Help and support
FAQs for Members
Planning my retirement FAQs
If you want to receive your pension by a particular date, we suggest you start the process at least 3 months before your required retirement date. This is because there are number of steps to take before we can pay your pension savings.
After you contact our member support team and tell them you want to take your pension savings, here’s what happens next.
- We’ll send you a retirement pack which sets out the value of your pension savings and the choices you have for taking them. You can expect this within 7 working days. Taking your pension savings is a big decision. You may want to take independent financial advice to help you choose your retirement options. See Where can I get help with understanding my retirement options?
- The retirement pack will include forms for you to fill in and send back to us.
- Once we’ve received your filled-in forms, we’ll start taking your pension savings out of the investments they’re in so we can pay the money into the account you’ve named. This can take up to 25 days. But remember, we can only do this if the forms are complete and all the information you’ve given us is correct. Any missing information or errors mean we’ll have to contact you again. This could delay your payment.
If you’ve been working for a while, you may have lost track of your pensions with previous employers, or don’t remember whether you had a pension with any of them. It’s worth checking to see whether you have any forgotten pensions you could add to your pension savings.
You can contact the Pension Tracing Service or the MoneyHelper service for free guidance on tracking down lost pensions. Both services are independent and run by the government. They can also signpost you to independent financial advisers in your area.
NOW: Pensions, like all pension providers, is not allowed to give you advice about your pension. If you want to find out more about how your pension works and understand your options for retirement, the following organisations offer free, impartial information and guidance about pension savings.
- Pension Wise (part of the government’s free MoneyHelper service) offers guidance about your options for retirement. Visit moneyhelper.org.uk/en/pensions-and-retirement/pension-wise. If you are over 50 you can book a phone or face-to-face appointment by calling 0800 138 3944.
- The Pensions Advisory Service (part of MoneyHelper) can help with questions about workplace, State or personal pensions. Visit moneyhelper.org.uk/en/pensions-and-retirement or call 0800 011 3797.
- Citizens Advice has information about all types of pension. Visit citizensadvice.org.uk or call 03444 111 444 for a face-to-face appointment.
The organisations we’ve listed here don’t give independent financial advice – specific advice tailored to you which recommends what you should do. You can only get this kind of advice from a regulated independent financial adviser. You may have to pay for independent financial advice and it can seem expensive, but it could be money well spent if it gives you a better retirement.
Help with finding financial advice
The MoneyHelper service has information about choosing an independent financial adviser and a directory of independent financial advisers that specialise in retirement. Visit moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/find-a-retirement-adviser or call 0800 138 7777.
The Personal Finance Society (PFS) has a What we do for the public section that also includes a directory you can filter to find independent financial advisers that specialise in retirement planning. Visit thepfs.org/about-us/what-we-do/for-the-public.
You’ll need to check the qualifications of any independent financial adviser you’re thinking of using. They must be qualified to Level 4 (or above) of the Qualifications and Credit Framework and have an up-to-date Statement of Professional Standing. You should also check whether they are on the official register of the Financial Conduct Authority (FCA) which regulates independent financial advisers in the UK. You’ll find this at fca.org.uk/firms/financial-services-register.
The information here is general. It doesn’t constitute financial or professional advice, nor does it take your specific circumstances into account. We recommend you take independent financial advice before making any decision which could affect your pension. We do not accept liability for any loss or damage arising out of you using, or relying on, this information.
First of all, please contact our member support team and confirm you want to take your pension savings. To keep your pension savings safe, we’ll need to check your identity – so please be ready to give us your full name and address and your National Insurance number.
As long as you’re over the minimum age for taking retirement benefits (currently 55), we’ll send you a retirement pack. This will set out the value of your pension savings and the options you have, and will include forms you can use to make your choices. You’ll need to fill in the forms and send them back to us. See our Contact us page to contact our member support team.
This is a big decision. We’d suggest you take independent financial advice to help you choose your retirement options. See Where can I get help with understanding my retirement options?
Take them as cash
You can take some or all your pension savings as a cash lump sum. You’ll have complete freedom to use the cash as you like (except you can’t put it back into a pension).
But, you could pay a lot of tax by doing this. Only a quarter of the cash you take is tax-free – you pay tax on the other three-quarters. Depending on your circumstances, this could put you into a higher tax bracket for the year, meaning you pay even more tax.
Also – once you’ve taken all the cash, what will you live on? Do you have other retirement savings you can use instead?
Buy a pension
You use some or all the money in your pension savings to buy a pension income. You do this by buying a policy called an ‘annuity‘ from an insurance company. This gives you a guaranteed income for the rest of your life. You can take up to a quarter of your pension savings as tax-free cash before you buy your annuity. You would pay income tax on your pension income in a similar way to other income.
Annuities come with a range of choices, such as an income that increases or starts at a higher level but doesn’t increase. You can choose an annuity that includes a pension for your husband, wife or civil partner if you die before they do.
It’s important to realise you can’t change the terms of your annuity once it starts to be paid. What’s more, annuities have been getting more expensive, so you may not be able to afford as much yearly income as you would like. The later in life you buy your annuity, the more income you’re likely to get. Also, the costs of annuity policies vary between insurance companies – so it’s important to shop around to find the best price for the type of annuity you want.
Take an adjustable income or ‘drawdown’
You’ll need to transfer your pension savings out to another pension provider if you want to do this. We don’t charge you to transfer your pension savings out. See our Transfers FAQs section.
You can take up to a quarter of your pension savings as tax-free cash before using the rest for drawdown.
You would pay income tax on the money you take out in a similar way to other income. You might be able to limit the amount of tax you pay by being careful about how much you take out each year.
With drawdown, you have complete freedom and flexibility to take money out whenever you want to – but you also have total responsibility for managing your money. You’ll need to keep investing your pension savings and the value of investments can go down as well as up. And you could run out of money altogether.
Having said that, you don’t have to keep on using drawdown for the rest of your life. You could do drawdown for a while and buy an annuity later on to give you a guaranteed income.
We don’t offer annuities or income drawdown products. If you’re interested in either of these options for your retirement, you should take independent financial advice about what would work best for you.
See Where can I get help with understanding my retirement options?
To help people think about how much they might need to retire on, the Pension and Lifetime Savings Association has come up with simple estimates of how much retirement income you need for different standards of living.
There’s a simple summary below based upon living outside of London and lots more detail at retirementlivingstandards.org.uk.
|Living standard||Single person||Couple||For example…|
|Minimum||£11,000 a year||£17,000 a year||No car, weekly food shop of £41, holidays in the UK|
|Moderate||£21,000 a year||£31,000 a year||3-year-old car replaced every 10 years, weekly food shop of £47, a holiday in Europe|
|Comfortable||£34,000 a year||£50,000 a year||2-year-old car replaced every 5 years, weekly food shop of £59, longer holidays in Europe|
You don’t have to actually retire to take your pension savings. You can start to take your retirement benefits any time after you reach age 55.
We’ll normally use your State Pension age as your planned retirement age – the age you plan to retire at. Check your State Pension age.
If you want to retire earlier or later than your State Pension age, please tell us. It’s important we have an up-to-date planned retirement age for you as it affects when we begin to switch your savings from ‘growth’ investments (designed to help your pension savings grow over the long term) to ‘protection’ investments (designed to protect the value of your pension savings before you turn them into retirement income).
The value of your pension savings depends on, among other things:
- how much has been paid in
- how the money has been invested
- the charges you pay for your pension provider to manage your savings
- when you decide to take your pension savings.
The earlier you retire, the smaller your pension savings are likely to be. They’ll have received fewer contributions and had less time to grow. Also, because you’re retiring early, the income from your pension savings may need to last longer than if you’d retired later. It’s worth checking how much income you’ll need each year in retirement.