Let’s compare your pension options

There’s a lot to consider when you look at your options. It’s so important that you choose an option that will fit in with your plans and lifestyle.

Remember, you can mix and match options and normally you will be able to take 25% of the pension tax free before purchasing a guaranteed income or turning it into flexible income.


  Take a flexible income
Buy a guaranteed income for life
Take it all as a cash lump sum
Will I get a guaranteed income for life? No Yes No
Can I have regular income? Yes Yes No
Can I keep paying into this pension? Yes Yes No
Can my money grow? Yes No Yes
Could my money run out? Yes No Yes
Does my pension pay out a lump sum on death? Yes No No
Can I access my money if I need to? Yes No Yes
Can I access extra money if need be? Yes No No
Can my pension continue to pay an income after my death? Yes Yes No
If you’re thinking about flexible or guaranteed income – take time to shop around for the best deal. You could transfer your pension to another provider and you might get a better retirement income.


Some things to consider before choosing an option

  • Is your money invested in the best way to fund your future for as long as you need it to?
  • What tax will you pay on any withdrawals?
  • Will you have enough left to pass on to loved ones?
  • Accessing your pension this way will restrict how much you can continue to pay into your pension without potential tax consequences - find out more
  • You need to consider the longer-term impact of making withdrawals from your pension pot because your money could run out before you want it to.
  • Your money is still invested and charges continue to be deducted. The value of your investment can go down as well as up and you may get back less than what was paid in or not have enough to sustain your required income.

Buy a guaranteed income for life (annuity)

  • It can’t be changed so will it suit you for the rest of your life?
  • Have you shopped around for the best deal in the market?
  • It may not be suitable if you want to pass on your pension pot when you die.
  • What tax will you pay on a guaranteed income?
  • Do you really need access your pension pot right now?
  • Do you have income elsewhere you can use?
  • What tax will you pay on any cash taken out above your tax free allowance?
  • Accessing some or all of your tax-free cash will restrict how much you can continue to pay into your pension without incurring potential tax consequences - find out more
  • Where will you re-invest it and what are the risks?
  • What impact will inflation have on your spending power over the years?

To access all of these options you may need to move to a different pension product which offers this functionality. Different charges may apply. Transferring will not be right for everyone. There are a number of points to consider, as you could be losing money by giving up any valuable benefits or guarantees that your current plan offers.

Of course, laws and tax rules may change in the future. This information is based on our current understanding in April 2022 and your own circumstances and where you live in the UK also have an impact on the taxes you pay.

Access to impartial guidance

We recommend you seek appropriate guidance or advice to understand your options at retirement. If you are aged 50 or over, you can get free guidance over the phone or face to face with Pension Wise, a service from MoneyHelper.

Go to www.moneyhelper.org.uk/pensionwise or call 0800 138 3944.

MoneyHelper guides are also available at www.moneyhelper.org.uk

Protect against pension scams

The Pension Regulator have provided information to help people protect themselves from pension scammers.

Find out more on The Pension Regulator website.

The Financial Conduct Authority also provide information as well as a helpful warning list of known scammers.

Read more and use the FCA tool on their ScamSmart website.