Taking your pension

Retirement Account is a plan for life and gives you the freedom to pay into your pension and take it in a number of ways when you retire.


How you can take your pension

Unlike some other pensions, Retirement Account offers a range of ways to take your pension when you retire.

If you have an existing Scottish Widows pension and are planning to take your pension or any tax-free cash in less than a year from now, call us to discuss your options.

If you don't already have a pension with us, you can set up a Retirement Account online. We will contact you as you get close to retirement, and our dedicated team will be available to help answer any questions you may have along the way.

How it works

Retirement Account is designed in two parts so you can pay into your pension (Retirement Planning) as well as take an income when you retire (Retirement Income). We have a dedicated team who have helped guide 20,000 customers through their retirement and will be there to support you every step of the way.

Planning for your retirement

You can usually access your pension savings when you reach 55 (this will rise to 57 in 2028). But that doesn't mean this is the right option for you.

You might want to keep working but reduce your hours or go part time. If so, you could leave your pension savings invested until you are ready to retire.


Ways you can take your pension



Take up to 25% of your pension pot as a tax-free cash lump sum, and use the rest to get a regular and guaranteed taxable income for life. This type of income is known as an annuity.

There are different types of annuity that vary how much income you would get. You can usually choose to provide an income for life for a loved one after you die.



Take up to 25% of your pension pot as a tax-free cash lump sum, and keep the rest invested in your Retirement Account, taking taxable withdrawals as-and-when you like.

The level of income you take and any investment growth will be key factors as to how long your pension pot will last.

Learn more about investments in Retirement income (PDF, 660KB) including Investment pathways.



You could close your pension and take either all, or part, of the value of your pot as cash. Normally, 25% of each amount you take is tax free and the rest is taxed at your highest tax rate by adding it to the rest of your income for that year. This is known as encashment.

However, be aware that without very careful planning you could run out of money in your retirement.

Bear in mind that your circumstances can change. When it comes to tax-free cash, the Government's tax rules may change too.

What you should consider

You may already have a good idea on when and how you want to take your pension. However, it's important to think carefully about your situation before deciding.

There are a few things to think about:

  • Your age and health.
  • When you plan to stop work completely, or you decide to continue working part-time for a while.
  • The size of your pension pot and any other savings you (and your partner) have built up.
  • Could you wait to take money from your pension until you really need it, and top up your pension contributions to maximise your savings?
  • When will you get your state pension? - this is usually not until your late 60's, and it might not give you enough for your needs on its own.
  • Whether you still have financial dependants.
  • How much do you want or need to take as an income and how much risk you’re comfortable taking when investing your money.

Contributing after taking your pension

If you have already flexibly accessed a pension and still want to pay into your retirement account, you can. However, how much you can pay is reduced to a maximum of £10,000 each tax year that will attract tax relief as this is the most you can pay without incurring a tax charge. This is known as the Money Purchase Annual Allowance.

Are you in ill health?

If you are in ill health you can take your pension benefits before the age of 55, and may be able to take your whole pension pot as tax free cash. If this is the case, then transferring into a retirement account may not be right for you. If you are in serious ill health, and have been diagnosed with less than 12 months to live, please contact us so we can talk you through your options.

Manage your account

It’s easy to manage online or over the phone.


If you’re transferring £10,000 or more and know how you want to invest your pension pot, then you’re ready. Have to hand the details of the pensions you want to transfer.


Start now >