Case studies

Here are your results based on these filters.

  • Defined contribution pension pot of
  • Other retirement income of
  • Savings (excluding pensions) of
  • Examples of
Back to results


We’re using my pension to help us enjoy our retirement.

Sanjay, 66, is married and has a defined contribution pension pot of £24,000. He also has final salary pension income of £27,500 per year, and is receiving his full State Pension. They have £100,000 of savings but rent their home.


What Sanjay wants

I want to withdraw all of my pension pot so I can decide what to do with it and when. I’m comfortable knowing we have enough to live on from my final salary pension and State Pension.

Sanjay's idea

I’m going to take all the money from my pension pot as soon as I can but I don’t want to go into the 40% tax bracket, so I’ll spread it over three years.

What Sanjay does

  1. Sanjay takes one quarter of his pension pot as a tax-free cash sum of £6,000

  2. He uses the rest to buy a fixed term annuity over 3 years

  3. He'll receive £6,090 a year for 3 years, payable annually in arrears each year for the term

  4. By withdrawing his pot in stages he stays in the same tax band and pays £1,218 a year income tax on the regular income from his fixed term annuity

What Sanjay gets

Tax-free cash £6,000
Fixed term annuity £6,090 a year, subject to tax

See how we worked this out

  • State Pension age65
  • State Pension£8,767
  • Pension pot£24,000
  • Other income£27,500
  • Other savings£100,000
  • Rental cost£7,500

Sanjay's calculation

Personal allowance (0% tax)

Earnings from £0 to £12,500
Basic rate allowance (20% tax) Earnings from £12,501 to £50,000
State Pension £8,767 a year
Final salary pension £27,500 a year
Fixed term annuity income £6,090 a year
Total income (subject to tax) £42,357 a year

Important things to consider

  • Sanjay withdrew his pension pot in the quickest time possible while staying in the basic rate tax bracket

  • The income Sanjay receives from his fixed term annuity is a fixed amount for 3 years. As a result, the effect of inflation will reduce the buying power of his income over the term of the plan

  • Sanjay has chosen to guarantee the income from his fixed term annuity. This means that if he dies before the end of the fixed term, his wife, as named beneficiary, will continue to receive the income until the end of the plan term

  • Once the fixed term annuity is set up and the cancellation period has expired, he may not be able to cancel or change his options

  • Better deals may be available so it’s important to shop around

  • Tax payable on the income will be taken off before it is paid out

  • This example is based on current law and tax rates. These may change in the future and income tax will depend on individual circumstances

  • If you live in Scotland or Wales you may have a different income tax rate or band

  • The State Pension amount shown here is the current maximum and is only an example. The amount you get depends on your National Insurance contributions’ record and your individual circumstances. You can get a State Pension forecast by visiting View - Check your State Pension 

Back to results