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Premier Foods DC Group Pension Plan

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Your options for taking your money

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Choosing to take your money from your pension 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 your selected retirement age, or any time after age 55, whether or not you’ve stopped working. You may be able to access them earlier than this if your original scheme had a protected retirement age, or if you’re in ill health. If you get close to your chosen retirement age and decide you don’t want to take your money yet. You can also delay taking money from your pension pot.

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 as you don’t have to stay with Legal & General and might get better options elsewhere. Pension Wise is a free and impartial service backed by the government who will help you shop around and make sure that the decisions you’re making are the right ones for you. You can book an appointment once you are aged 50 or over.

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.

We’re also here to help so if you have any final questions or you need any more information before you make your decision, just let us know.

When you are 4 months away from your chosen retirement date, we 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.

Option

How will I be taxed?

Take it all in one go

You can take your pension 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 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 pension 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. You may be charged for varying the amount.

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 pension 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 pension 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 pension pot as tax-free cash. Each annuity payment may be taxed as income.

You can choose more than one option and provider

You don’t just have to choose one option or provider. You can mix your options for each pension pot you have. You can transfer all or some of your pension pot to another provider and have your benefits paid by them. However, you may lose your entitlement to any benefits that were protected, such as the ability to combine your defined benefit and defined contributions pots,the ability to access your pot before 55 or a tax-free cash sum greater than 25% of your pot. Please check this before transferring.

The law, tax rates and any allowances may change in the future. These changes could affect the value of your savings, how much you can pay in, or the age at which you’re able to access your money.

How tax works for you will depend on your individual circumstances.

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Taking money from my pension

A guide to taking cash sums and a flexible income from your Legal & General pension pot.

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Pension Wise

A free and impartial service backed by the government who will help you make sure that the decisions you’re making are the right ones for you.

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Investing as you approach retirement

It's important to ensure your pension pot is invested in a way that matches how you plan to take your money.