If you are 55 or over and have a defined contribution (money purchase) pension plan, you can:

  • Leave your pension pot invested
  • Buy a guaranteed income for life 
  • Take a flexible income from your pension pot
  • Take a cash lump sum from your pension pot
  • Combine one or more of the options above. You can take cash and/or income at different times to suit your needs.

You may be able to access your pot earlier than age 55 if you’re unable to continue working because of ill health. It’s important to remember that with some options, once you’ve chosen them, you can’t change your mind later.

Shopping around

Allen Tomas & Co can obtain illustrations on the most suitable annuity plan to suit your circumstances, we will always take into account your health in order to potentially enhance the annuity rate. It’s always worth checking what’s available in the wider market as you may get a better deal than the one offered by your existing pension provider.

Transferring to another provider

Different pension plans offer different options so you may need to transfer your pension plan to another pension provider to access some or all of these options. Depending on the type of pension you have, you may incur charges or miss out on valuable guarantees if you transfer. We recommend you speak to us before taking any action as you may be required by law, or your provider may insist you get financial advice before any transfers can go ahead.

Some things to think about before accessing your pension plan

  • Tax implications – The way you’re taxed and how much you have to pay will depend on how you access your pension and your individual circumstances, such as any other sources of income or savings you have, and may be subject to change
  • Sustainability of income – If you take too much money from your pension plan, you may not have enough left to provide you with a sufficient level of income
  • Investment choice – If you’re leaving some or all of your pension plan(s) invested, it’s important you consider the funds you’re invested in to make sure they’re still the right choice for you. The value of your pension that remains invested can go down as well as up. Appointing the right Independent Financial Adviser to advise in this area is paramount 
  • Providing for any dependants – If you leave any money in your pension plan, on your death it will usually pass to your beneficiaries free of inheritance tax. If you take money out of your pension plan it forms part of your estate and may become subject to inheritance tax. Taking money out of your pension may mean there isn’t enough money left to provide for your dependants should you die before them