Leave it for now
You don’t have to take your pension as soon as you reach age 55 (from 6th April 2028, you will need to be 57). If it's right for you, it's fine to leave your pension savings where they are.
Things you need to understand about leaving it for now
You can keep your savings where they are and make a decision when you’re ready. It’s important to regularly review where your pension is invested to make sure it’s still right for you, particularly if your pension is invested in a ‘lifestyling strategy’ option. As you approach retirement, this may move you into lower-risk investments which are not designed for long-term investment.
Please review your investments regularly to make sure they’ll meet your retirement needs and suit your attitude to risk. Some investments, such as cash, are likely to be affected by inflation. The effects of inflation mean that money is unlikely to buy as much in the future as it will today, as the price of goods and services increase.
Manage what you've got
If you’ve got more than one pension plan, you might be able to combine some, or all of your pensions in one place. This could make it easier to manage and might save you money in fees.
Combining pensions isn’t right for everyone. You need to be careful that you don’t lose any guarantees or features, and you should also compare the charges and funds.
You need to make a decision about your pension before you reach 75
It's a good idea to work out what you want to do with your pension before you reach age 75. Some pensions have rules that mean you have to do something with your pension before then.
We’ll get in touch with you before you reach age 75 to let you know your options.
If you don’t tell us what you want to do before you turn 75, all of your pension savings could be used to buy an annuity from age 75. This gives you a guaranteed income for life. But you won't get to take tax-free cash or choose a different option that could suit you better. You also miss the opportunity to shop around for the best deal.
If you die before you reach age 75, your pension will normally be paid tax-free to your beneficiary. They can then choose to take it as an annuity, a lump sum or through beneficiary drawdown.
If you die after you reach age 75, your beneficiary has the same options, but these will be subject to tax.
Choosing how to take your money is a big decision. Pension Wise from MoneyHelper is a free and impartial service that helps you understand your options for using your pension. It’s a government organisation that offers guidance online or over the phone. To find out more or book an appointment visit moneyhelper.org.uk/pensionwise or call 0800 138 3944.
If you’re unsure or need more help to make sure you know which option is right for you, we recommend that you speak to your financial adviser. If you don’t have one, you can visit unbiased.co.uk to find one. Advisers will normally charge for their advice.
Ready to leave it for now?
If you’re happy that you’ve considered all your options and you’d like to leave it for now, you don’t need to do anything. Get in touch if you want to change your retirement age, make any changes to the amounts you’re paying in, or make changes to your investment options.
Have a closer look at your options
You don't have to use just one option. You can combine these options in many different ways to meet your needs. Have a look at our table (PDF, 50KB) to help you compare the options.