Choosing when to access your savings

Did you know that although the default pension age for the Plan is 65, you have the option to take your retirement savings from age 55?

Tackling tax

Once you start taking your retirement savings (whether as a guaranteed income or via drawdown), it’s taxed in the same way as your earnings were. However, you don’t pay National Insurance contributions on any pension income.


Don’t forget that you can take up to 25% of your retirement savings tax free – it’s the remaining 75% that you’ll be taxed on.


If you decided to take some of your retirement savings while you’re still earning you need to bear in mind that you might end up paying more tax if it takes you into a higher tax bracket.

As part of your decision about when to access your savings you should first check the total amount you’ve saved (including any other pensions you may have and other assets or personal savings), and then consider the following:

  1. What income you’ll want in retirement: Think about your current income, and how much you could afford to live on when you retire, and do all the things you want to do. You’ll need to take these factors into account to work out what annual income you’ll want (and need) when you’re no longer working. If you feel like you need more, it may be worth delaying accessing your savings until you’ve saved enough to meet the income you think you’ll need.
  2. Your chosen retirement age: You may have selected your retirement age some years ago, and you may now want to retire earlier or later. You may find you’d like to build your retirement savings further, and so want to carry on working and contributing. In that case you’ll need to select a new retirement age, and also consider where your savings are invested.

You could retire later than the default pension age

You may continue working after your default pension age of 65. You have some additional choices if you do decide to do this:

  1. You can continue to contribute to your existing Account and your Employer’s contributions will also continue until you do decide to retire.
  2. You can take your retirement savings (either as a guaranteed income or transfer your Account to an Income Drawdown facility) whilst you continue to work.  You will stop being a member of the Plan and no contributions will be paid in by either you or your employer.
  3. You can stop contributing into your Account but not take any of your retirement savings until you actually retire.  Your account would remain invested even though no contributions would be paid in by either you or your employer.

In addition, you’ll be covered for life assurance while you remain working (up to age 75).  If you receive cover for the dependant’s death in service pension, this cover will continue only while you continue to contribute to the Plan (Option 1 above).

Your savings, your choice

If your plans have changed and you’re reviewing the next steps, you may also want to remind yourself of the options you have when it comes to taking your savings. You can read more about these options on the 'Shaping your retirement' page.