Options in our Scheme
You can usually take up to a quarter of your pension savings as tax-free cash, as long as your total tax-free cash from all the pension savings you have is less than a quarter of the current lifetime allowance.
If you take cash from your pension savings with us, a quarter (25%) of it will be tax-free. This applies whether you take all your pension savings as cash, or take cash in chunks.
You’ll be liable for income tax on three-quarters of the cash, each time you take some. How much tax you’ll pay depends on how much of your total income for the year is over the income tax personal allowance. This allowance is currently £12,570 a year. The government has said it will stay at this level until 2026.
Options outside our Scheme
The following retirement options aren’t available in our Scheme. You’ll need to transfer your pension savings with us out to another pension provider that offers these options. Find out more about how to transfer your pension savings out from NOW: Pensions.
You can take tax-free cash before using the rest of your savings to:
- buy a pension annuity for a guaranteed income, or
- take an adjustable income.
(Tax-free cash is optional – you don’t have to choose it.)
The income you take from these options is taxed in the same way as other income. How much tax you’ll pay depends on how much of your total income for the year is over the income tax personal allowance of £12,570 a year.