Taking payments from an existing Income Release plan

There are a few things to be aware of before your get started with your Income Release request.

When to use this form:

You can use this form to:

• Set up regular income payments
• Take a one-off tax-free payment
• Start or change regular monthly payments
• Withdraw all funds and close your plan

Don’t use this form if:

• You have a capped drawdown pension
• You want regular less often that monthly
• You want monthly payments to automatically increase each year
• You want to use our Income Tap facility  

If any of these apply, or if you’re unsure about any questions, please stop and call us on 0345 850 8953 for help.

Important information

• Tax-free allowance: You can usually take up to 25% tax-free. Anything above is taxed as income.
• Lump Sum Allowance: The current limit is £268,275 across all pension plans. Exceeding this may trigger tax charges.
• If you take taxable income: When withdrawing taxable income from a defined contribution pension, the Money Purchase Annual Allowance (MPAA) will apply. This reduces your annual tax-relieved contribution limit for defined contribution pensions to £10,000. If your contributions exceed this limit, the excess will be subject to an annual allowance charge, calculated at your marginal income tax rate.
• If this is your first taxable income or includes tax-free cash: We’ll email you an illustration showing how your pension pot may be affected. You’ll need to confirm again before we process your request.
• If you already have a taxable payment or you’re stopping income: We won’t send an illustration and no reconfirmation is needed.
• If you’re unsure: Contact us before continuing on 0345 850 8953.

How withdrawals work:

• If you haven’t set up a specific plan for regular monthly payments from a chosen fund, we’ll take income proportionately from all the funds where your pension savings are invested.
• If you have a chosen fund for regular income that’s taxable, we’ll only take payments from that fund.

If you have any questions or need support, we’re here to help. Call us on 0345 850 8953.

Making a choice about what to do with your pension is important and life can be difficult at times.

When you’re having a hard time, financially, or with your health and wellbeing, it can impact your day-to-day decisions. Some circumstances that can impact your financial decision-making include:

• Recent life changes, such as the loss of a loved one, a relationship ending or caring responsibilities
• Needing support to manage your finances, such as help from a trusted friend, family member or caregiver
• Health concerns or conditions, such as mental health difficulties, a recent operation, or a cancer diagnosis.

If you are in serious ill-health and your life expectancy is less than one year, you may be able to take your entire pension pot tax-free. Give us a call on 0345 602 1885 for more information on eligibility and support available.

Get in touch for help

Give our customer service team a call on 0345 850 8953.

Lines are open 8am to 6pm, Monday to Friday, excluding bank holidays.

What you'll need when you call

Have your plan number ready when you contact us. You will find this on your statement or plan documents.

Regulated Financial Advice 

Royal London can’t give financial advice and we strongly recommend that you take financial advice and/or the free pension guidance available before you access your pension savings

If you don’t have a financial adviser, you can find one in your area.

Pensions guidance

Pension Wise is a free, impartial service from MoneyHelper that helps you understand your pension options. It’s delivered through an appointment with a pensions specialist.

If your circumstances or pension value have changed, you may benefit from guidance again.

To book:

• Call Royal London: 0345 850 8953
• Call Pension Wise: 0800 100 166
• Or visit Money Helper

This option lets you make a one‑off payment from your plan, which won’t repeat automatically.

Set up monthly payments.

Adjust amount, frequency, or pause payments.

Permanently close the policy and withdraw the full remaining balance.

Start a new regular income payment

25% of the funds in your savings account can be taken tax free, the remainder is taxed as income. If you're unsure of your remaining tax free allowance or the options available to you, please contact us.

When requesting a combination of tax-free and taxable income payments, the tax-free part must be at least 25% of the total payment. Both types of payments will be made at the same time each month.

Choose your payment date

• Choose a payment date between 1 and 28 of the month.
• Make sure to give us at least 10 business days for the payment to be set up.
• If we set up the payment after your chosen date, we’ll arrange it for the same date next month.

For taxable payments, if you select the 6th, 7th, 8th, or 9th of the month, there may be instances where the tax deduction is higher than expected due to two payments falling within the same tax month. If the payment date falls on a bank holiday or weekend, we will process the payment on the preceding working day. Tax rebates resulting from these instances will typically be applied in the following month. For further information, please contact us.

If you’re unsure, we’ll use age 90 as the default. This is often the same as your ‘target age’ for retirement planning. You can change this later if your plans change.

Make a one-off withdrawal

Tax-free cash payment

25% of the funds in your savings account can be taken tax free, the remainder is taxed as income. If you're unsure of your remaining tax free allowance or the options available to you, please contact us.

One-off taxable income payment

25% of the funds in your savings account can be taken tax free, the remainder is taxed as income. If you're unsure of your remaining tax free allowance or the options available to you, please contact us.

Change or stop your regular payment

When requesting a combination of tax-free and taxable income payments, the tax-free part must be at least 25% of the total payment. Both types of payments will be made at the same time each month.

For taxable payments, if you select the 6th, 7th, 8th, or 9th of the month, there may be instances where the tax deduction is higher than expected due to two payments falling within the same tax month. If the payment date falls on a bank holiday or weekend, we will process the payment on the preceding working day. Tax rebates resulting from these instances will typically be applied in the following month. For further information, please contact us.

Withdraw all funds and close my Income Release plan

Are you sure you want to withdraw all your funds?

If you withdraw all your funds, your Income Release Plan will close and you won’t be able to pay in again. Please read the points below before confirming:

Things to consider

• You may miss out on future growth: Investments can help your money grow even after you stop working.
• Inflation can reduce spending power: Over time, the cost of living rises, so your money may not stretch as far without investment growth.

Important information

• Think about how long your savings need to last. Keeping some money invested could help support your income over time. If you’re unsure, consider speaking to a financial adviser.
• Depending on your tax-free cash entitlement, this payment may be taxable or a mix of tax-free cash and taxable income.
• You can’t return this money to Royal London. HMRC have now made it clear that cancellation rights do not apply to any tax-free or taxable withdrawals.
  We are still in the process of updating all of our customer communications in relation to this matter. In the meantime, you should disregard any reference to cancellation rights or a cooling off period.
• We’ll send your P45 within six weeks of closing your plan.

Lump Sum Allowance

There’s a limit on the total tax-free cash you can take from all your pension plans, called the Lump Sum Allowance (currently £268,275). If you go over this limit, you may have to pay tax at your marginal rate.

Get in touch for help

Give our customer service team a call on 0345 850 8953.

Lines are open 8am to 6pm, Monday to Friday, excluding bank holidays.

What you'll need when you call

Have your plan number ready when you contact us. You will find this on your statement or plan documents.

If you’re unsure, please get in touch by calling us on 0345 850 8953. 

Please go back through the previous sections and review your answers. If your chosen options is still not selected, please get in touch by calling us on 0345 850 8953.

Please check the amount you are requesting (and dates where applicable) before submitting the form.  

Reviewing Your Pension Pot

You’re in control of what happens to your remaining pension pot.

It’s important to make sure your remaining pension pot is invested in the right way for you.  You should take this opportunity to review how it is invested.

Investment Pathways are investment solutions we’ve created for customers in drawdown without taking advice and are designed to meet specific retirement objectives.

Find out more about our Investment Pathways.

Each Investment Pathway is built from a mix of funds and asset classes, tailored to support different retirement goals.

Which of the following best describes your current plans?

Investment pathway 1: Leave it untouched

Investment Pathway 1 is our investment solution for customers who have no plans to touch their pension savings in the next five years and have a balanced attitude to risk. Investment pathway 1 is designed to deliver growth above inflation over the short-term for an investor entering drawdown. 

Investment pathway 2: Set up a guaranteed income (annuity)

This is an investment solution for customers who plan to set up a guaranteed income (annuity) within the next five years and has a cautious attitude to risk. Investment pathway 2 is designed to maintain annuity buying power for customers looking to buy an annuity in the short-term.  

Investment pathway 3: Take a flexible income

This is an investment solution for customers who plan to start taking money as a long-term income within the next five years and have a balanced attitude to risk. Investment pathway 3 is designed to deliver growth above inflation to support sustainable income withdrawal. 

Investment pathway 4: Withdraw it all

This is an investment solution for customers who plan to take out all their money within then next five years and have a cautious attitude to risk. Investment pathway 4 is designed to offer the potential for above inflation growth while support short-term needs.  

Other investment options

If you want to make your own investment choice, you can also do this. You just need to contact us on 0345 602 1868.  

We want to help you make a confident and informed decision by highlighting some key risks for customers withdrawing from their Income Release plan. These could impact on your financial wellbeing and retirement.

If you are expecting the money you take from your pension pot to help provide an income in retirement, you need to consider how long the money needs to last for.

25% of the funds in your savings account can be taken tax free, while the remainder is taxed as income.  Once you have used up your tax free allowance, future withdrawals will be taxed as income and the rate of tax you pay will depend on your total taxable income in that tax year. Please be aware that tax rules may change in the future and depend on individual circumstances.

If you receive any means tested state benefits, they may be reduced or lost when any money you receive from your pension savings is taken into account.

You may be charged for investing your money. You should consider those charges and see how they compare with the charges if you left your money where it is. You also need to consider the potential return you can get on your investment and the risks associated with getting that return.

Pension scams can be sophisticated, take many forms and often appear to be a legitimate investment opportunity. If you're thinking of taking money out of your plan to give to someone or to invest somewhere else, we’d recommend you take a few minutes to have a look around. It might just give you some extra peace of mind and it could also help you avoid losing all your hard earned savings to a fraudster. You can get useful information on current and known scams and how to avoid them at www.fca.org.uk/scamsmart (opens in new window).

Creditors may be able to make a claim for money you receive from your pension savings.

The effect of inflation means that, over time, the amount you can buy with the same amount of money goes down. If you're intending to use your lump sum to provide a retirement income, you need to consider the impact that inflation will have on it in the future.

If contributions of more than £10,000 a year are made to any Defined Contribution pension arrangements, including those made by you or your employer, you will normally incur a tax charge. This limit is known as the Money Purchase Annual Allowance (MPAA).

It’s important that you understand the implications of the decision you’re making. If you’re not sure you understand the risks involved, have another read through our risk warnings, or please contact us on 0345 850 8953 to discuss further.

Please complete all the information below and click 'Submit' to complete your request. We'll check the information you provide against our customer records to verify your identity and process your request.

• The bank account must be in your name (or joint names)
• Must be a UK bank account
• Can’t be a Post Office account or ISA
• Must be a personal bank account, not a business account

To comply with money laundering regulations, we may need to verify your identity. Here’s what you need to know:

• Checks are done electronically using a trusted third party.
• We compare your name, address and date of birth against secure databases (e.g. electoral register, fraud prevention records).
• A record of the search will be kept by the third party.

If you’d prefer not to have electronic checks, call us on 0345 850 8953.

Before submitting, please be aware and accept that tax may become payable if:

• You use a large portion of your tax-free lump sum to make additional pension contributions in a way HM Revenue & Customs doesn't allow. This is sometimes called "recycling of tax-free cash."
• You give incorrect information in any relevant section of this form.

If HM Revenue & Customs imposes a tax penalty, you may need to pay it. If we incur a tax penalty, you'll need to repay us.

We're here to help you make the most of your pension contributions while staying within HM Revenue & Customs' rules. If you're unsure, stop filling out this form and call us on 0345 850 8953 for guidance.

What happens after you submit?

• If this is your first taxable income payment or you’re using tax-free allowance:

We’ll email you an illustration showing how this affects your pension pot. Please confirm by replying to that email before we proceed. Check your inbox for an email titled ‘SAFE: Royal London online form – reply required’ (including junk/spam folders).

• If it’s not your first payment or you’re not using tax-free allowance:

Once you’ve submitted your request, we’ll process it - and issue any payments required – within 5 to 7 to working days. We’ll send you an email confirmation once your request has been processed. If we need anything else, we’ll get in touch by email to explain what’s needed.

If you’re withdrawing all funds

• We’ll process your tax-free cash first, then your taxable income (on separate days).
• Once your plan closes, no further payments or contributions can be made.
• We’ll send your P45 within 6 weeks.

Declaration