Retirement income options explained

Deciding how to access your pension pot

This tool will help you understand the main ways to access the money you've saved in your pension pot.

Flexible Drawdown - taking more from your pension pot

The amount most people can take out of their pensions each year through flexible drawdown is 100% of a comparable annuity. The actual figure is determined by the government, based on factors such as your age.  However, if you’re over 55 and have a guaranteed income of at least £12,000, there’s no limit on how much you can withdraw using flexible drawdown.

The types of income that count towards the £12,000 minimum income requirement (MIR) include the basic state pension, additional state pension, annuities and defined benefit pensions.  Any unsecured income, for example a short term annuity or income drawdown, doesn’t count towards the £12,000.

Important information

As with any investment the value of your fund can go up or down and may be worth less than what was paid in.

Laws and tax rules may change in the future. The information here is based on our understanding in April 2014. Your personal circumstances also have an impact on tax treatment.

 

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2014 Budget update – annuities and pensions

Changes to workplace pensions

On 19 March, the Chancellor announced major
changes to UK pensions and annuities.

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