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
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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
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.
Call us on 0345 070 1441
We’re open Monday to Friday, 8.30am to 5.30pm excluding bank holidays.
Frequently Asked Questions
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 1441. We’re open Monday to Friday, 8.30am to 5.30pm excluding bank holidays.