Women on laptop

Before accessing your pension pot

Take a few minutes to check out the basics before you get started

Find out how much your retirement income is likely to be. First, you should work out your potential retirement income. Perhaps you'll be receiving the State Pension, a Workplace or Personal Pension or a combination of these. Whichever way, there are several steps you can take to find out what these are potentially worth, from requesting State Pension statements to tracing lost pensions.

  • Do you have more than one pension pot and have you got an idea of how much you have saved?
    Having multiple pensions can make it hard to find the time to manage them. Consolidating them into one place could make it easier for you to see what you have and make decisions based on your combined pension savings.
  • Are your pension savings enough to meet your retirement needs now and in the future?
    You can take a look at ways to prepare for retirement which will help you decide when the best time to retire for you may be.
  • Does your current pension provider offer you a Guaranteed Annuity Rate, a Guaranteed Minimum Pension, or any other valuable benefits?
    If they do, then it would be a good idea to look at these first to see what you would get.
  • Your State Pension
    Find out when you can start receiving the State Pension and how much you will receive.
    • Check your State Pension age
      The State Pension Age Calculator will tell you when your State Pension is payable.
    • Find out how much your State Pension is worth
      Get an estimate of your State Pension at the GOV.UK site.
    • Boost your National Insurance (NI) contributions.
      If you have an NI contribution record of less than 35 years, you won't receive a full State Pension. Find out how to add to your contributions.
    • Find out if you qualify for Pension Credit.
      If you're on a low income, the Pension Credit Calculator can tell you if you're eligible for this benefit.
    • Consider delaying the State Pension
      If you choose to defer your State Pension, it could be higher when you start to take it. Find out more.

It's very likely that you've had several pensions throughout your working life. There are various ways you can find lost and forgotten pensions.

You can trace your pensions by using the Government's Pension Tracing Service and contacting your previous employers and pension providers yourself.

The decision to transfer a pension may not always be a straightforward one. Whilst there can be advantages, there are risks that you need to consider too.

Understanding how your pension benefits will be taxed is an important part of developing your retirement income plan.

You can usually take up to 25% of your pension pot as a tax-free lump sum subject to the availability of any allowances. Tax on income you receive from a pension is then calculated in the same way as any earnings from employment. For most people there’s an annual personal allowance, which means that you can have an annual income of up to £12,570 (2024/25 tax year) that’s not taxed.

Your total income could include:

  • The state pension you get (either the basic state pension or the new state pension)
  • Additional state pension
  • A private pension (workplace or personal)
  • Earnings from employment or self-employment
  • Any taxable state benefits you get
  • Any other income including that received from investments, property or savings.

In England, Wales and Northern Ireland income above this is subject to tax at rates of 20%, 40% or 45% depending on your overall total taxable income. In Scotland it's 19%, 20%, 21%, 42%, 45% and 48% depending on your overall total taxable income.

If you have any further questions around how tax could affect your retirement, you can find additional support on the Money Helper.

If you, or your partner, are receiving, or entitled to state benefits, you may need to declare any money you take from your pension pot to the Government. State benefits include:

  • universal credit
  • child benefit
  • or anything similar where the amount you receive depends on how much you earn or have in savings.

This could have an impact on the level of benefit you’re entitled to.

There are a wealth of benefits available to pensioners. Winter fuel allowance, free bus travel and prescriptions are just a few.

For more information visit the gov.uk website.

There are many advantages to continued employment, whether full or part-time, including topping up your income, keeping active and being able to work flexibly around your lifestyle.

If you start to take money from your pension pot, the amount that can be contributed to your pension in the future before you have to pay a tax charge may reduce. This is known as the Money Purchase Annual Allowance or MPAA.

For most people, the total amount that can be contributed to their pensions each tax year which they'll receive tax-relief on is £60,000. This includes any contributions from your employer. But if you trigger the MPAA, this will reduce to £10,000 a year (tax year 2024/25).

You should also consider how your money will be treated at the time of your death and whether there’s enough money left to provide for your dependants.

With some options your money may be subject to inheritance tax, so it’s important to consider this before you decide.

Inheritance tax

You can pass on assets up to the value of your nil rate band (NRB) without the need to pay an inheritance tax bill. The nil rate band is £325,000 for 2024/25.

If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £500,000 in total, due to the residence nil rate band.

The residence nil rate band (RNRB) is an additional £175,000 which, if the conditions are met, can be combined with the nil rate band of £325,000 giving you a potential combined allowance of £500,000. 

For married couples or those in a civil partnership where the nil rate band and/or residence nil rate band is not fully utilised on first death the remaining threshold passes to the surviving spouse or civil partner so it can be applied against their estate following their death.

For spouses or registered civil partners it can mean up to £1 million to set against their estate. You can only qualify for the full residence nil rate band if the estate is below £2 million. If you have a larger estate, the residence nil-rate band reduces gradually to nil, this is known as 'tapering'.

Further information on unused allowances can be found at Gov.uk.

Beware of scammers. It's now illegal to cold call, so your alarm bells should ring if someone contacts you unexpectedly about your pension.

Be particularly wary of people that claim to be approved government advisers and try to persuade you to take money from your pension. For more information about scams please visit fca.org.uk/scamsmart.

Pension Wise is a free and impartial government service, provided by MoneyHelper. This service is in place to help you understand what you can do with your pension money.

Available if you’re 50 or over, they offer telephone or face-to-face appointments with highly trained professionals. In your appointment you’ll get:

  • Guidance on how to make the best use of your money (they won’t give a recommendation).
  • Information about tax when taking money from your pension.
  • Tips on getting the best option for you, including how to compare products, get financial advice and avoid scams.

The availability of appointments can vary between a few days and several weeks, so if you need guidance, it's a good idea to book an appointment slot now:

Book a Pension Wise appointment

Common questions

You can choose when you want to retire, which is usually 55 (57 from April 2028), as the days of a forced retirement age no longer exist, and more and more people are working longer and taking a gradual approach to retirement. It’s worth considering when you can receive your state pension or private pensions when making a decision. 

The amount you need in retirement depends on what kind of lifestyle you’d like during retirement. You can use our retirement income calculator to see how much your pension pot could get you at 55.

Retirement Income Calculator

Next steps

You've gained a quick overview, above. Let us help you fill in some details.

Women laughing

Need some help?

Making well-informed decisions about financing your retirement is important so it’s worth shopping around and using available guidance and advice, before you buy. Other providers may have more appropriate products or be able to offer a higher level of retirement income.

Pension wise logo

Retirement guidance

Pension Wise from MoneyHelper

You can get guidance from the government's free and impartial service to help make your money and pension choices clearer.

The availability of appointments can vary between a few days and several weeks, so if you need guidance, it's a good idea to book an appointment slot now:

0800 138 3944

Monday to Friday 9am to 5pm.
Calls may be recorded and monitored.

Legal & General Logo

Speak with us

Our colleagues are always happy to help with your questions or to help you apply for a quote.

Unbiased logo

Get financial advice

Financial advisers can give you professional advice for pension planning.

You usually need to pay for their service and in return they recommend how to make the most of your pension given your circumstances.

To find and compare financial advisers please visit their website below.