Covid 19 support

5 tips if you've started taking money from your pension savings

MoneyPlus Features Team

If you’ve started taking money from your pension savings, you may be feeling anxious about seeing falls in the value of your pension savings in the current environment – particularly if you’re relying on that money to live on for the rest of your life. We can’t give advice, but we can suggest some things you could consider doing to help your pension savings last longer.

1. Consider reducing how much you’re currently taking

Taking money from your pension savings when the value is low makes it harder for them to recover later. Could you reduce how much you’re taking until markets pick up? Think about what you really need to live on in the short term to give the rest of your pension savings the best chance of increasing again when markets start to recover, as they’re expected to.

Also bear in mind that taking a lot of money from your pension savings now could mean that you won’t have enough to provide what you need in later life.

If you’re already taking money from your Standard Life pension plan, you can see how long your pension savings could last if you were to change how much you took, by logging in to our online service and using our review tool, which you can find under ‘Review your plan’.

2. Consider using other savings to supplement your pension money

If you have other savings – such as Individual Savings Accounts (ISAs), bank savings or rental income from any properties you let out – could you use these to supplement what you take from your pension in the short term? That way you wouldn’t have to withdraw as much from your pension savings.

3. Consider delaying your retirement

If you’ve only taken your 25% tax-free amount, and haven’t stopped working yet, could you delay your retirement? That would allow you to put off accessing your pension savings and give them a better chance of recovering when markets recover, as they’re expected to.

This could also give you more flexibility about the amount of money you could pay into your pension plan in the future. Currently, as soon as you take anything over your 25% tax-free amount, the maximum amount you and your employer can pay into a defined contribution pension plan permanently reduces to £4,000 a year. This is obviously a lot less than the standard £40,000 annual allowance limit for pension contributions.

For more on this, have a look at the article Do I need to re-think retirement?

4. Check where your pension savings are invested

Although now isn’t the best time to start changing where you’re invested, as this could lock in losses, you can check if your current investments are the best long-term option for how and when you want to take the rest of your pension savings.

Longer term, think about having a mix of lower and medium risk investments that can help protect the money you need in the short term, while also giving the growth that can help your pension savings last as long as you need them to.

If you have a Standard Life pension plan, you can check where you’re invested by logging in to our online service.

5. Think about getting further guidance or advice

For further information about how the impact of coronavirus might affect your pension plan or investments visit the Pensions Advisory Service website.

Before making any decisions about your pension savings, you can get free guidance from the government’s PensionWise service or you may want to consider speaking to a financial adviser. A financial adviser can work with you to build a tailored plan that’s tax efficient and resilient to ongoing market changes.There’s likely to be a cost for getting advice.


The information in this article should not be regarded as financial advice. Please remember that the value of investments can go down as well as up and may be worth less than was paid in. Past performance is not a guide to future performance.

Information is based on our understanding in April 2020.