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Guide to delaying accessing your pension savings

Guide to delaying accessing your pension savings

If you are at your selected retirement date, you don’t have to start taking your pension. You can, if you want, keep paying into your pension to increase its value, or, you can stop making payments and just leave your pension savings invested until you come to take the benefits. You may be able to select any date in the future as your new retirement date and there is no restriction on the number of times between now and that date where you can make the decision to defer taking your pension.

If you’re thinking of deferring your pension, there are a few things you’ll need to think about.

  • You will have to manage on your current income.
  • Inflation may impact the value of your pension savings.
  • If you don’t start your pension before your 75th birthday, there could be a tax charge, if you were to die or take a lump sum due to serious ill health, before you have decided what to do with your pension savings. You can find out more about this on the HM Revenue and Customs website.
  • If the market annuity and interest rates are rising, you should be able to get a good return on your continued investment. But don’t forget that these rates – along with the value of your pension savings – can go down as well as up, especially when you add inflation into the mix.
  • Trying to predict how your policy will perform in the future isn’t easy and there’s no way of knowing exactly what rates will be available when you choose to take your pension savings.
  • Make sure you’re not missing out on special features that you may have on your current policy, like guaranteed annuity rates (GARs) that may only be available to you on your original selected retirement date. A GAR could give you a higher level of income from an annuity, where the market rate annuity rate is lower than the guaranteed rate on your policy. You should check with your provider whether you have one and how it works.

We recommend that you obtain free and impartial guidance from Pension Wise, a pension guidance service which has been set up by the Government, or speak to a financial adviser before you make any decisions about your pension savings.

Need guidance or advice?

Free and impartial pension guidance service and information on obtaining financial advice

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For information on accessing your pension funds, request your personal retirement pack

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