Managing your flexible income

Here's how you can manage your income with our Retirement Account.

It’s good to know:

  • How much you have
  • How much you’re taking out
  • Where you’re investing
  • How to make changes.

What you need to think about and do

Flexible retirement income gives you more freedom, but it also gives you added responsibility. You have to look after your flexible income if you want it to last.

This is where you can find out some of the things you should think about and do.

Where you are now

You’ve accessed your tax-free cash. You’ve still got money in your plan. This means you have flexible options. It also means you have to manage your plan. How much to take, when and how to invest, it’s up to you to choose.

Ted

Bob's story

Meet Bob. He’s 60. He has decided to down his tools and pick up on his hobby – his boat. He wants to take his 25% tax free lump sum to do up and kit the boat out. So that leaves him the rest of his money to enjoy on the water. He will get his State Pension in five years, but he wants to live on more than that. Should he splash out? How much will he need to keep afloat?

Bob's Pension Pot

    • Change the pot size to see how it affects Bob's figures
  • Bob takes his 25% tax free lump sum
    £17,500
  • Left in Bob's Pot
    £52,500

Having flexible income in retirement is all about making decisions

But as long as you have money still in your plan, these are decisions you can change.

What you need to think about

If you want your money to last you need to consider how much of it you take and when. If you take too much, too often, it will run out. You have three options:

  • Flexible income, which you can change
  • Lump sums, which you can take when you like
  • Or, you can leave it where it is.

It’s up to you to choose how your money is invested and whether this choice is right for you. No investments can guarantee growth. So it’s important you regularly review your fund choice with these factors in mind:

  • Potential growth - do you need your investments to grow in order to last?
  • Are you happy with the level of risk you are prepared to take with your investment?
  • Are you comfortable making your own financial choices or would you prefer professional help?

The straightforward selection

We have specially designed five funds for flexible income customers, like you. You can choose one or more based on your attitude to risk:

Pension Portfolio 5

This is designed for customers who might want to take payments over the next two years. It is not designed to keep pace with inflation. Nor is it ideal for investing over a long period of time, or if you want to take a regular sustainable income over a number of years.

All the four other funds invest in a mix of bonds and shares, but in different proportions. As a general rule, the greater the proportion invested in shares, the higher the potential risk and reward. With greater growth potential, comes greater risk.

Pension Portfolio C

With only 30% in shares and 70% in bonds, it has a higher risk than your Pension Portfolio 5 fund, but the lowest risk of the other four options.

Pension Portfolio 4

This has 40% in shares. It’s slightly more cautious than Pension Portfolios A or B, but slightly more risky than Pension Portfolio C.

Pension Portfolio B

This has a half and half mix of shares and bonds. It has less risk and reward potential than Pension Portfolio A, but more so than Pension Portfolio 4.

Pension Portfolio A

With 60% in shares, this has the highest risk and reward potential of your fund choices.

We recommend you read more about these Retirement Account Income funds by downloading Your guide to Retirement Account Investment Options.

A wider choice of funds

As well as the funds we have designed for flexible income customers, you may also choose from other funds from the Scottish Widows pension fund range.

You can find out about these funds by reading Scottish Widows Pension Funds Investor’s guide.

Have a look at how our funds invest by visiting Scottish Widows investment approaches.

What you can do now

Keep up to date with the amount of money you have so you know how much you can take in the future. To find this information:

  • First, look at your last statement
  • Log in or sign up to secure services
  • Call 0345 716 6733. We’re open between 8am and 6pm from Monday to Friday and 9am to 12.30pm on Saturdays. Please have your Retirement Account number to hand when you call us.

If you decide you want to make changes to the amount of income you take, or take a single lump sum, you can do this on the phone.

  • Call 0345 835 6644. We’re open between 8am and 6pm from Monday to Friday and 9am to 12.30pm on Saturdays. Please have your Retirement Account number to hand when you call us.

Important – If you are taking income for the first time this will limit the amount you can save in any plan and receive tax-relief. This is called the Money Purchase Annual Allowance. At the moment, this will limit you to £4,000 a year you can invest in any pension plan.

It’s a good idea to know where your money is invested to see whether it’s the right fund choice for you.

  • First, look at your last statement
  • Log in or sign up to secure services
  • Call 0345 716 6733. We’re open between 8am and 6pm from Monday to Friday and 9am to 12.30pm on Saturdays. Please have your Retirement Account number to hand when you call us.
  • Call 0345 716 6733 and we can make the fund switch for you. We’re open between 8am and 6pm from Monday to Friday and 9am to 12.30pm on Saturdays. Please have your Retirement Account number to hand when you call us.

How Scottish Widows can help you

We have our own team of experienced financial advisers who can work directly with you. Our advisers only make recommendations from Scottish Widows, but they are the experts in what Scottish Widows can do for you. They will first find out about you. Then they will have a careful look at your policies and plans and review your choices. They can give you a tailored recommendation for what you should do next.

For advice from a Scottish Widows Financial Adviser, call 0345 767 8910. One of our consultants will assess your requirements and set up an appointment with one of our advisers.

Although we charge, we like to keep our costs as competitive as possible. Check our charges.

An independent financial adviser can offer you services and products from all providers. Find an independent Financial Adviser (IFA) in your area.

Important

Any decision you make now about where to invest your pension could have a big effect in the future on how much money is in your plan. This could make a difference to how much income you can take from it.

Pensions are a long-term investment. The amount of money you get from your pension plan will depend on a number of factors, including how much is in your plan when you decide to take your money. This isn’t guaranteed. It can go down as well as up. The value of your plan could fall below the amount(s) that were paid in.

Make money work

Get a good understanding of the choices and decisions you can make.

Understand your money

Taking your money

Have you thought about what your plans mean for your retirement income? Our calculators can help you work it out.

Retirement calculators

Pension basics

Whatever stage of the retirement journey you're at, get the basics before you go any further.

Learn about pensions