Pension Options at 55

From April 2015 you have had complete freedom to access your pension pot. If you are aged 55 or over you could access your pension in one of four ways

  1. Take a guaranteed income for life –  You get paid a set amount every month for the rest of your life so you know exactly how much you will get and when.
  1. Take a guaranteed income for a fixed number of years – This allows you to keep your options open without being locked into a lifetime annuity. When the term ends you get a guaranteed amount back and you are free to shop around again for a new pension product or take your remaining pension pot as cash.
  1. Flexi-Access Drawdown – Take a regular income or lump sums as and when you need them. There are no limits and you have complete control and flexibility for taking income. 
  1. Take it all in cash – TAKE UP TO 25% TAX-FREE the rest is taxed at your marginal tax rate.

Please note

Your existing provider may not offer the full range of options, so it may be necessary to transfer to a different provider to access benefits flexibly.

Other things to consider

Your Health and Lifestyle

If you’ve been diagnosed with an illness, smoke, or have other health problems that could reduce your life expectancy, you might be able to get a higher retirement income. This is sometimes known as an enhanced annuity.


Normally 25% (one quarter) of your pension pot can be taken tax free.

The remaining 75% of your fund, no matter how you take it, is taxable as earned income.

Taking all your money at once may mean you enter a higher rate tax bracket.

What happens to your pension if you die

Under the new rules, passing away either side of your 75th birthday could be the difference between a tax-free inheritance and a tax charge for your nearest and dearest.

There’s a good chance, then, that you will live beyond age 75, which means tax planning will be an important consideration for your heirs
flexibe access drawdown death benefits

The advantages of getting financial advice

Choosing the right retirement income product – it’s a big decision

If you’re retiring soon, here at Retirement Solutions, we will discuss what you really want from your pension, and help you choose the best options to achieve that.

Call us on 0800 043 0725

Why choose Retirement Solutions?

Retirement Solutions is one of the UK’s best known retirement income experts, and we specialise in helping individual clients get the most from their retirement fund.

Planning your retirement is one of the most important financial decisions you will ever make, and these decisions could affect your lifestyle for the rest of your life.