Retirement savers in the UK can usually access their personal retirement savings from the age of 55 (57 from April 2028).
Retirement savers in the UK can usually access their personal retirement savings from the age of 55 (57 from April 2028). This may vary by pension scheme, so be sure to check with your provider. This doesn’t include your State Pension, which you’ll be able to access when you reach State Pension age.
There are several options for taking (or drawing down) money from a private pension. The option or options you choose can have a significant impact on how long your savings will last in retirement, so it is vital to take professional advice to ensure you are making the right choices for your circumstances.
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You can usually take up to 25% of your pension as a tax-free cash lump sum, up to a cap of £268,275. This is called the lump sum allowance (LSA).
When you take this lump sum must be carefully planned, and you should consult a financial adviser before you make any decisions.
Consider that:
You will pay Income Tax on the remaining 75% of your pension – the amount you pay will depend on your total income for the tax year, including any State Pension, earnings from your job if you’re still working, and income from property, investments or savings.
You can use your pension income to purchase an annuity, which is a financial product that converts your savings into a guaranteed income for either a fixed period, or for life. Annuities are most suited to those who may be concerned about outliving their pension assets and who want the certainty of a guaranteed income.
There are many different types of annuity, including:
A level annuity pays the same income each year. They can be cheaper to buy, but you do risk the value of your income being eroded by inflation over the years.
An inflation-linked annuity ensures that your income maintains its real-terms value by increasing in line with inflation.
A guaranteed income that pays out until a specified date.
You can get an enhanced annuity, which will pay out a higher yearly income, if you have an illness or condition that is likely to shorten your life expectancy.
Instead of increasing in line with inflation, this type of annuity will increase each year at a fixed rate.
A guaranteed income for life.
Drawdown is a flexible way of taking your pension that allows you to leave your pension pot invested and draw down income from your pension as and when you need it.
The benefit of this approach is that it offers the potential for further investment growth, thus boosting your retirement savings. Leftover retirement savings can also be passed on to your beneficiaries, ensuring your loved ones are financially secure when you are no longer around.
On the other side of the coin, you equally remain exposed to investment risk, meaning your savings could be depleted more quickly if the markets turn. Also, if you overspend and draw down too much, you could run out of money.
These disadvantages can all be mitigated with a comprehensive retirement plan and regular reviews with an expert financial adviser.
Don’t leave your retirement plans to chance. With careful management and expert advice, you can live the retirement lifestyle you’ve always dreamed of.
Get in touch to talk to an adviser about your options at retirement, to ensure you’re making the right decisions for your circumstances.
The guidance and/or information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK.
RetireInvest Limited is registered in England and Wales. Company Number 09916200. Registered Address 4 Finkin Street, Grantham, Lincolnshire, England, NG31 6QZ.
Tel: 0800 028 4040
RetireInvest Limited is an appointed representative of Quilter Financial Services Limited and Quilter Mortgage Planning Limited, who are authorised and regulated by the Financial Conduct Authority.
Quilter Financial Services Limited and Quilter Mortgage Planning Limited are entered on the FCA register (https://register.fca.org.uk) under reference 440703 and 440718.
Estate Planning, Trusts, and Tax Planning advice is not regulated by the Financial Conduct Authority.
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
Registered Address 4 Finkin Street, Grantham, Lincolnshire, England, NG31 6QZ.
Approver Quilter Financial Services Limited and Quilter Mortgage Planning Limited June 2025
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Neither Retire Invest Nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.
Neither Retire Invest Nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.
Neither Retire Invest Nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.
Neither Retire Invest Nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.
Neither Retire Invest Nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.
Neither Retire Invest Nor Quilter Financial Planning are responsible for the accuracy of the information contained within the linked site.
