Your retirement options

You can usually start to take your retirement benefits at any time from normal minimum pension age (NMPA), even if you're still working. NMPA is currently 55 but is due to increase to 57 from 2028. If your plan has a ‘protected pension age’ it means you have the right to take your retirement benefits from the plan before the NMPA. If you're in ill health, you may be able to take your benefits even earlier.

We can help you make the best choice for you

You can take your pension in a number of ways. We've given these below. It's up to you and we'll help you, whatever you choose.

When you come to take your pension it's a good idea to consider all your financial options.

Check out the options your plan gives you

You can find out what options are available to you when you want to start taking your benefits by reading our Helping you prepare for retirement guide (PDF, 916KB).

Don’t forget to shop around

Other providers might offer you other options or a better deal. Don’t forget to shop around.

Here are your options

Guaranteed income for life (annuity)

Guaranteed income for life (annuity)

  • You can normally take up to 25% as a tax-free lump sum, now.
  • Use the rest to buy a regular taxable income for the rest of your life.
  • If you have an illness or a health condition, you could get a higher income.
  • There are different ways to take a guaranteed income, such as an income that increases each year or one that can continue after your death to a dependant.

Flexible Income (Drawdown)

Flexible Income (Drawdown)

  • You can normally take up to 25% as a tax-free lump sum now.
  • You need to invest the rest in an income drawdown plan. You can take a regular income or lump sums from this plan when you choose. When you do, it will be taxed as income and MPAA will apply. MPAA only starts to apply once you take taxable income from your plan which is in addition to the tax-free lump sum.

Take your pension as one or more lump sums

Take your pension as one or more lump sums

  • For each amount you take, normally 25% is tax free.
  • The rest you take is taxed as income.
  • If your pension is worth more than £10,000 and you take some or all of it as a cash sum, MPAA will apply. If you pension is worth £10,000 or less, you may be able to take all of it as a lump sum without the MPAA applying.
Flexibly accessing your pension can affect what you put in

If you take benefits from a pension flexibly, the amount you (and those paying on your behalf, such as an employer) can pay into your pensions each tax year without paying tax reduces. This is known as the Money Purchase Annual Allowance (MPAA), which is currently £10,000 per tax year.

Have a combination of the above

Have a combination of the above

  • You can also choose more than one option.
  • You might want to get professional advice for this choice. We can help you find this. Get in touch.

Defer it for now

Defer it for now

  • If you don’t need to take your pension savings yet, you can defer it for now. You can keep it invested and make a decision when you’re ready to retire. Check that you won't lose any special features or guarantees that only apply at your selected retirement date.

GET SOME GOOD ADVICE

GET SOME GOOD ADVICE

Before you make any changes to your pension, we strongly recommend you get some professional advice. Speak to your financial adviser. If you don't have one, unbiased.co.uk will help you find one near you. Advisers normally charge for any advice they give.

HOW WE MANAGE YOUR TAX

HOW WE MANAGE YOUR TAX

When you take your pension as one or more lump sums you may pay more or less tax than expected. This is because we'll use the tax code we have for you, and if we don't have one, we may use an emergency tax code. To make sure you pay the right amount of tax, you need to contact HM Revenue & Customs (HMRC). Tax treatment depends on your individual circumstances. Your circumstances and tax rules may change in the future.