What are my options?

You have various options when it comes to taking money from your pension pot, some of which will affect you for the rest of your life.

There are three main options when it comes to taking money from your pension pot.  You can choose one, or a combination of these when you come to take your money.

Where customers have a final salary pension, a Guaranteed Minimum Pension, or a pension with a Guaranteed Annuity Rate these are known as Safeguarded benefits. It is important to note that in most cases, these benefits will be lost if you choose any retirement option other than taking an annuity with your existing pension provider. If you’re not sure whether you’ve got one of these pensions you can find out from your most recent annual statement.

You can find more about Safeguarded benefits here.

Before you read more about your retirement options you should speak with Pension Wise, the government’s free impartial guidance service.  You can find out more about Pension Wise here.

Remember: you don’t have to take your retirement benefits with ReAssure.  Always shop around before committing to any option as you may get a better deal elsewhere.

Download our guide to shopping around

Buy a guaranteed income for life

You can usually take a tax-free lump sum from your pension pot and use the rest to buy a retirement income product called an annuity.  Annuities usually pay you a fixed income for the rest of your life.

Take your whole pension pot as a cash lump sum

It’s possible to take all of your pension savings as a cash lump sum, but there can be serious tax implications if you do so.  The first 25% of the lump sum is paid free of tax, but the rest is taxed as income you’ve earned.  This means you could pay 40% or even 45% tax on the majority of your lump sum.

Leave your money invested and make withdrawals when you need to

If you don’t want a guaranteed income for life, and you don’t need all of your pension pot right now, you can leave it invested and take money out when it suits you.  For some people, this can be more tax-efficient than taking everything in one go.

Where can I go to get help?

ReAssure is unable to provide financial advice or make a personal recommendation, but we can provide you with factual information about your policy and your options.

However, there are places you can go for help.

What could these options look like for me?

You can enter your details into the Retirement Planning Toolkit to see how each of these options could look based on your own pension pots and your personal circumstances. If you find an option that meets your needs, you can also find out what you need to do next.