Withdrawing money from your pension
There’s a lot to think about when you withdraw money from a pension, but we’re on hand to guide you through the process.
Want to start taking money from your pension?
You've been saving hard for you retirement. It's usually possible to take 25% tax-free cash and, when you're ready, you can start to take an income from your pension once you turn 55 (this is due to change to 57 from 2028 - the normal minimum pension age). But before you do, it's important you understand how much tax-free cash you can take from your pension and what your income options are (more about these below) before making any decisions you might regret later.
Tax-free cash
You can normally take 25% tax-free cash from their pension savings (up to £286,275). Anything left over will be taxed - just as if you'd earned it from a job.
Know what you want already?
If you've researched your income options and know about tax-free cash, we'll show you how to access your pension savings.
Understand your income options
It's decision time. And you have lots of income options to consider. The good news is you don't have to choose just one of these options. You can combine two or more if that works better for you (for example, you might want to buy an annuity with part of your pot to cover your day-to-day expenses and then take lump sum withdrawals from the rest). If you have more than one pension pot, you can choose a different option for each of them.
It's worth noting that not all defined contribution pension schemes - also known as money purchase pensions - offer all options. If you find that's the case for you, it's possible to transfer your benefits to another pension scheme to access other options. With a defined benefits or final salary scheme, your options are likely to be different.
Flexible income (drawdown)
You can leave your money invested in your pension and take a regular income from it.
Lump sums
You can leave your money invested in your pension and withdraw ad hoc lump sums, as and when you need them.
Guaranteed income for life (annuity)
You can purchase an annuity with an insurance company for a regular, lifelong income.
Leave it where it is (staying invested)
You can delay taking money from your pension until the time is right for you.
Compare your income options at a glance
| Will I pay tax on my withdrawal? | Can I be sure my pension will last for rest of my life? | Can I pass on what’s left after I die? | Will my leftover money stay invested? | |
|---|---|---|---|---|
| Flexible income | Yes* | No | Yes | Yes |
| Lump sums | Yes* | No | Yes | Yes |
| Guaranteed income for life (annuity) | Yes | Yes | Typlically, no** | No |
| Leave your money where it is | No | No | Yes | Yes |
* Withdrawals above your 25% tax-free limit are taxed as income
**Some annuities allow add on options where you can choose to pass on your pension after you die
Checklist: ask yourself the following
Now you understand what your income options are, make sure you can answer the questions below. It's your money, but you need to be able to live with your decisions. So, it's time to dot the i's and cross the t's.
Ready to access your pension?
Here's how and what to expect. If you want to take the step-by-step guide away and read it in your own time, please download the guide.
1. Request a retirement pack
To start the process, you’ll need to call the Workplace Investing Service Centre on 0800 368 6868 or email pensions.service@fil.com and ask us to send you a retirement pack. This will include the current value of your pension account and your retirement options. It will take about ten working days to arrive in the post or online within the next working day.
2. Time for a chat
Next, we'll discuss the important information you need to know about taking money out of your pension savings. The second call will take about 30 minutes and based on this call (your selected withdrawal option/preference) we’ll give you a retirement withdrawal quote saying how much money you’d be taking out and how much would be left in your pension (based on the valuation at that time).
3. Fact checks
Have your bank details to hand during the call. To help protect you and Fidelity against financial crime, we need to check your identity and run an electronic check on the bank account you want the money to go into. If we can’t validate your details electronically, we’ll ask you to send certain documents, for example a passport, UK Driving license or bank statement.
4. Preparing your quote
We’ll send you your retirement quote by post or email within the next working day. If you’re happy to go ahead, you’ll need to sign and return (via DocuSign/post) to us with any required documents.
5. Payment
We’ll check your returned forms and if everything is okay, we'll pay the money you’re taking out of your pension into your chosen Bank account. It can take up to 15 working days to reach your bank account. Once the money has been paid, we will write to let you know.
Contact us
Once you've decided to make a withdrawal, you should call us on 0800 368 6868 between 8am and 6pm on a UK business day. One of our associates will guide you through the process over the phone.