Help with your pension planning

A collection of videos to help with your pension planning, including making contributions, deciding on your investment strategy, and your options at retirement.

Taking an income

Income options

There are several options for using your savings in retirement and you can tailor your choices to suit your income needs.

This video summarises the options available and the things you might want to think about when making your choice. Note that you may need to transfer your savings to another pension arrangement to access some of the options available.

Income options

When the time comes to take an income from your retirement savings, you have a range of choices. It’s important to understand these choices and the risks of each. Things to consider include:

  • How much you may be taxed
  • Any outstanding debts
  • Your health
  • Upcoming life events

You may be able to mix your income choice to best suit your lifestyle needs. You may be able to:

  • Leave your pot alone
  • Get a guaranteed income (annuity)
  • Have flexible access
  • Take several lump sums
  • Take everything as cash

Use this chart to compare your pension options.

How you choose to take your money will affect the tax you pay, particularly if you are planning on taking large lump sums. You may end up moving into a higher rate tax band, so it’s important to plan accordingly. 

You can manage your tax by making the most of the flexibility around what you take out and when. It may be worthwhile getting help from a Financial Adviser or you can get free tax advice from Tax Help For Older People.

Taking large payments from your pension savings can affect your entitlement to means-tested State Benefits. For example, no one with more than £16,000 in capital will be entitled to Housing Benefit or Council Tax Support. If you’re eligible for any benefits, then make sure you take this into account.

The Plan is run by Scottish Widows and
you can find more information on their website