Approaching retirement

Log in to Manage Your Account and use our retirement planner to plan for your retirement. Or learn more about your options.


You now have even more options when it comes to accessing your pension pot.

Want to know more about your options for taking your money? 

The best place to get information about your options is on your employer’s pension scheme website. If you don’t know where that is, check with your employer. There will usually be a link on your employer’s intranet site.

What should I consider?

As you get closer to retirement, you'll need to consider your options carefully to make sure you make an informed decision on how to make best use of your savings in retirement.

Your pension provider will write to you a few months before your selected retirement age with more information about the options you have but here are some actions you can take now.

Check how much is in your pension pot. Contact your provider for a current valuation. If you're a Legal & General customer log in or register for Manage Your Account to see how your pension is performing.

Find out what you can do with your pension pot. There are a number of options. Take time to think about which options suit you best:

  • Leave your pension pot untouched until you need the money
  • Use some or all of your pot to buy a guaranteed income (annuity) for life or a fixed term - you can usually take 25% of your pot as a tax-free cash lump sum before buying the annuity, which will be taxable at your marginal rate
  • Take a flexible income direct from your pot - you can usually take 25% of your whole pot as a tax-free cash lump sum and the rest as a regular or occasional taxable income 
  • Take a series of smaller sums, usually 25% of each amount taken will be tax-free with the remainder taxed at your marginal rate
    • A combination of the options above, or
    • Take your whole pension pot as cash – usually 25% will be tax free and the rest will be taxable

Your income in retirement is taxed, just like when you're in work. Any money taken from your pot that is not tax-free will be added to your taxable earnings and could increase the rate and amount of tax you pay.

Learn about your options

Plan how long your money needs to last. You need to think about when you'll start taking money from your pension pot and how much you'll need at different times.

Plan when you can retire.

  • Can you afford to be flexible with your retirement age?
  • Will you have enough savings to give up work altogether and live off your savings and pensions?
  • Do you need to consider 'phasing-in your retirement' by working for longer or reducing your hours over a period of time? 

You don't have to give up work to start accessing your pension pot, but the amount you can continue paying into your pension could be reduced.

Work out how much you'll have in retirement. Try to work out how much money you'll have available from your pensions and other sources and whether it will cover your costs. You can use our interactive retirement planner tool to see how much your pension pots might be worth at your expected retirement age. 

Shop around for the best product and option to suit your needs. You don't have to stay with your current pension provider and you could benefit from shopping around and comparing what's available.

Find out about other pensions. If you know you have pensions from previous companies, you can find contact details by using the Pension Tracing Service or get a State Pension forecast.

Review your personal finances. Consider any financial commitments you have, such as a loan or mortgage.

  • Will you be able to pay these off before you stop working?
  • Do you have any other savings or investments?
  • Will you need to rely on them, and do you need to give any notice to access them?

Where can I get help?

The government has a free and impartial guidance service called Pension Wise to help people aged 50 or over to understand the options they have for their pension pot.

PDF file: Your pension - It's time to choose PDF size: 1.32MB  In addition to the free guidance offered by Pension Wise, the Money Advice Service has produced a guide,  that covers your options at retirement, how to shop around and provides other sources of useful information.

If you're still unsure about your options and want help making decisions about your future we recommend that you speak to a financial adviser. You can find one in your local area by visiting Unbiased.  Advisers usually charge for their services.

Accessing your pension pot

Pension legislation allows you to access the money in your pension pot from age 55.

Depending on your scheme you may be able to take cash lump sums, a variable income through drawdown (known as flexi-access drawdown), a guaranteed income under an annuity or a combination of these options.

When thinking about your options, free and impartial guidance is available to you from an independent government service called Pension Wise to help you understand what these mean for you.

You can find out more about your retirement options through our video guide to help you learn the basics.

Pension freedoms video

Transcript: Pension freedoms

Running time:


This is me. Sophie, 63. Grandmother. Retiree.

We’re selling our family home and looking for an apartment in town, which means selling off some of the things we don’t need.

I’ve got two more years before I retire and Jack’s only got one, so we thought we should get ready. It’s all a bit daunting so we spoke to a financial adviser.

The adviser was very reassuring and helped us get a plan of action together. First we worked out how much income we could get from both Jack and my employers’ pension schemes.

This involved thinking about our joint and individual financial commitments and whether we could pay those off before we retire. Luckily we’ve paid off our mortgage, but it’s other things like loans and credit card debt.

Then we looked at our state pensions to see what they’ll provide, and what we needed to live off comfortably.

With no children at home it makes sense to downsize from our house to an apartment because this house is just too big for the both of us, so we could have more money to add to savings.

Next I realised I should consider consolidating all my pensions into one pot. Jack’s been with his employer for quite some time; however I’ve worked for a number of employers over the years and built-up quite a few. Putting them in one pot makes sense for me, and is easier to keep an eye on.

It’s a bit like our bulky record collection– our son’s putting them all on computer for us.

With government changes to how pension pots can be accessed through pension freedom rules introduced in April 2015, I’m glad the adviser was able to talk us through our options.

How Jack and I choose to take our pensions is an incredibly important decision.

These pension freedom rules mean we’ll have more flexibility when we take our money. From 55 anyone with a defined contribution pension can take some or all of the money from their pot as and when they want. We don’t need to stop working to access our pots and we and our employers can continue to make contributions on our behalf. Although the exact options available will depend on what your pension provider will allow.

Increased access also means there are more options available when it comes to taking our money as an income, but drawing large amounts of cash from our pots may push us into a higher tax bracket, or affect our entitlement to certain state benefits.

I can’t stress how vital it was for us to talk to someone before taking any action, as there’s a lot of information to take in and it could be one of the most important decisions we’ll ever have to make. If you don’t want to pay to talk to a financial adviser, you have the option of getting free and impartial guidance from a government backed service called Pension Wise.

Through Pension Wise you can make an appointment to speak to someone face-to-face or over the telephone, or find more information through their website.

There are a number of options when it comes to taking money from our pension pots. These options can be taken separately or combined. We can take some or all of our money as a cash lump sum, take a regular or occasional income from our pots or buy an annuity with the option of some cash.

As Jack retires next year and I’m over 55, we’ve been considering taking some of my pots as cash in one go. If I do this, up to 25% is normally tax-free with the rest taxed as income at my marginal rate.

An interesting option for our plans is to go to Australia to visit our daughter; it’s one I’ll need to consider very carefully. Tax implications and the potential risk that I could run out of money too soon means another option might be more suitable.

If we didn’t take our entire pots I could still withdraw 25% of some or all of my pension pot tax-free whenever I like. I could then take the rest as a taxable income on a regular or occasional basis by using flexi-access drawdown or take it as a taxable lump sum. I could also take a regular income through buying an annuity.

An Annuity provides a regular income when you retire. You can receive this as a taxable income for the rest of your life or over a fixed-term.

If I choose this option how much income I’ll receive depends on a number of factors, including how much money I have to buy one with, how old I am and my health. Annuity rates can vary significantly from one provider to another, so it’s important to shop around for the best deal. Once I commit to an annuity I can’t change my mind, so I’ll need to be sure.

However, I could consider leaving my money invested and taking an income directly from my pension pot as and when I need it. This is called flexi-access drawdown.

Through flexi-access drawdown I can decide how much and how often I’d like to take a taxable income from my pot. I can take my tax-free cash and start, stop or change the amount I want to take from the rest of my pot to suit my needs and tax position, leaving the rest invested. Providers may set a minimum required pot size and may charge a set-up fee, and it’s also worth keeping an eye on your investment as performance will affect how much you have to draw down. Flexi-access drawdown is not risk free, and the value of my pot can fall as well as rise.

If Jack and I decide to continue working we’ll need to consider the impact of any taxable income or lump sums on the total amount of tax we’ll pay.

Now we’ve made a start on retirement I have a lot to look forward to – a new home, and a new life.

For more information on pensions and retirement please visit Pension Wise or call 0800 138 3944, alternatively contact a financial adviser through Please note that advisers usually charge for their services.
Remember, shop around before proceeding with any retirement option and check their availability against your scheme and chosen provider.

You can also use our online tools to get an idea of what income you might receive from your pension savings through our Retirement Planner:

Important information, all investments and funds carry an element of risk. It's important you read your key features and accompanying fund information for full details of all the risks and check what options are available from your scheme and chosen provider.

The value of the investments that make up your pension fund may go down as well as up, and is not guaranteed. It is particularly important to remember this if you are close to taking your benefits.

Any money in your pension plan is tied up until you take your benefits, which is generally available from age 55. The law and taxation relating to the benefits you can take from your pension can change.

Buy an annuity

You can use some or all of your pension pot to buy an annuity, taking up to 25% of the amount selected as tax-free cash.

An annuity will provide you with a guaranteed taxable income for life or for a fixed term depending on the type of annuity you buy.

There are different types of annuities:

  • Lifetime Annuity - will pay you a regular income for the rest of your life.
  • Flexible Annuity - will allow you to vary your income perhaps a larger amount now, and a smaller one later on.
  • Fixed Term Annuity - will provide you with a regular income for a fixed period of time only.

Income from an annuity is taxable and the amount you're offered could vary significantly, particularly if you have any health or medical conditions, or relevant lifestyle factors such as smoking, so it’s important to shop around.

Flexi-access drawdown

Flexi-access drawdown allows you to select some or all of your pension pot and take up to a maximum of 25% of the amount as a tax-free cash lump sum while the remainder stays invested.

You can take regular or occasional amounts as income for the life of your pot. However, a fee may apply.

After taking any tax-free cash, your remaining pot will stay invested in your existing funds (except for pensions invested in a lifestyle profile) until you choose to take money out. You can usually change your investment fund selection at any time, but you should check with your provider.

Staying invested means your pot may benefit from additional investment growth, helping to continue to build your savings while drawing an income.

However, the value of the investments that make up your pension pot may go down as well as up. The value of your pot will depend on investment performance in addition to other factors (such as charges and the effect of inflation), including how much income you choose to take.

The more you take the more likely the savings in your pot may run out. You will need to consider:

  • How much you take out in the earlier years.
  • If contributions are continuing.
  • Charges.
  • How investments perform.
  • What happens if you live longer than expected.

For more information about taking flexi-access drawdown from your pot with Legal & General, please take a look at your scheme documentation.

Cash lump sum

You can take some or all of your pot as a cash lump sum. If you haven't used up all your lifetime allowance, usually 25% of this will be tax-free with the remaining 75% taxable as income. Unless you take your entire pot anything remaining will stay invested until you're ready to access your pot again. Using a pot of £10,000 for example, you could take:

  • £2,500 as a tax-free cash lump sum with the remaining £7,500 taxed as income, or
  • £2,000 each year until your pot runs out. £500 of each £2,000 payment can be tax-free

You could even take £5,000, with £1,250 of it tax-free, and leave the remaining £5,000 invested until you're ready to access more. Other options may be suitable for your individual circumstances.

For more information about taking a cash lump sum from your pot with Legal & General, please take a look at your scheme documentation.

When you’re ready to access your pension pot with Legal & General

Even if you haven't decided which option to choose, whenever you're ready to access your workplace pension pot with Legal & General please contact us for your options pack. This will provide you with more information including your right to shop around and the necessary request forms for you to complete to tell us what you want to do. You will automatically be sent an options pack approximately four months before your scheme (or selected) retirement date.

Things to consider

What are my options for accessing my pension pot?

The best place to get information about your options for your scheme is on your employer pension scheme website. If you don't know where that is, check with your employer. There will usually be a link on your employer’s intranet site.

Learn more about your options including a guaranteed income, flexible income, lump sums and cash.

You can also PDF file: Taking money from my pension PDF size: 339KB  . 

I’m retiring in the near future. Where can I get a retirement quote?

You can request a retirement quote from our Claims team by ringing them on 0370 165 9406.

The team are available 8.30am – 7.00pm Monday to Friday and from 9.00am to 12.00pm on Saturday.

We may record and monitor calls. Call charges will vary.

How much can I save in my workplace pension?

You can contribute up to 100% of your relevant earnings or £3,600 gross, if greater, into your pension plan and still get tax relief.

If your contributions go over the annual allowance including employer contributions (currently £40,000 in the tax year 2019/2020) you will incur a tax charge up to the highest rate you pay.

For those with earnings over £110,000 a year, and £150,000 a year when total pension contributions are included, the annual allowance may reduce below £40,000 but not less than £10,000. Please note it may be possible to carry forward unused annual allowances from up to three previous tax years.

If you have started drawing a flexible income from your pension pot, your annual allowance will reduce to £4,000 a year (this is called the Money Purchase Annual Allowance (MPAA)) and you can't carry forward any unused allowances. If you want to carry on building up your pension pot this may influence when you start taking income. Taking your tax-free cash lump sum without any other income doesn't affect your annual allowance.

Can I transfer in my other pensions?

You may want to consider transferring pots built up with past employers into your current workplace pension scheme.

Here are some reasons why you may wish to do this:

  • You may benefit from lower charges on your contributions.
  • Your existing workplace scheme may be being wound up.
  • You may wish to consolidate all your plans into one, so managing your pension is easier.

Please speak to your current employer about what options are available to you or speak to a financial adviser.

How do I change my contribution amounts?

If your pension contributions come straight from your salary then you need to tell your payroll department about any changes you wish to make to them.

If you pay by your own direct debit simply call us or send us a letter or email, quote your plan number and tell us what you'd like to change your payments to. You can increase or decrease your regular contributions, but you may have to meet a minimum amount. Your employer may also restrict the number of times you can do this in a year.

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

If your scheme allows, you can make changes to your investments by logging in to Manage Your Account. There is a video in the Manage Your Account ‘Help and Support’ section which explains what you need to have decided before you change your investments. You will need to log in to see the video.

You can also make changes by calling us or sending us a request by letter or email. Please make sure you quote your plan number. If you make your request in writing you will need to complete a changing your investments form which you can download from the document library.

Please note - you can't combine a lifestyle profile with any other fund. If you're already invested in a lifestyle profile and want to change your investment, you'll have to switch all existing payments and redirect any future payments to your new fund choice. Likewise, if you'd like to start investing in a lifestyle profile, you'll have to switch all existing payments and redirect all future payments into the lifestyle profile.

Find out more about lifestyle profiles.

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 if you are close to retirement.

Can I cancel my plan?

If you have been automatically enrolled, you can opt out within one month and you’ll get your money back and be treated as if you never joined the plan. Your enrolment communications will explain how to do this. If you don’t opt out by this date you can stop contributing at any time. If you do this, both your contributions and any made by your employer up to that point will remain invested in your pension pot until you take your benefits.

If you have not been automatically enrolled, after you have joined the plan, we will send you a letter containing details of what you will need to do if you decide to cancel and ask for any money back that you have paid. The letter includes a form, called a ‘cancellation notice’. If you decide to cancel, you will need to complete this notice and post it back to us at the address shown on the notice within 30 days of receiving it.

After this period HMRC rules state that your money must remain invested in a pension scheme until you take benefits. For the vast majority of people this will mean that you won’t be able to take benefits until you have reached age 55.

Calculators and tools

Use our calculators and tools to find out what income you might need in retirement and whether you are on track.