Your options for taking your money
You can access your pension savings at your selected retirement age, or any time from the Normal Minimum Pension Age (NMPA), whether or not you’ve stopped working. The NMPA is currently age 55 but this is increasing to age 57 from 2028. 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.
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 as you don’t have to stay with Legal & General and might get better options elsewhere.
Pension Wise is a government service from MoneyHelper that offers free, impartial guidance about your defined contribution pension options. An appointment with Pension Wise is free and will help you understand what your overall financial situation will be when you retire. You can book an appointment once you are aged 50 or over.
Your options under your current plan
Options available to you within your current plan
Things to consider
Take it all in one go
You can take your pension pot in cash as a single lump sum.
- 25% of it will usually be tax-free but the rest may be taxed as income.
- You don't 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.
Buy a guaranteed income (an annuity)
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 dependants after your death.
- You can usually take up to 25% of your pension pot as tax-free cash. Each annuity payment will be taxed as income.
- Smokers and those in poor health usually get better rates because of their shorter life expectancy.
Leave it
You can leave your pension pot where it is. We’ll continue to manage your money in the same way we have been, unless instructed otherwise
- Your money has the chance to grow but it could go down in value too.
- We’ll automatically extend your retirement age by five years. You can still access your pot in this period
- You should review your retirement plans regularly to make sure you’re investing your pot in the most suitable way
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 the Normal Minimum Pension Age (NMPA) or a tax-free cash sum greater than 25% of your pot. Please check this before transferring. The NMPA is currently age 55 but this is increasing to age 57 from 2028.
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.
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 here to help if you have any final questions or you need any more information before you make your decision, just let us know.
Please note that under your schemes rules some of these options may not be available.