Frequently asked questions

What should I think about before accessing my pension pot?

Tax implications
The way you're taxed and how much you have to pay will depend on your individual circumstances, such as any other sources of income or savings you have, and may be subject to change. Read more information about tax and your retirement.
 
How long your money will last
If you take too much money from your pension pot, you may not have enough income to live on for the rest of your life.
 
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 the investments in your pot can go down as well as up.

Providing for any dependents
If you take money out of your pension pot it is considered as 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 dependents should you die before them.

Help and guidance
You can get help and guidance on the Pension Wise website, over the phone or face to face about the steps you need to take to turn your pension pot into income for your retirement:

  • Check the value of your pension pot
  • Understand what you can do with  your pension pot
  • Plan how long your money needs to last
  • Work out how much money you’ll have in retirement
  • Watch out for tax 
  • Shop around for the best deal

If you take too much money from your pension pot, you may not have enough income to live on for the rest of your life.

Where can I find guidance and advice?

Free impartial advice
The Government offers free and impartial advice through a selection of organisations. They can provide tools and calculators to help you, and experts you can chat online with, call or see face to face.

Pension Wise 

View - Pensions Advisory Service 

Money Advice Service    

Financial advice from an adviser
A financial adviser can provide you with a personal recommendation to help you make the right retirement choice, for a fee.

If you don’t have a suitable adviser already, you can find one in your area at View - Unbiased.

You should make sure that they're authorised by the Financial Conduct Authority (FCA) and you can check this on the View - FCA register.

Silverline
If you’re feeling overwhelmed or would like more general support, Silverline can offer information, friendship and advice.

www.thesilverline.org.uk 
Phone:0800 4 70 80 90

Age UK
Age UK offers free and impartial advice on money matters in retirement, including pension options.

View - Age UK website 
Phone:0800 678 1174

Will I pay tax on my pension income?

The income you receive from your pension is subject to income tax. The income tax bands for the tax year 2018/19 are shown below. These are set by the Government and change every year. You can check the latest details or historic tax bands directly at  Income tax rates or with a financial adviser or an accountant.

If your total income from all sources adds up to more than your Personal Allowance you will have to pay tax at the rate shown below.

x
Tax band for 2018/19 Taxable income Tax rate
Personal Allowance Up to £11,850 0%
Basic rate Between £11,851 and £46,350 20%
Higher rate Between £46,351 and £150,000 40%
Additional rate More than £150,000 45%

The tax you pay depends on your individual circumstances. The above examples are based on current law and tax rates and may change. Income tax bands are different if you live in Scotland.

The amount you can earn in a tax year without paying tax is called your Personal Allowance. You’ll only pay tax on income over that allowance. The Personal Allowance drops by £1 for every £2 above £100,000. There is no Personal Allowance where income is higher than £123,700. Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance.

Tax will normally be taken off and paid to HMRC by your pension provider before you receive your income.
 
We use the tax code we get from HMRC to work out how much tax to deduct from your pension.

Do I have to take my State Pension straight away?

No, you don’t have to take the income from your State Pension straight away – you can defer or delay it until you need it. Your pension will automatically be delayed until you start to claim it.

If you do defer the start of your State Pension, it could increase the payments you get when you decide to claim it. For example, the basic State Pension increases by 1% for every 9 weeks you defer, or 5.8% for each complete year.

All State Pension payments are subject to income tax.

How can I access my Legal & General pension pot?

Here's a step-by-step guide to help you access your Legal & General pension pot:

  1. 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 optionspack@landg.com 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.

  2. Once you've decided and told us which option(s) you would like more information on, and you've answered 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.

  3. When we have all of our requirements, we'll action your request and send you confirmation.

What is a lifetime mortgage?

A lifetime mortgage is a loan secured against your home to give you a tax-free sum that  you can take all at once, or in smaller amounts when you need them, up to the full loan amount.

If you take smaller amounts later, a different interest rate may apply to each amount you take, depending on the interest rates available at the time.

Our Lifetime Mortgages are usually repaid from the sale of your home when the last surviving borrower dies, or moves out of their home and into long-term care. 

Find out more

Are there any risks with a lifetime mortgage?

Yes, there are. It's very important to understand the risks as well as the potential benefits of taking out a lifetime mortgage.

  • With both our Lifetime Mortgages, any unpaid interest is added each month to the amount you owe and will increase quickly over time. Interest is charged on the loan plus any interest already added. However there are repayment options, which could help you manage the interest you owe. There may be cheaper ways to borrow money.
  • A lifetime mortgage will reduce an inheritance and reduce the equity left in your home.
  • It may affect your entitlements to state benefits.
  • A lifetime mortgage is a loan secured against your home. Repaying a loan early could mean substantial early repayment charges.
  • If property values fall, then that may affect the equity available to you or your estate.

A lifetime mortgage adviser can explain the features and risks in detail and make a personal recommendation to you.

Why do I need to get professional advice to apply for a lifetime mortgage?

You can only get a lifetime mortgage through a specialist adviser. It's a big decision and they can help you review all of your options. An adviser will explain the features and risks of the product in detail and make a personal recommendation to you.

You can talk to your own adviser or we can put you in touch with The Retirement Lending Advisers, a separate company who only advise on our Lifetime Mortgages. If you use them, they won't charge you an advice fee.

Find out more about what to expect from an adviser in our animation.

What are my options at retirement with a Stakeholder pension?

You can normally take money from your pension pot between ages 55 and 99. The size of your Stakeholder pension pot will depend on a number of things, including how much you contribute, charges and investment returns over the period your contributions are invested.

If you want to stay invested in your plan you can take a maximum of two withdrawals in any calendar year and each payment must be a minimum of £5,000. This is subject to £5,000 remaining invested in your pension pot. Of each payment taken the first 25% will be tax free and the remaining 75% will be subject to income tax.

Or you can take your full pension pot as a cash lump sum. The first 25% will be tax free and the remaining 75% will be subject to income tax.

Or you can take up to 25% of your pension pot as a tax-free cash lump sum and use the remainder of your pot to buy a retirement income, which will be subject to income tax. This can be either for a fixed period of time or for the rest of your life. This is known as buying a pension annuity. You can buy a pension annuity from us or from another provider.
Read more about our annuities here.

There is now greater flexibility on the way that you can access money from your pension pot. These options are explained here.

Who can have a Stakeholder pension?

To have a Stakeholder pension with us, you must be under age 74 and normally a resident of the UK or a Crown servant or the spouse or registered civil partner of a Crown servant. You can start a Stakeholder pension even if you are already a member of an occupational (company) pension scheme. You can also open a Stakeholder pension on behalf of a child. See 'How could my family benefit from a Stakeholder pension?' below.