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Your pension income options

Decide what works best for you

The earliest you can take your pension is usually 55 (rising to 57 from 2028).

It’s up to you when you take it. If you don’t need the money yet, you can leave it. We can help you prepare for your retirement too.

If you want to access your pension pot, there are three main ways you can do this. You can also mix and match options for taking from your pension which could help you find the right balance of security and flexibility.

Compare your options

Overview

Tax

Benefits

Risks

Annuities

Swap money in your pension for a guaranteed income for the rest of your life.

More about annuities

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.
  • 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.

More about drawdown

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, 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.

More about lump sums

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, 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.

Compare your options

Annuities

Swap money in your pension for a guaranteed income for the rest of your life.

More about annuities

Drawdown

Keep your pension invested. Take the income you want, when you want.

More about drawdown

Lump Sums

Keep your pension invested. Take the lump sums you want, when you want.

More about lump sums

Accessing your pension with the HL SIPP

It could make sense to bring all your pension pots together. Combining old pensions into a SIPP (Self-Invested Personal Pension) makes it easier to see exactly how your investments are performing and if you’re still on track to reaching your retirement goals.

If you transfer old pensions into the HL SIPP, you can access your pension in the ways outlined above. What’s more, a wide choice of investments means that if you choose to keep your pension invested, you can do this in a way that suits you. Before transferring, please check that you won't lose any valuable guarantees or benefits, or incur excessive exit fees.

More about the HL SIPP

Guides to help you plan

Your options at retirement

Tips for choosing the right options for you

Download

Annuities

Providing a secure income from your pension

Download

Drawdown

Taking a flexible income from your pension

Download

Lump sums

Withdrawing your pension in one go, or a bit at a time

Download

Passing on wealth

What happens to your pension when you die

Download

Retirement options quiz

Test your knowledge and pick up some top tips

START QUIZ

More ways to get help

Guidance from Pension Wise

Pension Wise is a free, impartial government service for anyone aged 50 or over, with a UK based personal or workplace pension.

It can help you understand what type of pension you have, how you can access your savings and the potential tax implications of each option. But it isn’t financial advice.

More about Pension Wise

Have a question?

Our Bristol-based helpdesk are here for you six days a week. Our friendly and knowledgeable team are ready to answer your questions no matter how big or small.

Call us on 0117 980 9926

Opening hours
Monday - Friday: 8am - 5pm
Saturday: 9.30am - 12.30pm

Alternatively, you can email us.

Retirement Advice from HL

Retirement is a time when many people may feel unsure about what to do with their money and need help to make decisions about their financial future. Our financial advisers can work with you to:

  • Understand how much you need to retire and plan your personal budget and retirement income strategy
  • Give advice on your pensions, including which option might suit you best
  • Make sure your investments match your goals

Discover retirement advice

Remember all investments and any income they produce can fall as well as rise in value so you could get back less than you invest.

Retirement Advice from HL

Retirement is a time when many people may feel unsure about what to do with their money and need help to make decisions about their financial future. Our financial advisers can work with you to:

  • Understand how much you need to retire and plan your personal budget and retirement income strategy
  • Give advice on your pensions, including which option might suit you best
  • Make sure your investments match your goals

Discover retirement advice

Remember all investments can fall as well as rise in value so you could get back less than you invest.