Accessing your pension pot - what are your options?
If you're 55 or over and have a defined contribution (money purchase) pension plan, you can:
- Leave your pension pot invested
- Buy a guaranteed income for life
- Take a flexible income from your pension pot
- Take a cash lump sum from your pension pot
- Combine one or more of the options above. You can take cash and/or income at different times to suit your needs.
You may be able to access your pot earlier than age 55 if you're unable to continue working because of ill health.
The information on this page is general information; not all of these options are available on all pension products. You will need to contact your pension provider to find out what options are available under your plan. If you have a Legal & General pension, we can send you a pack with details of the options specific to your plan. For more details, please see How can I access my Legal & General pension pot? below.
It's important to remember that with some options, once you've chosen them, you can't change your mind later.
You should shop around to find the best product to suit your circumstances. It's always worth checking what's available in the wider market as you may get a better deal than the one offered by your existing pension provider. Unless you shop around you won't know.
Transferring to another provider
Different products offer different options so you may need to transfer your pension pot to another pension provider to access some or all of these options.
Depending on the type of pension you have, you may incur charges or miss out on valuable guarantees if you transfer. We recommend you speak to an adviser before taking any action as you may be required by law, or your provider may insist you get financial advice before any transfers can go ahead.
Some things to think about before accessing your pension pot
- Tax implications - The way you're taxed and how much you have to pay will depend on how you access your pot and your individual circumstances, such as any other sources of income or savings you have, and may be subject to change. For further details, please see Pension Freedoms - Your Questions Answered booklet
- Sustainability of income - If you take too much money from your pension pot, you may not have enough left to provide you with a sufficient level of income.
- Investment choice - If you're leaving some or all of your pension pot invested, it's important you consider the funds you're invested in to make sure they're still the right choice for you. The value of your pot that remains invested can go down as well as up.
- Providing for any dependants - If you leave any money in your pension pot, on your death it will usually pass to your beneficiaries free of inheritance tax. If you take money out of your pension pot it forms part of your estate and may become subject to inheritance tax. Taking money out of your pot may mean there isn't enough money left to provide for your dependants should you die before them.
What are your options?
Leave your pension pot invested
Buy a guaranteed income for life (a lifetime annuity)
Take a flexible income (Flexi-Access Drawdown)
Take a cash lump sum
How can I access my Legal & General pension pot?
Here's a guide to ensure you know what to expect from us when you want to access your Legal & General pension pot:
- We'll send you an Options pack if you're approaching your selected retirement date, or you can contact us to request one. This pack gives you details of the options available to you and the associated risks. The pack will also include a Request for Further Information and Risk Warning Questions document. You will need to complete the Risk Warning Questions and send these back to us. Please note that we can only proceed with your request to access your pension pot if you’ve fully completed the Risk Warning Questions. This is a requirement by the Financial Conduct Authority (FCA) to ensure you get the right information to help you make an informed decision.
If you want to request an Options pack, you can either email us at firstname.lastname@example.org or call 0370 060 0784. Call charges will vary. We may monitor and record calls. If you're contacting us by email, please remember not to send any personal, financial or banking information because email is not a secure method of communication.
- Once you've decided and told us which option(s) you would like more information on, and you've completed the Risk Warning Questions, we'll send you a payment pack with details specific to the option(s) you've chosen. You will also receive a Risk Warnings document, based on how you answered the questions in the first stage. You'll need to complete all the relevant documents, including the Payment Instruction Form, and return them to us.
- When we have all of our requirements, we'll action your request and send you confirmation.
You can get guidance from the Government's free and impartial service, Pension Wise: pensionwise.gov.uk
or call 0800 138 3944.
This service also offers guidance over the phone or face to face for customers aged 50 or over.
If you don't have a financial adviser, you can find one at: unbiased.co.uk
How to spot pension scams
Beware of firms claiming to be approved government advisers or trying to persuade you to take money out of your pension. In particular, beware of people contacting you unexpectedly about your pension.
The MAS Guide Your pension: it's time to choose Q46970 (PDF: 668KB) explains this in more detail and how to spot a scam.