Pension income

From the age of 55 you have a number of options available. You can leave your pension pot and continue to save or, if you want to take an income and need access to money in your pension, you can choose any of the below options.

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.

SIPPs are a pension product and you will not be able to withdraw your funds until you reach the age of 55.

Understand the risks (PDF, 64 KB)

Leaving your pension pot invested

You might be able to delay taking your pension until a later date.

If you don't need access to your pension pot then you can leave it invested and continue to save.

Use your pot to buy a guaranteed income for life – an annuity

You can normally withdraw up to a quarter (25%) of your pot as a one-off tax-free lump sum, then convert the rest into a taxable income for life called an annuity.

An annuity provides you with a guaranteed, regular retirement income for the rest of your life. Once you’ve chosen an annuity you can’t stop it or change it so it’s an extremely important decision.

Withdraw income from your pension in one of two ways

Use your pot to provide a flexible retirement income – flexi-access drawdown

With this option you can normally take up to 25% (a quarter) of your pension pot as a tax-free lump sum and leave the remaining amount invested.

You can then choose the income level you want to withdraw from the SIPP (within certain limits), but any further withdrawals are subject to your usual rate of income tax.

Take taxable lump sums - uncrystallised funds pension lump sum

You can take a one-off payment from your pension or a series of lump sums, keeping the remainder of your pension invested. The first 25%, of each lump sum, is tax-free, with the remainder subject to tax at your usual rate of income tax.

When withdrawing income as part of flexi-access drawdown or uncrystallised funds pension lump sum, you’re still in full control of your pension, so it is important to review and monitor your investments regularly.

Want to know more?

If you’d like to find out more about your income options at retirement, for your SIPP, please read our Benefits Guide (PDF, 147 KB) and Information on Taking Benefis (PDF, 79 KB).

Need more help?

Guidance on your options is also available from Money and Pensions Service, a free and impartial government service. It is not intended to be a substitute for free financial advice. More information can be found at

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