Using my pension money

Using your pension money now could help your finances, but also affect your future.

Freedom to choose

From the age of 55, you have the freedom to use your pension money. You can take up to 25% tax-free and the rest will count as part of your annual income, taxed at your marginal rate. So, what are your options?

Withdraw all your pension money

Take money whenever you need to

Buy an income for life

Leave your money where it is

You can also mix and match to suit you

Things to think about

Using your pension money will leave less money in your pension, and will have an impact on:

  • The money you’ll have in retirement. Anything you use now will mean less, or even nothing at all, is left in your pension.
  • The value of your investments. If you choose to only withdraw some of your money, what’s left will remain invested, and could go down as well as up in value. You could get back less than has been invested.
  • The access you have to your money. Once you buy an income for life you can’t generally change it or cash it in, even if your personal circumstances change.
  • The inheritance you can pass on. This depends on what you decide to do with your pension money. Find out more
  • You can get guidance on using your pension money with our Financial Advice team.

Stay on track

Whether your retirement’s a long way off or just around the corner, having a clear idea of how to achieve your aims is important. Aviva's simple online tools and calculators are here to help.

Looking for something?

The Aviva Pension

A flexible way to save for your retirement. It’s an individual, self-invested pension, so you control where your money goes.

Income Drawdown

Use as much or as little of your pension money as you want, whenever you want from age 55.

Annuity

Receive a guaranteed income for life when you retire.

Learn more about retirement

Important information about this video

The information contained within the videos on the Investment and Retirement site was, to the best of our knowledge and belief, correct at the time of filming and unless otherwise stated, relates to the 2018/2019 tax year. Tax rules may change in the future. These videos should not be used as a substitute for financial advice and the content may not apply to your personal circumstances. If you are not sure whether this product is right for you, you should seek financial advice. If you do not currently have a financial adviser you can find one here.

Your options at 55

Video transcript

VO: If you’re 55 or older and have a defined contribution pension, you have four main choices over how to access the money you’ve saved:

One - withdraw all your pension money

Two - take money whenever you need to

Three - use it to buy yourself an income for life

Or four simply leave the money where it is. You can make your choices later.

You’ve got to think about the taxman too. You can usually take 25% of your pension fund tax free. The rest will count as part of your annual income, which you’ll be taxed on at your highest rate.

As tempting as it might be to withdraw all of your pension money now, you need to think carefully about how much you’ll need to live on as it may need to last you the rest of your retirement. Once you’ve made a decision, you may have to stick with it.

But that doesn’t have to mean you take nothing from your fund. You might want to take some cash to do some home improvements, or take a holiday.

Or you might find you could save money by taking a cash lump sum to put towards paying off any debts. Remember, any money left in your pension will remain invested and the value could go down as well as up, so you may get back less than has been paid in.

Whatever you decide to do, it’s worth giving some thought to your plans for your pension fund right now.

Otherwise, when the time comes to finally put your retirement plans into action, the wheels might come off.

Aviva Life & Pensions UK Limited. Registered in England No 3253947. Aviva, Wellington Row, York, YO90 1WR

Trace your lost pensions

Video transcript

These days, people change jobs frequently.

As a result, they may have pensions that they’ve forgotten about or have lost the paperwork for.

Don’t worry if this sounds like you, because you can get free help from the Government’s ‘Find Pension Contact Details’ webpage.

Just go to www.aviva.co.uk/retirement/pensions/pension-tracing/

(Web address moves to bottom of the screen and stay son screen through the duration of the video)

And contact the Pension Tracing Service. Their details can be found on our pension tracing page.

You’ll just need to know the type of pension you’re looking for, whether it be a;

  • A workplace pension
  • A personal pension
  • Or a civil service, NHS, teacher or armed forces pension.

You’ll also need to know the employer’s name.

The Pension Tracing Service will then give you the details you’ll need to contact your pension scheme provider.

To help your pension provider when you contact them, please have to hand your full name, home address and any other contact information, like phone number or email.

It’s that simple!

What is equity release?

Video transcript

You’ve probably seen the value of your home increase over time

and this could mean that you may be able to use some of this equity to release a cash sum.

You may not look on your home

as part of your financial planning

but if its value has gone up, you may have been saving

for your future without realising it.

If you’re over 55

and you own a home worth at least £75,000

you may be able to unlock some of your equity

and turn it into tax-free cash with an Aviva lifetime mortgage. It’s not suitable for everybody as it depends on your personal circumstances.

And releasing equity may affect your tax position and any entitlement to welfare benefits.

Also, you may have savings and it could make sense to use these first.

But if you’re eligible,

it’s a way to access money tied up in your home, without having to move.

There are no monthly repayments. The loan and interest are repaid usually from the sale of the house when you die or go into long term care.

This is subject to our terms and conditions.

Interest will be added to the loan and interest previously added each year. This quickly increases the amount you owe…

although you have the option to make limited repayments after you’ve had the loan a year, if you like.

A lifetime mortgage will reduce the amount of inheritance you can leave…

but an inheritance protection guarantee lets you safeguard a percentage of the value of your home to leave to your loved ones, …

although this will reduce the amount that you are able to borrow.

So, how could you use the money? Well, perhaps you need to make home improvements…

or, adaptations to your home as you get older, meaning you can stay put even if health and mobility becomes more of an issue.

Maybe you could help your kids towards getting on the property ladder,

help fund your grandchildren’s education,

or use it for special treats…

like a nice holiday or a new car.

So you might find…

you can hang on to all those good memories tied up in your home…

and make some more for the future.

You can read more about the features, costs and risks…

At www.aviva.co.uk/retirement/equity-release

Need some help?

Ask a question

There’s a lot to think about when planning your retirement. Take a look at our

Frequently Asked Questions.

Already a customer?

You'll find many of our products in MyAviva – but if yours isn't there, you can look it up here:

Contact us about another product

Back to top