Your options for taking your money
Choosing to take your money from your savings pot is one of life’s big decisions. You’ve worked hard and paid in money over the years, you’ll want to be sure you’re making the right choice so that your future is secure.
You can access your pension savings at any time from age 55, whether or not you’ve stopped working. You can delay taking money from your savings pot. If you get close to your chosen retirement age and decide you want to keep paying in for a bit longer, you can.
Getting help to decide
It’s important you shop around to find the best option for your personal circumstances and income goals. It’s a big decision so it’s worth comparing what each provider can offer.
Pension Wise is a government service from MoneyHelper that offers free, impartial guidance about your defined contribution pension options.
You can also choose to receive personalised advice from a financial adviser. You can find one in your local area at unbiased.co.uk.
If you don’t wish to find your own adviser, we have teamed up with LV= who provide a telephone retirement advice service. You can find more information on the Advice at retirement website.
Advisers usually charge for their services. You may be able to pay for financial advice directly from your savings pot. Ask your financial adviser for details.We can offer you a way of paying your adviser directly from your pension pot, this is called a facilitated adviser charge. The Facilitated adviser charge guide explains how this works.
Personalised telephone retirement advice provided by our partners, LV=, to help you plan your retirement.
Options available to you within your current plan
How will I be taxed?
Take it all in one go
You can take your savings pot in cash as a single lump sum. You do not need to stop working to take this option, but you would need to think about where your income will come from when you do stop working. Read our example case study.
25% of it will usually be tax-free but the rest may be taxed as income.
Take it in a series of cash lump sums
You can leave your money invested and withdraw it as cash lump sums as and when you wish. The money left invested has the chance to grow but it could go down in value too. If you choose this option, you may wish to spread your withdrawals over a number of tax years to minimise the amount of tax you pay. Read our example case study.
Usually the first 25% of each amount you take will usually be tax-free but the rest may be taxed as income.
Take a flexible income
You can usually take up to 25% of your savings pot as a cash lump sum and leave the rest invested to provide a regular income, and occasional lump sums if required. This is often referred to as flexi-access drawdown.
You can vary, stop or suspend the amount you’re taking at any time.
The money left invested has the chance to grow but it could go down in value too. If you take out too much or your investment funds don’t perform as well as you’d expected, you could run out of money before you die. Read our example case study.
You can usually take up to 25% of your savings pot as tax-free cash but the rest may be taxed as income.
Get a guaranteed income
You can usually take up to 25% of your savings pot as a cash lump sum and use the rest to buy a guaranteed regular income for a fixed period or for the rest of your life. This is known as an annuity. Annuities have a number of features, for instance you can arrange for payments to continue to your dependents after your death. Smokers and those in poor health usually get better rates because of their shorter life expectancy. Read our example case study.
You can usually take up to 25% of your savings pot as tax-free cash. Each annuity payment may be taxed as income.
Ready to make a choice
Once you’re ready to take your money and you’ve decided which option (or options) you want to take, you can get in touch for all the information you need and any relevant forms.
Legal & General are here to help so if you have any final questions or you need any more information before you make your decision, just let them know.
When you are 4 months away from your chosen retirement date, Legal & General will automatically send you a ‘maturity pack’ which will give you more detail on the options available to you and what you need to do next.