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.
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
What do 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 orginally 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.
If you’re thinking about combining an annuity and income drawdown to provide your retirement income, we recommend that you get professional advice.
Want to estimate how much you’ll have?
Use our retirement planner to see if you’ve got enough for your plans and the options that might work best for you.
Ways to use your pension
Find out more about the retirement options we offer and compare your options here.
A flexible way to use your pension by taking money as and when you need to through income drawdown.
Guaranteed income for life
Use some or all of your pension to buy an annuity that pays you a regular and guaranteed income for the rest of your life.
Take it all in cash
One option is to take all of your pension in one go. If you’re thinking of doing this, there are some things to be aware of.
Take a look at our latest news and guides.
5 Apr 2019
ISAs vs pensions
Explore the features and benefits of ISAs and pensions to help you work out what’s going to work hardest for your retirement savings.
5 Apr 2019
How the State Pension works
Understand when you can claim the State Pension and how much it’s likely to be to start planning for a secure and happy retirement.
29 Nov 2018
What is a pension?
Find out about the different types of pension and how they can help you enjoy a happy and secure retirement.
29 Nov 2018
What happens to your pension when you die?
If you’re thinking about how you can provide for your loved ones, find out if and how your pension can be passed on.
16 Apr 2018
Your Friends Life pension questions answered
Friends Life is now part of the Aviva group. Find out how this affects your Friends Life pension.
17 Jan 2018
How much should you pay into your pension?
Get some help working out how much you need to pay into your pension to help you achieve the retirement lifestyle you want.