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Your options from age 55

Choosing to take your money from your pension pot is one of life's big decisions. You've worked hard and paid in money over the years. You'll want to be sure you're making the right choice so that your future is secure.

You can access your pension savings any time from age 55, whether or not you've stopped working. You can delay taking money from your pension pot. If you get close to your chosen retirement age and decide you want to keep paying in for a bit longer, you can.

It's important you shop around to find the best option for your personal circumstances and income goals. It's a big decision so it's worth comparing what each provider can offer as you don’t have to stay with this plan and might get a better deal elsewhere. Pension Wise  is a free and impartial service backed by the government who will help you shop around and make sure that the decisions you're making are the right ones for you.

OptionHow will I be taxed

Take it all in one go

You can take your pension pot in cash as a single lump sum. You do not need to stop working to take this option, but you would need to think about where your income will come from when you do stop working. Read our example case study .

25% of it will usually be tax-free but the rest may be taxed as income.

Take it in a series of cash lump sums

You can leave your money invested and withdraw it as cash lump sums as and when you wish. The money left invested has the chance to grow but it could go down in value too.

If you choose this option, you may wish to spread your withdrawals over a number of years to minimise the amount of tax you pay. Read our example case study .

The first 25% of each amount you take will usually be tax-free but the rest may be taxed as income.

Take a flexible income

You can usually take up to 25% of your pension pot as a cash lump sum and leave the rest invested to provide a regular income, and occasional lump sums if required. This is often referred to as flexi-access drawdown.

You can vary, stop or suspend the amount you're taking at any time. You may be charged for varying the amount.

The money left invested has the chance to grow but it could go down in value too. If you take out too much or your investment funds don't perform as well as you'd expected, you could run out of money before you die. Read our example case study .

You can usually take up to 25% of your pension pot as tax-free cash but the rest may be taxed as income.

Get a guaranteed income

You can usually take up to 25% of your pension pot as a cash lump sum and use the rest to buy a guaranteed regular income for a fixed period or for the rest of your life. This is known as an annuity.

Annuities have a number of features, for instance you can arrange for payments to continue to your dependants after your death. Smokers and those in poor health usually get better rates because of their shorter life expectancy. Read our example case study .

You can usually take up to 25% of your pension pot as tax-free cash. Each annuity payment may be taxed as income.

You can choose more than one option and provider
You don't just have to choose one option or provider. You can mix and match your options for each pension pot you have. You can transfer all or some of your pension pot to another provider and have your benefits paid by them.

Taking money from my pension

A guide to taking cash sums and a flexible income from your Legal & General pension pot.

Pension Wise

A free and impartial service backed by the government who will help you make sure that the decisions you're making are the right ones for you.

Investing as you approach retirement

The things to think about when it comes to investing your pension savings in the years leading up to retirement.

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