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.

Start thinking about your retirement

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 have a pension with us, you can set up a Retirement Account online and then call us when you’re ready to take your money.

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 team of dedicated experts who have helped guide 20,000 customers through their retirement and will be there to support you every step of the way.

Your options when you retire

You can usually start taking your pension any time after the age of 55. But that doesn’t mean it’s right for you and so you should consider all your options.

For example, you could carry on working and keep your whole pot invested until you want to reduce your working hours or stop working altogether. At this point you can take your pension in different ways.

When you set up a Retirement Account, we ask you to choose how you’d like to take your pension, so we know how to invest it over time. This means you can leave the investing up to us and, of course, you can always change your mind later.

Ways you can take your pension

Get a guaranteed income for life

Take up to 25% of your pension pot as a tax-free cash lump sum, and use the rest to get a regular and secure 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.

Access it flexibly

Take up to 25% of your pension pot as a tax-free cash lump sum, and invest the rest in a plan from which you can take taxable withdrawals as-and-when you like. This is known as flexible access drawdown.

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

Take it all as cash

You could close your pension and take the whole amount as cash in one go. The first 25% 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 how you want to take your pension. It’s important to go back to basics and think about your situation before deciding.

The option that’s right for you will depend on:

  • Your age and health
  • When you plan to stop or reduce working
  • Whether you have financial dependents
  • How much you want to take as an income and how much risk you’re comfortable taking when investing your money
  • The size of your pension pot and other savings
  • Whether your circumstances are likely to change in the future
  • Any pension or other savings your spouse or partner has, if relevant.

Contributing after taking your pension

With Retirement Account, you can pay into your pension even when you’ve started taking an income. If you’re over 55 and have already accessed your pension pot – for example you’ve taken a 25% tax-free lump sum, a pension income and continue to work – then you’ll get tax relief on contributions of up to £4,000 a year. This is known as the money purchase annual allowance.

Are you in ill health?

If you’re in ill health you can choose to take your pension benefits before age 55. If you are in serious ill health you may be able to take your whole pension pot as tax-free cash. Serious ill health means you have been diagnosed with less than 12 months to live. If this is the case, contact us and we’ll 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 to invest your pension pot, then you’re ready. Have to hand the details of the pensions you want to transfer.