Spreading your tax-free entitlement across all withdrawals with People’s Pension

You can take 1 lump sum a tax month. For example, from 6 May to 5 June. We don’t charge you for taking lump sums. More about taking your tax-free lump sum up front

No, we don’t charge you for taking lump sums.

You must take a minimum of £2,000 each time you take a lump sum from People’s Pension.

There’s no limit to how much you can take in a single lump sum.

If your pension pot falls below £2,000 after taking one or more lump sums, you can make a final withdrawal. After that, your pension pot with People’s Pension will be closed.

If you’re still going to be working after you start taking money from your pension pot, you might want to continue saving into a pension to make the most of your employer’s contributions. Or even if you’re not going to be working, you might want to continue making your own contributions. After you start taking lump sums, the rest of your money remains in your pension pot with us and you can still receive contributions, the only difference is, once you start taking lump sums you’ll have a reduced limit of how much you can save into a pension and receive tax relief on. More about continuing to save.

When you take your first lump sum with this option, it’ll trigger the money purchase annual allowance, if it hasn’t been triggered before.

This will mean you can still get tax relief on your pension contributions, but the total amount you can pay in and get tax relief on is reduced to £10,000 a year.

You can nominate someone (or more than one person, or an organisation) to receive the money in your pension pot if you die – called your ‘beneficiary’.

If you’ve already nominated a beneficiary for your pension pot with People’s Pension, your beneficiary will stay the same after you start taking lump sums from it. With People’s Pension, any money we pass on to your beneficiary would be paid to them as a single lump sum – we can’t pay it to them as an income, or carry on investing it on their behalf. More about what happens to your pension savings when you die

Once you’ve taken a lump sum from your pot, you can leave the rest of it invested or continue to withdraw further lump sums. Or, you could choose to take a different retirement option with the rest or your pot or transfer it to another provider. More about mixing your options

Different providers offer different versions of this option, so you might want to shop around to find the best deal for you. There’s a lot of jargon in the pensions industry, and we understand that this can make it difficult to compare your options across different providers – because unfortunately not everyone uses the same terminology. To make it easier for you to compare, here’s a few different ways this option is often described:

• Taking uncrystallised funds pension lump sums or UFPLS
• Taking a number of flexible lump sums
• Taking lump sums directly from your pension pot

• There’s a risk you won’t have enough money to live off in your retirement – or that your money could run out too soon if you take too much too quickly. So you need to plan carefully and work out how much you’ll need.
• There’s a risk you could pay more tax than you planned for. So make sure you understand the tax consequences and consider your personal tax circumstances.
• From the first lump sum you take, you’ll have a reduced money purchase annual allowance. Find out more about this if you plan on continuing to save.
• If you get any means-tested benefits, taking your pension savings could affect your entitlement to these. Find out more about this on the government’s website.
• If you have any unsecured debts or creditors, the money you take from your pension savings may be available to your creditors to satisfy any debts you have.
• There’s a chance there’s a better deal out there for you. So you should shop around and understand all your options. But make sure you avoid pension scams too.

Before you take your pension pot a bit at a time with People’s Pension, we recommend you read:

• our booklet – Your options at retirement
• MoneyHelper’s booklet – Your pension: it’s time to choose
• and The Pensions Regulator’s leaflet on avoiding pension scams.

We also recommend you get in touch with the government’s Pension Wise service for free and impartial guidance on your options. Plus, you might want to consider getting some advice from a financial adviser. More about your guidance and advice options

If you’re ready to take lump sums from your pension pot (and as long as you meet your minimum retirement age) – the quickest way to request this is through your account.

Find out how to take your pension money