You can use parts of your pension pot(s) for different options and take them at different times.
Deciding how to take your pension money
Your pension pot doesn’t automatically turn into a regular income or get sent to you as a lump sum. You need to tell us how you want to take your money – and there’s a few different ways to choose from.
You don’t have to choose just one option – you can use parts of your pension pot for different options and take them at different times. But not all providers will allow you to do this. If you have more than one pot, you can use different options for each pot.
Once you’ve decided how you want to take your money and you’re ready to make a request, logging into your Online Account is the most convenient way to access your pension savings with The People’s Pension.
How does mixing your options work?
Different providers have different rules about taking your pension pot through more than one option. So it might be worth shopping around to get the best deal for you.
With The People’s Pension, it depends on which options you want to mix…
|If you take the following pension option||Will you still have other options avaiable?||Details|
|…keep my pension pot where it is?||Yes||You can keep your pension pot with us for as long as you like.|
And when you do decide you want to access your pension pot later down the line, you can choose to take it through any of the retirement options available from The People’s Pension, at any point you choose (after you’ve turned 55).
|…take my pension pot all in one go?||No||If you take all of your pension pot in one go, you won’t be able to then choose any other options because you won’t have any money left in your pension pot to take.|
And no matter how much you had in your pension pot to begin with (whether it’s more or less than £10,000) – your account with us will be closed once you’ve taken it all.
|…take it a bit at a time – taking my tax-free cash up front?||Yes|| |
You can choose to take your pot a bit at a time or all in one go. Under HMRC rules for every £1 you take as tax-free cash, £3 moves to your flexi-access drawdown account. Any money you then take from your flexi-access drawdown account will be liable to tax as if you were earning an income.
By taking your tax-free cash a bit at a time, you’re leaving more money invested, meaning you may get even more tax-free cash in the future.
If you change your mind later down the line you can use what’s left in your pension pot and your flexi-access drawdown account to buy a guaranteed income for example.
And if you continue saving with us, you’re pension pot will keep on building. Once it gets above £2,000 you’ll be able to take your next chunk of tax-free cash – or you can claim your pot through any of the retirement options available from The People’s Pension.
|…take my pension pot a bit at a time – spreading my tax-free cash across all withdrawals?||Yes||If you spread your tax-free cash across all withdrawals, you can use the rest of your pot to take any other retirement option available from The People’s Pension.|
Or you can continue to take it a bit at a time. Normally you’d need to have more than £10,000 in your pension pot to do this – but if you’ve already taken one lump sum in this way, you may be able to do it again even if you have less than £10,000 in your pot.
|…buy a guaranteed income (‘annuity’)?||No||If you want to transfer to another provider to buy a guaranteed income, or if you transfer to another provider to take any retirement option – you’ll have to transfer your whole pot.Your account with us will then be closed, so it will depend on your new provider’s rules as to which options are available to you.|
But generally, you can’t normally cash in or change your guaranteed income once you’ve made the agreement.