Accessing your pension
Important information: What you do with your pension is an important decision that you might not be able to change. You should check you're making the right decision for your circumstances and that you understand all your options and their risks. The information on our website isn’t personal advice, but we can offer financial advice if you'd like it.
In this video, we explain the key retirement options available such as annuities, drawdown and UFPLS.
What are my retirement options?
The earliest you can access your pension is usually 55 (rising to 57 from 2028).
It's up to you when you take it. And if you don't need the money yet, you can leave it for future. Below we compare the main retirement options for taking money from your pension.
The government's free and impartial Pension Wise service can help those aged 50 or over understand what type of pension they have, how to access their pension savings and the potential tax implications of each option.
Tax rules can change, and the benefits will depend on your own circumstances.
Compare your retirement options
There are three main ways you can access your pension: by getting an annuity, moving money into drawdown and taking lump sums. You can also mix and match your retirement options, which could help you find the right balance of security and flexibility.
Annuities
Swap money in your pension for a guaranteed income for the rest of your life.
Tax
You can usually take up to 25% tax‑free cash at the start. Your income is taxable.
Benefits
Your income is guaranteed for life. This is true no matter how long you live or what the stock markets are doing.
You can choose options so your income increases. This means your buying power could keep up with inflation.
Your income could continue after you die if you've chosen certain options when you get quotes and apply.
Risks
You can't change your options if your circumstances change.
You can't cash in your annuity.
Annuity rates might rise in the future, but you won't benefit from this if your annuity is already being paid.
Drawdown
Keep your pension invested. Take the income you want, when you want.
Tax
You can usually take up to 25% tax-free cash at the start. Any income you withdraw is taxable.
Benefits
Withdraw what you want, when you want. So you keep your options open if your circumstances change.
Potentially beat inflation with returns from your investments. You could maintain your buying power as prices rise.
Pass on your money – when you die this can normally be paid as a lump sum or as income.
Risks
You could run out of money if you withdraw too much too soon, your investments don’t perform as you’d hoped or you live longer than expected.
Income isn’t secure, it could fall or even stop completely.
It’s possible you’ll get back less than you originally invested, as all investments can fall as well as rise in value.
Lump sums
Keep your pension invested. Take the lump sums you want, when you want
Tax
Usually 25% of each withdrawal is tax free, and the rest is taxable.
Benefits
Withdraw what you want, when you want. So you keep your options open if your circumstances change.
Potentially beat inflation with returns from your investments. You could maintain your buying power as prices rise.
Pass on your money – when you die this can normally be paid as a lump sum or as income.
Risks
You could run out of money if you withdraw too much too soon, your investments don’t perform as you’d hoped or you live longer than expected.
Income isn’t secure, it could fall or even stop completely.
It’s possible you’ll get back less than you originally invested, as all investments can fall as well as rise in value.
Should I combine my pensions?
Consolidating your pensions is a good way to take control of your pension savings - particularly as you approach retirement.
It will make it easier to see exactly how your investments are performing, and if you're on track to reach your retirement goals. But remember transferring isn’t right for everybody. If you’re thinking about combining your pensions, check you won't lose valuable guarantees or benefits or have to pay excessive exit fees.
Why use HL's retirement service?
✓ Access to all the main pension income options
You have the freedom to choose a flexible or secure income at retirement. You can pick drawdown, take lump sum payments, opt to buy an annuity or even mix and match your options.
✓ Get the best annuity rates
You can get live annuity quotes from all UK annuity providers on the open market within minutes. Our annuity calculator allows you to shop around to get the best deal.
✓ Manage your account with ease
You can check your pension income and investments whenever you like, online and with the award‑winning HL app.
Helping people save and invest for over 40 years
Trusted by over 2 million clients
We’re a financially secure company, authorised by the Financial Conduct Authority. And have won over 200 awards.
Expert knowledge and guidance
Get the latest investment news, research and insight. Plus tools to help you make decisions with confidence.
Ongoing support
Help from our UK-based client support team. Or personal financial advice from our highly qualified experts.
Guides & tools
Best Buy Pension
Boring Money Best Buys 2026
Best for Investment Research
Boring Money Best Buys 2026
Best for Customer Service
Boring Money Best Buys 2026
Help and support
Take a look at our most frequently asked questions for quick answers.
If you need more assistance or have specific questions, please contact us.