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Your income options

You're already drawing a retirement income with us. But if you have other pension pots that you want to start receiving money from, here are some of the options available.

Get a guaranteed income for life (Pension Annuity)

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With a Pension Annuity, you could be paid a guaranteed amount every month, or year, for life. So you'll always know exactly how much you're getting. Remember that you won't be able to amend any existing annuities.

Pension Annuity Key Features (PDF)

  • Take up to 25% of your pension pot as a tax-free lump sum
  • Use the rest to buy a guaranteed regular income for life
  • Choices include a fixed or increasing income and how often it’s paid

Get a guaranteed income for a set period with a lump sum at the end (Fixed Term Retirement Plan)

If you like the security of a guaranteed income, but want to give yourself options later in life, this may be for you. It ends with a lump sum that you can use to make new choices.

Fixed Term Retirement Plan Key Features (PDF)

  • Take up to 25% of your pension pot as a tax-free lump sum
  • Use the rest to buy a regular income for up to 25 years with a lump sum at the end
  • The income stops at the end of the set period

Get a guaranteed income for a set period (Cash-Out Retirement Plan)

A tax-efficient way to take cash or use as a bridge to a future date when another source of income starts.

Cash-Out Retirement Plan Key Features (PDF)

  • Take up to 25% of your pension pot as a tax-free lump sum
  • Use the rest to buy a regular income for up to 25 years
  • The income stops at the end of the set period

Get a flexible income (Pension Drawdown)

If you don't mind the uncertainty of investment risks, you can choose to move your pension into drawdown. This will mean your pension may benefit from investment growth and you can choose to take money out of it when it suits you. There may be a charge for this. How much and how often you take money is up to you but when you’ve taken it all there’s nothing left.

Pension Drawdown Key Features (PDF)

  • Take up to 25% of your pension pot as a tax-free lump sum
  • Invest the rest with the flexibility to access the remainder of your pot when you want
  • Your money is still subject to investment risk and the amount you have invested can go down as well as up.

How does pension drawdown work?

Pension drawdown lets you keep some or all of your pension savings invested. This may fund you had for your pension or it could be moved to a different fund depending on your personal circumstances. You can then take money out by drawdown when it suits you. The more money you take out, the quicker your pot will run out. If you change your mind at a later stage and want a guaranteed income, then you could use whatever remains in the pot to buy an annuity or another suitable product.

Combine your pension options

You can combine some of these options, either at the same time, or one after another. This approach gives you plenty of control to meet your needs now and in the future

  • Take up to 25% of your pension pot in tax-free lump sums
  • Split the rest as suits your preferences, across different products
  • Build a more structured plan for each stage of your retirement

Cashing in your pension pot

Take up to 25% from your pension pot tax-free. The rest is counted as income in the year you take it, so you need to be careful, otherwise you could end up paying more in tax than you might need to. Ouch!

 

  • Take up to 25% of your pension pot in tax-free lump sums
  • The remainder is treated as taxable income so you need to be careful you don’t become eligible to pay more tax than you might need to
  • You’ll need to consider a suitable home for your pension savings once you’ve taken them all as cash

Leave your pension pot where it is

You don’t have to start taking money from your pension pots straight away. You can leave them invested if you prefer.

  • If you don’t need your pension pot now, you don’t need to take it
  • Leaving your pension pot alone could mean that you have more money over a shorter period later
  • Your pot is still subject to investment risk and the amount you have invested may go up and down

Next steps

It’s worth running some numbers to see what the options might look like for you:

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Need some help?

Making well-informed decisions about how to finance 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.

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Retirement guidance

Pension Wise from MoneyHelper

The government’s free and impartial service, offering guidance to make money and pension choices clearer.

To find out more or book an appointment online click below or call.

0800 138 3944

8am to 6.30pm, Monday to Friday.
Calls may be recorded and monitored.

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Speak to us

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

0808 304 9447

Monday to Friday
9am to 5pm
We may record and monitor calls.

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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.