Taking your pension

Unlike some other pensions, Retirement Account offers a range of ways to take your pension when you retire.

Your options when you retire

Your options when you retire

When you set up a Retirement Account you’ll be asked to choose how you’d like to take your pension, this is so we know how to invest it over time. This means you can leave the investing up to Scottish Widows and, of course, you can always change your mind later. 

If you’re not sure of your risk appetite or how to take your pension at retirement, you can choose the default option. This is a balanced Governed Investment Strategy (GIS) that targets flexible access at retirement. This could suit a typical customer and reflects what we most commonly see in terms of risk appetite and retirement options. The default strategy is not personalised to you, and it may not meet your needs at retirement, so please consider this when making a decision about your investment options.

If you’re unsure what to choose, you can always seek financial advice. There will be a charge for this service.

You can usually start taking your pension any time after the age of 55 (57 from April 2028). But that doesn’t mean it’s right for you and so you should consider all your options. For example, you could carry on working and keep your whole pot invested until you want to reduce your working hours or stop working altogether.

Get a guaranteed income for life

Get a guaranteed income for life

Take up to 25% of your pension pot as a tax-free cash lump sum and use the rest to get a regular and secure taxable income for life. This type of income is known as an annuity.

There are different types of annuity which vary how much income you would get. You can usually choose to provide income for life and a loved one after you die.

Access it flexibly

Access it flexibly

Take up to 25% of your pension pot as a tax-free cash lump sum, and leave the rest invested, you can then take taxable withdrawals as-and-when you like. This is known as flexible access drawdown.

The level of income you take and any investment growth will be key factors as to how long your pension pot will last and you may run out of money in retirement without careful planning.

Take some or all of your pension as cash

Take some or all of your pension as cash

You could take part of your pension or close your pension and take the whole amount as cash in one go. The first 25% of each amount you take is tax-free and the rest is taxed at your highest tax rate by adding it to the rest of your income for that year, please bear in mind this could take you into a higher tax bracket. This is known as encashment.

However, be aware that without very careful planning you could run out of money in your retirement.

Bear in mind that your circumstances can change and you may decide to defer your retirement which means you can leave your savings invested. When it comes to tax-free cash, the Governments tax rules may change too.

Your questions answered

  • You may already have a good idea how you want to take your pension. It’s important to go back to basics and think about your situation before deciding. The decision should be based on a number of things including your age and health, if you plan to stop working altogether or just reduce your hours, whether you’ve got financial dependents and if you’re looking for a fixed or flexible income.

    You need to consider how much you think you might need to spend in retirement and also think about whether you plan on using any savings or assets you have outside of the pension to help to pay for these. You might be considering downsizing your home for example.

    To help you understand what income you will have in retirement you can find out if your eligible for and how much you might receive as part of the Basic State Pension, you can find out more about this here. Do remember that you won’t be able to take your State Pension until you’re in your mid to late 60’s.

    Check your state pension

  • Yes, you can pay into your pension even when you’ve started taking an income or taken some of it as a cash lump sum however you’ll only get tax relief on contributions of up to £4,000 a year*. This is known as the money purchase annual allowance.

    *Please bear in mind tax rules may change in the future and may be different depending on where in the UK you are. Your own circumstances may also change, for instance the rate of tax you pay may alter.

  • If you’re in ill health you may be able to choose to take your pension benefits before age 55. If you are in serious ill health you may be able to take your whole pension pot as tax-free cash. Serious ill health means you have been diagnosed with less than 12 months to live.

  • If you plan to take money from your pension soon after you transfer to us, this is an important decision. As such, we’ll ask if you’ve had financial advice or Pension Wise guidance, or if you would like some before proceeding with your transfer.

    What is financial advice?

    This is what you’d get from a Financial Adviser. They’ll talk to you about what your finances look like today, and your plans for tomorrow and recommend the best products to suit your personal situation. They’ll normally charge you for their advice.

    Find out more about financial advice or you can also get help to find an adviser through Scottish Widows

    Who are Pension Wise?

    Pension Wise from Moneyhelper, offers free and impartial guidance about your pension options. It’s a government service where you can get an appointment with a Pension Wise specialist, who will talk you through your options. Find out more about Pension Wise, by visiting the MoneyHelper website. 

Before you start

Before you start

We will need the following details from you to help when contacting your existing provider;

  • Your National Insurance number
  • Your existing pension providers name
  • The policy numbers of each pension you want to transfer
  • The Scheme name if it's a workplace pension
  • A recent value for each pension

How to apply

How to apply

Ready to transfer your old pensions into one easy to manage account?

You can open a Retirement Account with Scottish Widows in just a few steps. Before you start make sure you’ve reviewed:

Apply to transfer my pension

Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.

Eligible investments with us are protected by the Financial Services Compensation Scheme (FSCS). For further information about the compensation provided by the FSCS, refer to the FSCS website at www.fscs.org.uk/. You can also visit our Financial Services Compensation Scheme page for more details.