Taking money from your pension

At age 55 you can take an income from your SIPP, or you can continue to contribute. If you want to start taking an income or just need access to your pension pot, you can choose any (or a combination) of the below.

  • If you don’t need an annuity (a secure and regular income) you can ‘drawdown’ an income from your SIPP (within certain limits). You continue to make any investment decisions and the value of your SIPP will depend on how much you take out and/or how your investments perform.

    If you wish to transfer a pension to your Bank of Scotland Share Dealing SIPP from which you have already started taking benefits, please complete the Transfer In Drawdown Benefit Form (PDF, 179KB). This form should be completed in addition to your SIPP application (for new customers only) and the relevant transfer-in form(s). If you are transferring more than one pension in drawdown please complete one form for each transfer.

    If you decide to drawdown you also need to be aware of any charges which apply.

    Please read the Transfer to Bank of Scotland section below, as there are is more information you may need to consider.

    We don't provide advice so if you are in any doubt about making your own investment decisions we recommend you seek advice from a suitably qualified financial adviser. There will normally be a charge for that advice.


  • You can take a one-off lump sum or series of lump sum payments from your pension, keeping the remainder of your pension invested. The first 25% will be tax free and the remaining pension will be subject to your usual rate of UK Income Tax.


  • Annuities turn your pension into a regular and secure income which is payable for the rest of your life. It’s important you make the right choice when choosing an annuity as it can’t be stopped or changed.

    To learn more about your options, read our Benefits Guide (PDF, 213KB).

Transfer to Bank of Scotland

  • It’s easy to transfer your pension to us - all you need to do is complete our application pack.

    • Transfers usually take around 8 - 10 weeks
    • If you already have a SIPP with us then just complete our transfer form (PDF, 223KB).
    • Return the original form by post to the AJ Bell address provided.

    Have you already started taking benefits from your SIPP? If yes, you’ll need to complete our Transfer In Drawdown Benefit Form (PDF, 179KB) as well.

    Are you transferring a final salary pension worth more than £30,000? You’ll need to get independent financial advice and ask your IFA to sign our Financial Advice Declaration form (PDF, 84KB).


  • To switch your pension to us you need to consider a few things first.

    • Have you contacted your pension provider first to find out if you’re able to transfer? Some pensions will not be transferable.
    • Your current provider may have exit and transfer fees.
    • By transferring you may miss out on potential pension benefits with your current provider.
    • Costs and charges vary between pension providers, familiarise yourself with any differences before starting a transfer.
    • If you’re transferring funds to us from another broker we might hold a different fund class than the one you hold now. This means we may need to convert your fund into a class that can be transferred, which may be more expensive or could be cheaper. We do this to make sure your fund does not have to be sold as part of the transfer. Once the transfer is complete, we’ll make sure that you hold the cheapest fund class we have available for investment.

    If you’re transferring a final salary pension worth more than £30,000 then you will need to get independent financial advice. Your advisor will need to sign a Financial Advice Declaration form (PDF, 84KB) before we can start the transfer.


  • This will vary and is dependant on how quick your current pension provider responds to us, however usually a transfer will take around 8 – 10 weeks. If we experience any problems we’ll contact you, so please make sure contact details are up-to-date.


  • We charge £60 per pension you transfer to us, up to a maximum of £300. Your current pension provider may also charge you transfer or closure fees.


  • There may be a period where you cannot buy or sell investments as transfers can take several weeks to complete.

    You may suffer losses as a result of buying back investments if your current pension provider only allows transfers in the form of cash.


Tax relief

More detail on how you can benefit from tax relief.

  • If you pay tax at a higher rate than basic tax rate you can claim any further tax relief to which you are entitled via self-assessment. If you are a Scottish or Welsh taxpayer and you pay tax at a rate higher than basic rate, you will be entitled to claim further tax relief at that higher rate. If you pay tax at lower than the basic rate of tax you will still be entitled to receive tax relief at the basic rate.


  • If funds are credited to your SIPP on or before the 5th of the month, we’ll reclaim the basic-rate tax relief from HMRC and pay it as cash into your SIPP account on the 25th of the following month (this date is subject to weekends/bank holidays).

    For example, if we receive your contribution on the 1st April, we’ll pay the tax reclaim into your account on the 25th May. However, if we receive your contribution on the 6th April, we’ll pay your tax reclaim on the 25th June.


Interest rates

The Self-Invested Personal Pension (SIPP) will pay interest on any cash balance of £1 or above held in the account. Interest is accrued daily and paid gross annually in March. The interest rate payable on our Self-Invested Personal Pension (SIPP) is variable at 3.55% (Gross/AER).

The current rates that are applicable are shown below.


SIPP interest rates

SIPP interest rates


Interest Rate (Gross)/AER

Date Effective


£1 and above

Interest Rate (Gross)/AER


Date Effective



£1 and above

Interest Rate (Gross)/AER


Date Effective



£1 and above

Interest Rate (Gross)/AER


Date Effective



£1 and above

Interest Rate (Gross)/AER


Date Effective


Interest rates are subject to variation. The amount you receive may change depending on the interest rate Bank of Scotland Share Dealing receives on the cash balances we hold across all accounts and market rates.

The rates we receive can be above or below the prevailing base rate for cash held within your SIPP. We use any payments received to pay you interest at the rates shown on our website.

There is currently no requirement for you to hold a minimum amount in cash, although you should ensure that there is sufficient cash held to cover charges when they are due for payment.

AER (Annual Equivalent Rate) - this illustrates what the interest rate would be if interest was paid and compounded once each year.

Gross rate means we will not deduct tax from the interest we pay on money in your account. It’s your responsibility to pay any tax you may owe to HM Revenue and Customs (HMRC).


Useful forms

All of our SIPP forms can be found here as well as what you’ll need them for.

Send completed forms by post to the AJ Bell address provided. Alternatively you can scan original signed forms and email them. We will also accept a photograph of an original signed Additional Contribution Form. These need to be emailed to Please sign the form by hand as we can’t accept electronic signatures.


Understanding the risks

Pension schemes are there to provide you with an income during retirement. However, your decisions will affect the benefits you are able to receive from your SIPP. Take a closer look at these below.

  • You may have to give up some benefits and guarantees such as the amount you receive, and the level of increases applied to your pension in the future when transferring your SIPP from another provider. Your existing provider may also apply a penalty or other reduction to the value of your benefits and there is no guarantee you will be able to match any existing benefits that you give up by transferring.

    If you are in any doubt about transferring, we would recommend that you take advice from a suitably qualified professional adviser. There will normally be a charge for that advice.

    As your benefits are affected by the level of contributions made into your SIPP, you may receive fewer benefits by delaying any payment contributions. If you have a smaller SIPP value it’s important to know that administration charges could be too large in comparison to the value of your SIPP.


  • You may have heard the phrase ‘don’t keep all your eggs in one basket’ - this is good advice and especially so with investments. Spreading your money over a range of investments helps reduce risk. Bear in mind however that each different investment carries their own type and level of risk and all investments involve a degree of risk.

    The value of the investments in your SIPP can fall as well as rise and you may not get back the full amount that you invested.

    With so many options, it can be hard to choose where to start. That's why, working with AJ Bell, our SIPP administrators, we offer a SIPP Start-Up Fund. The fund aims to help people save for retirement through steady growth over the long term.


  • The level of the benefits may be lower than expected and may not meet your needs in retirement if you decide to take them earlier than you originally planned.

    If your pension is valued at more than the Lifetime Allowance (the maximum you can hold in a SIPP without facing tax charges) then you might be required to pay additional tax charges at the point you withdraw money.

    Taking income from your SIPP may erode the capital value of your fund. If you take high levels of income when investment returns are poor this will mean your SIPP falls in value and could result in a lower future income.

    Income from annuities are based on the life expectancy of someone your age. When you fix an annuity rate, providers will take into account some people die earlier than expected which subsidises those who live longer. Income withdrawals paid from the SIPP doesn’t have this benefit.

    As there aren't any guarantees that annuity rates will improve in the future, the level of pension you receive when purchasing an annuity may be more or less than the pension being paid under income withdrawal and/or an annuity you could have bought previously.

    If you have any doubts about a SIPP, we would recommend you seek advice from a suitably qualified professional adviser. There will normally be a charge for that advice.

    For more information about SIPPs, please read the Key Features Guide (PDF, 155KB).


The Bank of Scotland SIPP

Find out more and apply

Please remember that the value of an investment and the income from it can go down as well as up and you may get back less than you invested. We don't provide advice so if you are in any doubt about making your own investment decisions we recommend you seek advice from a suitably qualified financial adviser. There will normally be a charge for that advice. Tax treatment depends on individual circumstances and may change in the future.

Bank of Scotland Share Dealing Service is operated by Halifax Share Dealing Limited. Registered in England and Wales No. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.