Members Your retirement options

Find out what you can do with your now:pensions savings when it’s time to turn them into retirement income.

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Your retirement options with now:pensions

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Stay where you are

There’s no rush. You can leave your now:pensions savings where they are for now and plan to take them at a later date.  

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Take all your savings

You can take all your now:pensions savings as cash at once. Usually, a quarter of this will be tax free. The rest will be taxable at your highest rate for that tax year (April to April).   

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Take some of your savings

As with taking all your pension savings as cash, a quarter of each chunk will usually be tax free and three-quarters will be taxable at your highest rate for the year. You can only ask for one chunk of cash at a time, and only once a calendar month.   

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Watch the tax

Remember, usually only a quarter of the cash you take is tax-free. The rest will be taxed at your highest rate of income tax, as part of your income for that tax year (April to April). It’s worth keeping an eye on how much income you’ll get in that tax year, in case taking the cash pushes you into a higher tax bracket. So you’d pay even more tax.  

Pensions and tax
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Mind the allowance

You don’t normally pay income tax on money you pay in to a pension. This is known as ‘tax relief’. But, if you start taking money out of your pension savings while you’re still paying into them, the money purchase annual allowance could affect you. This means the total amount you and your workplace can pay in to all your pensions in a tax year, and still get tax relief, goes down to £10,000 a year. 

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Pension savings worth £10,000 or less

If all your pension savings in now:pensions are worth £10,000 or less, you can take them as cash all at once without the money purchase annual allowance affecting you. As with all cash payments, usually only a quarter of this amount will be tax free. 

Read more

Retiring at a different age? Tell us

Make sure we’ve got the right planned retirement age for you. This is the age you want to retire at. We assume it’s your State Pension age if you haven’t told us anything different.

Check your planned retirement age in now:u
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If you’re invested in the lump sum plan

You’ll be in the lump sum plan if you haven’t chosen another investment option. The lump sum plan follows a three-phase pension journey including a de-risking phase. This means 10 years before your planned retirement age, your pension savings start moving 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 start taking them. 
 
If you retire earlier or later than this, the de-risking phase may not work the way it’s designed to. Here’s why this could happen.  

Retire earlier than planned retirement age    Retire later than planned retirement age    
Your investments haven’t finished moving from growth to protection    Your investments move to protection too early
They could fall in value before you start taking them    You could miss out on investment growth
You could get less retirement income    You could get less retirement income   

Your retirement options outside now:pensions

The following options aren’t available in now:pensions. You’ll have to transfer your now:pensions savings out if you’re interested in these.

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Think about taking financial advice

Transferring out is a big decision. It’s a good idea to take financial advice first. The government-backed MoneyHelper website has a guide to finding a financial adviser, and a directory of advisers who can give advice on pensions.

Visit MoneyHelper
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Buy an income for life (annuity)

You buy a policy from an insurance company that pays a guaranteed income for the rest of your life. The policy is called an annuity.

You’ll be taxed on the income from your annuity in the same way as any other income.

There’s a lot of choice with annuities, such as increases or no increases and an income for your partner if you die before them. There’s also a lot of choice of different providers. And with most annuities, you can’t change it once you start to get your income. You may want to think about taking regulated financial advice.

Find out more
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Flexible income (drawdown)

Leave your pension savings invested and take income out when you want it. You pay income tax on the money you take out in a similar way to other income.

This can give you more flexibility with your money. You can take out any amount, whenever you want. But it’s also up to you to manage your money and make sure it doesn’t run out during your lifetime. And there’s a lot of choice of different providers. So you’ll need to think about taking regulated financial advice.

Learn more

Finding help and guidance

Like any other pension provider, we can’t tell you what to do with your pension savings.  

The Pension Wise service offers free guidance about your options for retirement. You can chat to pension experts on the website. If you’re over 50 you can make an appointment for a guidance call.  

  • Or, we can book your Pension Wise appointment for you. Ask us on webchat. 

Regulated financial advice

Pension Wise offers guidance. It doesn’t give specific advice, tailored to you, recommending what you should do. You can only get this kind of advice from an adviser who’s regulated by the Financial Conduct Authority (FCA). You usually have to pay for regulated financial advice and it can seem expensive, but it could be money well spent if it gives you a better retirement. 

The government-backed MoneyHelper website has a guide to choosing a financial adviser and a directory of advisers who can give regulated financial advice on pensions.  

The Personal Finance Society (PFS) has a What we do for the public section, including a directory you can filter to find advisers that specialise in giving regulated financial advice about retirement planning. 

The FCA has a register of financial services firms regulated in the UK. You should check any adviser you’re thinking of using is regulated to give advice on pensions on this register. 

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Frequently asked questions

See all support for members

You don’t have to retire to start taking your money out of now:pensions. At the moment you can start taking it once you’re 55. This age goes up to 57 in 2028. 

You do have a planned retirement age in now:pensions. We assume it’s your State Pension age if you haven’t told us anything different. Check your State Pension age now.

This is important because your planned retirement age affects how your money is invested as you get closer to retiring. If we don’t use the right age, your investments won’t work in the way they should. You could miss out on some retirement income.  

To check or change your planned retirement age, log in to now:u and go to Investments > Personalise your plan. On the Choose your plan page, choose See details.  

Below the details of the charges you’ll see your current planned retirement age. Use the plus or minus signs to change the age to the one you want.  

Firstly – you usually need to be at least 55 (57 from 6 April 2028).

You may be able to take your pension savings earlier if you’re suffering from ill health.

Read our guide to learn more on how to take your pension savings.

MoneyHelper and Pension Wise 

The government-backed MoneyHelper service offers free, impartial guidance about a whole range of money matters including budgeting, money troubles, savings and pensions. Trained experts are available to help by phone and webchat. 

MoneyHelper includes Pension Wise, a service for people over 50 that explains your options for taking money out of your pension savings.  You can chat to pension experts on the website.

If you’re over 50 you can make an appointment for a guidance call. This can either be a call with a pensions expert, or a self-guided appointment online.

Calls last about an hour.

The self-guided appointment is expected to last about 30 minutes, but you can save it at any time and come back to it later.

Citizens Advice 

Citizens Advice is a charity offering confidential help and advice to help people sort out their problems, including money and debt. 

Regulated financial advice  

The organisations we’ve listed so far offer guidance. They don’t give specific advice, tailored to you, recommending what you should do. You can only get this kind of advice from an adviser who’s regulated by the Financial Conduct Authority (FCA). You usually have to pay for regulated financial advice and it can seem expensive, but it could be money well spent if it gives you a better retirement.

The MoneyHelper website has a guide to choosing a financial adviser and a directory of advisers who can give regulated financial advice about pensions.

The Personal Finance Society (PFS) has a What we do for the public section, including a directory you can filter to find advisers that specialise in giving regulated financial advice about retirement planning.

The FCA has a register of financial services firms regulated in the UK. You should check any adviser you’re thinking of using appears on this register as authorised to give advice on pensions.

With now:u, you can plan your retirement whenever you want. now:u always shows the projected value of your pension savings at your planned retirement age.  

Log in to now:u and go to Plan your retirement. You can play around with our retirement planner to see how paying more in to your pension savings or changing your planned retirement age changes the projected value of your pension savings.  

You can also use the planner to see how long your money is likely to last after you retire.  

The earlier, the better. It’s never too early.  

  • The more you plan, the more likely you are to get the kind of retirement you want.  
  • And the longer your pension savings have to build up, the more money you’re likely to have when you retire.  

Read more about planning your retirement here.