Mix and match your retirement options

Use your pension your way

Combine options to meet your needs

Blending your retirement options can give you a balance of flexibility and security to suit your circumstances.

A range of options

You choose the combination of income and cash withdrawals to suit your circumstances

Getting the most out of your pension

Find the right balance between guaranteed income and flexibility


Choose a retirement plan that changes as your retirement needs change

Before you make your decision, just make sure you’re aware how every option works.

What are your options?

Set up a combination of options to suit you. You can usually take up to 25% of your pension money as tax-free cash as you choose which options to take.

Remember that with any option, tax benefits are subject to change and depend on your individual circumstances.

Flexible income

Take money from your pension when you need it and keep the rest invested through income drawdown.

Guaranteed income for life
Use your pension to buy an annuity, which gives you a guaranteed income for the rest of your life.

How does it work?

Everybody’s situation is different, so how you combine the options is up to you. 

  • You could choose to buy a guaranteed income for life with some of your pension money, while leaving some to provide a flexible income or cash lump sums when you need them
  • Or, if you plan to ease into retirement, you may choose to take some money flexibly to start with and then later buy an annuity to provide a guaranteed income
  • Don't forget, in addition, you can usually take up to 25% of your pension tax free. This can be taken all in one go or over time, depending on the options you choose 

You can read more about the different pensions options here.

What you need to consider

  • Your options
    Firstly, you should look into each option thoroughly to check whether it’s right for you. There are lots of different providers you could choose, each offering different ways to use your money in retirement. They’ll also each have varying fees, charges, and ways to manage funds that could be key factors in choosing the right option for you. 
  • Your circumstances
    A lot depends on the amount in your pension and your lifestyle. The amount you need now and in the future when you’re retired may vary – it could be that you don’t need as much as expected because your outgoings decrease, or you could need more to cover unexpected costs when you’re older. We have a range of tools and calculators that could help you work out how much you could need.
  • Your pension
    You’ll need to understand the terms and conditions of your pension policy. There may be benefits and guarantees that are affected if you choose certain options or take money from your pension earlier or later than originally planned.  You may find that transferring your pension to another provider gives you more options, but you should make sure it's in your best interests before taking action. There’s also the state pension to think about, and how that could supplement your personal pension. 
  • Your investments
    If you decide to keep money invested, its value could go down as well as up and there’s always the risk you could get back less than has  been paid in. You’ll also keep paying any related fees and charges. So, make sure you’re happy with how your funds are invested and consider your appetite for risk. 
  • Your tax allowances
    You’ll need to understand the tax implications, which depend on the options you want to combine and the amount of money you’d like to allocate to each. Tax treatment is based on your personal circumstances and may be subject to change in the future. If you’re unsure about anything, it’s a good idea to get financial advice.

Financial advice

If you’re thinking about combining an annuity and income drawdown to provide your retirement income, we recommend that you get professional advice.

Pension Wise

Pension Wise from MoneyHelper is a free, government-backed service offering clear, impartial and specialist guidance on your retirement options. If you’re aged 50 or over, this service is available to you.


Visit the MoneyHelper website or call 0800 138 3944 for full details of the service.

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