At the moment, from age 55, you can enjoy flexible access to your pension savings. This is increasing to age 57 from the 6th of April 2028.

You can set up a regular income or simply take some cash whenever you need it. The rest of your money will stay invested in your plan and aim to grow.

Usually, the first 25% of any money you take out of your plan will be paid tax free.

You can choose to take all your tax-free cash in one go or spread it out over a series of smaller payments.

When you die, any savings you have left can be passed on to your loved ones.

Things to watch out for:

With flexible access, there's a risk your money could run out earlier than you'd like, so you'll need to manage your income carefully.

If at any time you need more certainty you can always choose to buy a regular, secure income that'll be paid for the rest of your life.

To find out more about your retirement options, talk to your financial adviser, or visit

What is pension drawdown?

Pension drawdown lets you access your savings whenever you need them.

You’re in complete control - enjoy a regular income, or dip in and out whenever you like. Allowing you to take more money when you need it and less when you don't.

Your money is still invested so it has an opportunity to grow. There is a still a risk that it could go down and you could get back less than invested.

Download our retirement guide (PDF)

How does pension drawdown work?

Take tax-free cash

You can usually take up to 25% of your pension savings as a one-off lump sum or a series of smaller lump sums.

Choose an income

You can set up a regular income or if you ever need access to a larger amount, you can take this as a one-off payment.

Stays invested

You might choose not to access your pension savings just yet. And, whatever you leave in your plan will stay invested.

Get up to speed

If you’re planning to use pension drawdown, there’s lots to think about. Select a question below to see how it works and what it could mean for you and your pension savings.

  • Enjoy the income you need, when you need it

You can take cash withdrawals, set up regular income payments and make changes as often as you need to.

  • Take some tax-free cash

You can usually take up to a 25% of your pension savings as a tax-free lump sum*. This can be paid in one lump sum, or spread out over a series of smaller cash payments. You will also need to regularly review your funds and income to ensure your money lasts as long as it needs to.

  • Give your savings more time to grow

Whatever you leave in your plan will stay invested – meaning it still has potential to grow. The value of your investments can go up, as well as down. You could also get back less than what you invested.

  • Make changes whenever you like

If your needs change, you can use the pension savings you have left to buy an annuity – this will pay you a guaranteed, regular income for the rest of your life.

*You may be able to take more than this if you successfully applied to HM Revenue & Customs for a greater allowance.

  • You're still exposed to investment risk

While your money stays invested, there are no guarantees it will grow. So if your investments perform poorly, you could get back less than you started with.

  • You could run out of money before you die

With pension drawdown, your income isn't guaranteed to last forever. So if you take too much money, live longer than expected or if your investments don't perform as well as you'd hoped, you could run out of money before you die.

  • You’ll need to actively review your plan

As with any pension drawdown arrangement, regular reviews are key. You'll need to make sure the money you're taking out is sustainable - and adjust things if there's a risk your savings will run out too soon.

  • Saving into other pension plans could be restricted

When you start taking an income from a flexible access plan, the government puts a limit on how much you (and your employer) can save into other money purchase pension arrangements without a tax charge. This is called the money purchase annual allowance – and it’s currently set at £10,000 a year.

  • Your entitlement to state benefits could be affected

The amount of income and/or tax-free cash you take from your pension savings could affect your entitlement to means-tested state benefits, this includes such things as housing benefits and council tax reductions.

  • You should remember that tax rules depend on your individual circumstances and may change in the future.

If you have money left in your plan when you die, it can be passed on to your loved ones – usually free of inheritance tax.

  • If you die before age 75, your pension savings can be paid to your loved ones however they like, income tax free. If you have more than £1,073,100 then your loved ones will have to pay income tax on the part above this amount if they take it all out in one payment
  • If you die aged 75 or older, your pension savings can be paid to your loved ones however they like. Income tax will be due on the full amount.

Not ready to access your pension savings?

That's ok. You can choose to leave your money invested, giving it more potential to grow, but remember the value can go down as well as up.

If you're aged 55 or over (or age 57 from 2028), you can access your pension savings when the time is right for you. You can buy an annuity, dip in with pension drawdown, in part as a cash lump sum or you can choose a mixture of these options.

Next steps

We choose to distribute our personal pension products and services through financial advisers simply because we believe that’s the right thing to do. If you think pension drawdown might be right for you, the next step is to speak to an independent financial adviser. They can give you personalised advice and recommendations to match your individual needs and circumstances.

Find the support you need

Find a financial adviser

We strongly recommend talking about your retirement options with a professional financial adviser.

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Pension Wise

Pension Wise (external site) is a government service from MoneyHelper that offers free, impartial pensions guidance.

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Retirement planner

Tell us how much income you're looking for when you retire, give us a few personal details and we'll let you know if you're on track.

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Managing your pension

Looking for something different?

Want to consider other retirement options? Or perhaps this just isn't the thing you're looking for. Because there's so much choice, it's important that you take time to decide what's right for you.

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