Annuity
You can normally withdraw up to 25% of your pension pot as a one-off tax-free lump sum and convert the residual pension pot into a taxable income for life, known as an annuity. You can also choose to provide an income for life for a dependant or other beneficiary after you die.
You can normally withdraw up to 25% of your pension pot as a one-off tax-free lump sum and convert the residual pension pot into a taxable income for life, known as an annuity. You can also choose to provide an income for life for a dependent or other beneficiary after you die.
Flexi Access Drawdown
You can use your existing pension pot to take cash as and when you need it and leave the rest invested where it can continue to grow tax-free. For each cash withdrawal, usually the first 25% is tax-free and the residual taxed as income.
Which option or combination is right for you will depend on:
- Your age
- Your health
- Your anticipated retirement age
- Sources of all other income and the tax treatment of such
- Whether you have financial dependants
- Your risk profile
- The value of your pension pot and other savings
- Whether your circumstances are likely to change in the future
- Retirement income available from your spouse/partner
You can use your existing pension pot to take cash as and when you need it and leave the rest invested where it can continue to grow tax-free. For each cash withdrawal, usually the first 25% is tax-free and the residual taxed as income.
Which option or combination is right for you will depend on:
- Your age
- Your health
- Your anticipated retirement age
- Sources of all other income and the tax treatment of such
- Whether you have financial dependents
- Your risk profile
- The value of your pension pot and other savings
- Whether your circumstances are likely to change in the future
- Retirement income available from your spouse/partner
The value of the investments and any income from them can fall as well as rise. You may not get back the amount originally invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
