take up to 25% tax free.
  • Get the rest subject to tax.
See take cash options

Keep your money where it is in your pension pot. It’ll give you the time to think about your pension options and you can plan how best to use it to provide for your future. Your pot is left invested so it has the potential to grow.

  • Do nothing now.
  • See how your money could grow.
  • Decide what to do later.
See leave it invested

If you decide to leave your pension pot you could lose any guarantees that might only apply at your selected retirement age.

Reaching age 75

It’s important that you work out what you want to do with your pension before your 75th birthday. Different providers have different rules. You may find that some older rules may still apply to certain pensions and the rules may require you to take your pension benefits before age 75.

Some providers have updated their older contracts to provide greater flexibility but all providers are required to contact you prior to your 75th birthday to confirm the options available to you on any pensions you’ve still to take.

If you don’t provide your instruction by your 75th birthday your pension will be used to buy an annuity automatically. This will give you a regular and guaranteed income for life but you will lose the opportunity to take tax-free cash or an alternative option that may better suit your needs. By missing out on the opportunity to shop around you might also end up with a lower income than might have been available elsewhere.

However, if you plan to leave your pension until after age 75 you should contact your pension provider to ask what options are available.

 

Compare pension options

Take a look at your options using our comparison table.

Important information

The tax treatment depends on your individual circumstances. Your circumstances and tax rules may change in the future.

Pensions are a long-term investment. The retirement benefits you receive from your pension plan will depend on a number of factors including the value of your plan when you decide to take your benefits which isn't guaranteed, and can go down as well as up. The value of your plan could fall below the amount(s) paid in.

Return to: Taking your money

Go back to the taking your money home page to look at a different stage.

Taking your money

Combine your pensions

Got more than one pension? Then you could think about putting them all in one place. Combining your pensions with Scottish Widows is simple and we won't charge you for this service.

Pension transfers

Taking your money

Have you thought about what your plans mean for your retirement income? Our calculators can help you work it out.

Retirement calculators