Taking your pension
Unlike some other pensions, the Retirement Account offers a range of ways to access your pension benefits using the same policy.
Your options when you retire
When you set up a Retirement Account you’ll be asked how you’d like to take your pension benefits. This is so the GIS can invest it as required as you near your retirement date. This means you can leave the investing up to Scottish Widows.
However, if your plans change, you can amend how you want to take your benefits or your chosen retirement date at any time.
The current minimum retirement age is 55 and that’s when you can start accessing your benefits. But that doesn’t mean it’s right for you and so, before making a decision, you should consider all your options. For example, you might just want to reduce your working hours and access only some of your benefits rather than stopping working altogether.
You need to consider that your circumstances can change and you may decide to defer your retirement, take it early or change how you want to access your benefits. Individual tax circumstances and tax rules can change.
Your questions answered
You may already have an idea of how you want to take your pension benefits. However, it’s important to go back and review your situation before finally deciding. Your 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, if you’ve got financial dependents and whether you’re looking for a fixed or flexible income.
You should consider how much you might need to spend in retirement and also think about if you’re planning to use any savings or assets you have outside of the pension e.g. you might be considering downsizing your home.
To help you understand what income you will have in retirement it’s worth seeing what you might receive as part of the Basic State Pension. Do remember you won’t be able to take your State Pension until you’re in your mid to late 60’s.
If you’re in ill health you may be able 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.
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.