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Personal pension FAQs

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Is a personal pension right for you?

A pension is a good way of building up a pot of money to live on in retirement, when you may no longer work. If you can wait until you’re 55 to access your savings and you’re comfortable making your own decisions, a personal pension might work for you.

Your money has time to grow and you can continue to contribute until you’re ready to make a decision about how to use your savings. You could also get 20% tax relief on top of the contributions you make and you may be able to claim more from HMRC. Please see our question ‘how much can I save into a personal pension’ for further information. 

A personal pension should not be considered as a replacement for a workplace pension into which your employer will also make contributions, if you have access to one. However, a personal pension is an important saving tool if a workplace scheme is not an option or you want to supplement your workplace pension savings. For example, if you have maxed out your workplace pension and your employer is no longer matching your contributions, or if you want to consider alternative investment options, a personal pension could help you meet your goals. If you want the option to withdraw your money before you’re 55, an ISA may be a better option.

With all pension schemes, your money is invested. In a personal pension, it’s up to you to decide what funds your pension holds. There are risks associated with investing – the value of your investment(s) could fall as well as rise, so it’s important to make sure you’re comfortable with this possibility. 

What income will I need in retirement?

Our retirement planning tool can help you determine how much to pay into your pension to meet your saving goals, but don’t forget your other savings and investments too.

The size of your final pension pot will depend on how much you pay in and for how long, together with how your chosen investment funds perform and the charges you pay. In general, the sooner you start and the more you pay in, the more savings you could have in retirement.
 
If you’re still not sure how much you’ll need, we recommend seeking financial advice. You can find an adviser by visiting unbiased.co.uk. Advisers usually charge for their services.

Will the state pension be enough for me in retirement?

You’re entitled to a basic state pension if you’ve paid National Insurance contributions during your working life. The size of your state pension depends on how many contributions you’ve made. The maximum entitlement is currently based on contributions of 30 years or more. Relying on the state pension alone (which now pays £168.60 per week) may not allow you to sustain your lifestyle in retirement, so it might be worth exploring additional  savings options, such as a personal pension,  that you can combine with your state pension.

For more information, please visit GOV.UK.

How do I open a personal pension?

To be eligible, you must be at least 18 years old and a UK resident.

You can apply for our pension by choosing the level of investment risk you’re comfortable taking, choosing your funds, providing your details and entering the amount you want to invest.

If your application is successful, your money will be invested within one working day. The money will stay invested and your pension will remain open until you decide to close it.

If you’re not sure if a personal pension is right for you, we have other saving options here.

How much can I save into a personal pension?

You can pay in up to 100% (up to £40,000) of your annual salary each year and you can receive tax relief of 20% on top.You may also be able to claim more tax relief directly from HMRC if you’re a higher rate tax payer but do not earn over £145,000. The amount will depend on where you live (if you are in Scotland different tax rates apply) and your income tax bracket. If you earn more than £110,000 in a tax year (and £150,000 when pension contributions are added), your annual allowance may be less than £40,000 and as little as £10,000.

If you don’t use up your full annual allowance in a tax year, you can roll the remaining balance over for up to three years.

You should also be aware of the Money Purchase Annual Allowance (MPAA) – if you have a pension scheme, the annual allowance  (the amount you can contribute each year)  can reduce once you’ve accessed your pension pot and taken your 25% tax-free cash. Furthermore, you will no longer have the option to roll over any unused allowance to later tax years. However, if the first withdrawal is just the 25% tax-free cash lump sum and you do not take any further income, the MPAA will not be triggered and you can continue to contribute (depending on your circumstances) up to £40,000 each tax year and receive tax-relief. MPAA reduces this figure to £4000 per annum but is only invoked when the 75% of the pension pot, subject to PAYE, is touched.

You should also consider the Lifetime Allowance – this is the total amount that can be built up across all pension schemes you belong to without incurring extra tax charges. The Lifetime Allowance is currently £1,055,000 at the time of writing.

For more information on your savings limits and the tax implications, please read our pension tax benefits page.

When and how can I access my pension pot?

You can start withdrawing your money any time after you turn 55. If you‘re ill and unable to work, you may be able to withdraw it sooner.

The first 25% can be taken tax-free; the remaining 75% will be taxed as income. The savings you’ve made don’t always have to be taken as cash, you can use them to buy a guaranteed income for life or a fixed period, also known as an annuity, or leave your money invested.

To take money out, log in to your online account  and send us a secure message with details of how much you want to withdraw. Please note your withdrawal may be subject to tax at an emergency rate.
  
For more information on your options and rights, please visit the HMRC website. If you would like to speak to a financial adviser about your options at-retirement, please visit unbiased.co.uk to find an adviser. Advisers will usually charge a fee for their services.

Do I have to pay money in regularly?

It’s important to save for retirement, so if you can use your annual allowance, it’s a good idea to do so. You can pay in as little as £100 and it’s easy to get started.

We can only accept your initial lump sum payment at the moment but we’re working hard to make regular payments and top ups with lump sums available as soon as possible.  

You can use our retirement planning tool to help you plan ahead and see how much you may need to save to fund the retirement you want.

Can I transfer other pensions into my pension with you?

Unfortunately we don’t accept cash or in-specie transfers into a Legal & General Personal Pension at the moment but we will be offering a cash transfers to us in the near future.
 
Other pension providers may charge if you transfer your plan to another provider. You could also forfeit some other benefits or guarantees if you decide to transfer, so it’s best to check the terms of your existing pension first. If you are in defined benefit scheme, it’s particularly important that you check that implications of transferring out, and consult with an adviser before making any decisions.

You can visit unbiased.co.uk to help you find a financial adviser in your local area. Advisers will usually charge a fee for their services.

Can I transfer a Legal & General Personal Pension to another provider?

Yes, you can transfer your pension to another company. Please speak to your new pension provider so you can follow their process. Please note we do not offer in-specie transfers.

Can I cancel my pension?

You have the right to change your mind within 30 days of your pension being set up. This cancellation date will be shown in your welcome email.
 
To cancel, please log in to your online account and send us a secure message. You’ll get your money back and won’t have to pay any charges. However, the amount you get back will reflect any fall in the value of the fund you were invested in.
 
If you don’t opt out within 30 days, you can still stop paying money in. Your current savings will remain invested and charges will apply.

What can I invest in through my personal pension?

We offer a range of ready-made funds spanning five different risk profiles. All you need to do is select the level of risk you’re willing to take and we do the rest, spreading the money you’ve chosen to invest in the fund across different investments. These can include a combination of markets, industries and asset types. This means you can confidently make your own decisions without having to worry about the underlying investments yourself.
 
You can find the relevant investment information on our site and in each fund’s factsheet or Key Investor Information document.

What investment option is right for me?

To help make investing easier, you can choose how to invest based on the level of risk you’re comfortable taking. Our five ready-made funds all balance risk and reward differently, from lower risk but lower potential returns to higher risk with more potential but great possibility of the value of your investment going down.
 
You can read our page on understanding risk to help you decide. If your attitude to risk changes or you change your mind, you can always invest in one of our other four funds.

How do I change the fund I’m invested in?

Log in to your online account and send us a secure message with details of the fund you want to invest in.

Once you’re logged in, there’s a video under ‘Support’ that can help you with the next steps and how to change your investments.

The value of your pension pot may fall as well as rise, and is not guaranteed. You should choose your funds carefully and review them regularly, particularly  as you get closer to retirement.

How do I change my user ID?

Simply log in to your online account, go to the ‘Update my details’ area and follow the instructions. For your security and ease, we recommend your new ID includes a combination of letters and numbers, and has no more than 15 characters.

How do I change my password?

Simply log in to your online account, go to the ‘Update my details’ area and follow the instructions.

Your password must include at least:

Eight characters
One upper case letter
One lower case letter
One number
One special character from this list:

- _ @ ` # $ % ‘ ? : [ ] { }. 

It can’t be the same as your user ID and we also recommend that you avoid commonly used passwords.

How do I update my email address?

Simply log in to your online account and go to the ‘Update my details’ area. Your current contact details will be displayed and can be updated.

As you use your email address as your user ID, you may want to change this too.

How do I let you know if I’ve changed my name?

Simply log in to your online account, go to the ‘Update my details’ area and follow the instructions.

You’ll be asked to print and post the online form back to us with one of the following documents:

• Marriage or civil partnership certificate
• Deed poll document
• Current valid passport
• Decree absolute or final order of civil partnership dissolution
• Statutory declaration

Once we’ve received your form and documents, we’ll make the change and send confirmation to your contact address. We’ll also return any original documents.

How do I get a benefit statement?

We’ll automatically send you an annual benefit statement  around the time of your pension anniversary. In the meantime, you can log-in to My Account to see the value of your pot and review your investments.

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