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.
To help decide the right option for you, use our guide to choosing between an annuity and income drawdown.
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.
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.