Cash-Out Retirement Plan

Overview

Our Cash-Out Retirement Plan is a fixed term contract that will pay you a pre-agreed regular income over a specified period between 3 and 25 years.

To apply you must be aged between 55 and 85 and have at least £10,000 to invest after you've taken any tax-free cash.

What are the options?

If you choose our Cash-Out Retirement Plan, you can tailor it to meet your needs. The options you choose will determine your income.

What are the options?
Option Description
Tax-free cash You can take up to 25% of your pension pot as tax-free cash sum. If you don't take it at the start of your plan, you won't be able to take it later.
Amount of income or term of your Plan? Choose how much income you want and how often it's paid, and we'll work out how long your plan term will be. Alternatively, choose how long you want your plan to last, and we'll work out how much income you can receive. Once you've decided and started your plan, you won't be able to change these options.
How we pay you?

We can make payments monthly, quarterly, half-yearly, or yearly.

We can pay your income in advance (at the start of the payment period) or in arrears (at the end of the payment period).

For details of the actual amount that you could receive please ask for a quote.

Is it suitable for me?

 

Is the Cash-Out Retirement Plan suitable for me

It may be suitable for you if:

  • You want to withdraw the full value of your pension pot by receiving set regular payments over a period of your choice.

  • You don't want your pension pot to be subject to any investment risk.

  • You want your chosen beneficiaries to receive your income if you die before the end of the term.

  • You want to use your pension pot to provide you with an income for a specific period. For example, to bridge the gap to an alternative such as a final salary pension, or, if you're deferring your state pension, to increase the amount of income it pays you, or so that it pays you a lump sum.

  • You want to take the money out of your pension pot but you would incur a higher rate of income tax by taking it in one go, than if you spread the withdrawal over several years.

It may not be suitable for you if:

  • You want to withdraw cash amounts from your plan as and when you choose.

  • You want a maturity payment at the end of the plan, as once you reach the end of the term the payments will stop.

  • You want to change the amount of income you receive during the plan term.

  • You want an income that lasts for your lifetime and does not end at a set date in the future.

  • You or your partner have certain lifestyle health risks or have been diagnosed with a more serious medical condition(s). This could lead to your income being higher through a product that assesses your health.

  • You could immediately withdraw the full amount from your pension pot and not pay a higher rate of income tax than you'd normally pay. If you're unsure of your income tax position, we recommend that you seek financial advice.

Example Cash-Out Retirement Plan

Molly is 65 and would like to use one of her pension pots to pay for traveling and enjoying the start of her retirement.

She contributes £50,000 from an existing pension plan into a Cash-Out Retirement Plan and chooses a term of five years. We calculate the fixed income Molly will receive is £10,300 each year, and the income will continue to be paid to her beneficiary if she dies before the end of the term.

  1. Fixed income received each year from Molly's contribution:

    £10,300

  2. Plan term:

    Five years

  3. £51,500

    This sum is the total amount due to be paid, over the full term of the plan, before income tax.

  4. These are example figures only. For details of the actual amount you could receive, get a quote online.

Important things to consider

  • You can't make any changes to the plan once it's started.
  • If your circumstances change during the term of the plan, you will be able to cash it in or transfer to another scheme.
  • You'll receive the same income each year with this product. This could mean what your income buys might not be as much in future years as it is now.
  • Plan payments are considered as income, and subject to income tax. This could affect any benefits you claim.
  • The tax you pay on the income from the plan will depend on your individual circumstances and can change. This may affect the income you receive from us.
  • At the end of your plan income will stop.
  • You may be able to get a higher amount of income through a product that assesses your health and offers higher returns for certain lifestyle or medical conditions.

Frequently asked questions

How can I buy a Cash-Out Retirement Plan?

You can apply directly for our Cash-Out Retirement Plan, or a version of this product is available through financial advisers.

What happens when you take out a plan?

When you take out the plan you become a member of the Legal & General Retirement Pension Scheme. This is an Her Majesty's Revenue & Customs (HMRC) UK Registered Pension Scheme.

What happens at the end of my plan?

You don't need to do anything. When your plan reaches its end date it will close and no further payments will be made. We'll write to you to confirm that your plan has closed. If you don't have any other source of income or savings, or you feel you need help, we strongly recommend you seek guidance or financial advice.

Your next steps

Ready to find out more?

You may choose to work through all the product sections below.

Or take a look at

Our Retirement Income Calculator allows you to quickly see what income you might expect from our range of retirement solutions.

Ready to get a quote?

You can get a quote online for any of our retirement products.