What are my retirement options?
A tax-free lump sum
You can normally take up to 25% of your pension pot as a tax-free lump sum. Taking anything more than this will be taxable and will be added to any other income you receive. This could push you into a higher tax band.
What you do with the rest is up to you – you have different options. For example, you could take what's left in your pot all in one go as a lump sum, or take it as a flexible income. Or you could use it to buy a guaranteed income (an annuity). You can do this at the same time as you take your tax-free lump sum or at a later date.
Flexible income that lets you take money as and when you need it
Taking a flexible income means you can either set up a regular income or take money from your plan whenever you want. You choose how much you take. Anything left in your pot stays invested. Remember, the value of your investments can go down as well as up and you could get back less than you paid in.
Regular income that pays a guaranteed amount (an annuity)
You can use some or all of the money in your pension pot to buy an annuity. This gives you a guaranteed income for the rest of your life or for a set period of time. Once you’ve bought an annuity, you usually can’t change your mind.
How much income you get will vary based on things like your health and lifestyle, annuity rates in the market, and your age when you buy it.
All your pension money in one go
You could take your whole pension pot as one lump sum if you want to. Normally 25% can be paid as a tax-free lump sum and the rest will be taxed as income. This could push you into a higher tax band. The tax you pay will depend on your tax band.
Leave your pension money where it is
You can usually start accessing your pension savings from age 55 (or 57 from 6 April 2028) but if you don't want to take your pension savings yet, you don't need to do anything. You can leave them invested until a time that's right for you.
You don’t have to go for just one option – you can choose a combination
If you’re not choosing to get a guaranteed income, it’s important to carefully plan how much money you take from your plan. If you take too much too soon, you risk running out of money in retirement.
Remember, pension money remains invested until you take it, which means the value can go down as well as up and you could get back less than was paid in.
We’re here to help you – call us on 0345 070 4060
When you’re thinking about taking your pension savings, you can call us to talk through your options and the retirement support available to you.
We’re open Monday to Friday, 8.30am to 5.30pm excluding bank holidays.
Frequently Asked Questions
Do I have to take my pension savings at my retirement date?
No, the retirement date on your pension plan isn’t a deadline. You don’t have to do anything with your pension savings when you reach that date if you don’t want to.
You can leave your pension savings where they are until you’re ready to take them. But remember they remain invested and can go down in value as well as up.
Can I just take my tax-free cash and leave the rest for now?
Yes you can but you need to move or ‘transfer’ to a different pension first. This is because your Phoenix Life plan is an older type of pension that wasn't designed to offer this option.
You can transfer into a plan with any provider – including Standard Life, who are part of the Phoenix Group. We can give you more details about how we can help with transfers.
Remember, it’s important to shop around to find a provider that’s right for you.
Can I transfer my pension and is there a charge?
Yes you can transfer to a plan with any provider - including Standard Life, who are part of the Phoenix Group. You may also be able to transfer other plans you may have.
There may be a cost to transfer your plan. This is usually capped at 1% of your plan’s value, depending on the type of plan you have and when you choose to transfer.
If you’re invested in with-profits funds and transfer before the retirement date on your plan, a market value reduction may apply. We can give you more details about this.
Remember, its important to shop around to find a provider that's right for you.
How much tax will I need to pay if I cash in all my pension as a lump sum?
The first 25% is usually tax-free and the rest is treated as income. This means you normally pay income tax on it. How much tax you'll pay depends on your income tax band. Taking all your pension as a lump sum could push you into a higher tax band. We can help you understand the amount of tax you might need to pay.
Can I take just take tax-free cash and leave the rest for now if I am invested in with-profits funds?
Yes you can take tax-free cash but you need to transfer your existing Phoenix Life pension to a different plan first. You won't be able to remain in your with-profits funds when you transfer to a new plan. There may be an exit charge for doing this. A market value reduction could apply depending on when you take your money.
We can give you more information to help you decide what to do.
What retirement support does Phoenix Life offer?
We’ll help you understand your pension plan and your options. We can also explain how to find further help.
If you're looking to take a flexible income or just your tax free cash, your current Phoenix life plan doesn't have this option. But don't worry, you can transfer to a plan that does. This could be to a plan that's still within the Phoenix Group or it could be with a different provider.
Alternatively, if you’re looking for a guaranteed income, we can help you shop around to find the right annuity for you.
What companies are part of the Phoenix Group?
The Phoenix Group is proud to be the UK’s largest long-term savings and retirement business, supporting around 12 million customers.
It’s home to a range of pensions, savings and life insurance brands. Each has its part to play in helping customers make the right choice at the right time. These brands include: Standard Life, SunLife, Phoenix Life, ReAssure, Phoenix Wealth and Phoenix Corporate Investment Services.
Want to keep track of your pension value?
MyPhoenix is an easy, secure way to access and manage your Phoenix Life plan online.
You can also call us on 0345 070 4060. We’re open Monday to Friday, 8.30am to 5.30pm excluding bank holidays.
