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See our Frequently asked questions.
What are the pension freedoms?
The Government announced pension freedoms in the 2014 Budget and it started from 6 April 2015. It means anyone aged 55 has greater choice over how to use the money they've invested into their pension.
Access as much or as little of your personal pension as you want, to spend on what you want.
Choose if you want to put your money away in an annuity to provide an income.
Move your pension into drawdown to keep it invested and take an income from it.
Pass your pension onto your family tax-free.
With the new pension freedoms you can take your pension whenever you like. But actually building up your retirement investments in the first place isn’t always easy. We’ve looked at ways you can save during the build up to retirement.
Getting help with your pension planning
It's important to think carefully about your financial options when you plan for retirement. An adviser can help you understand your options and recommend the best path for you.
If you don't have a financial adviser you can use our handy service to find an adviser near you.
Help and support is also available through the Government's service Pension Wise.
Find an adviser local to you
You can normally take up to 25% of your pension fund as a tax-free lump sum. The reduced balance can then be used to buy an annuity or to start a drawdown pension.
An annuity is a policy you can get from an insurance company. You give them all or part of your pension fund to effectively buy the policy.
If you take a tax-free lump sum you can buy a policy with what’s leftover, although some insurance companies have a minimum amount. In return they normally give you a guaranteed income for the rest of your life. The income is taxable as pension income through PAYE.
You can use all or part of your pension fund to take an income, and if you take a tax-free lump sum, you can use what’s leftover to go into drawdown.
You can choose to vary how much income you take and how often, until the money runs out. Whatever you don’t take as income stays invested, so it can rise and fall over time and isn't guaranteed.
The income you take is taxable as pension income through PAYE.
Uncrystallised means you haven’t yet used or allocated the pension fund, or a particular part of the fund. For example, you may only allocate part of your total fund into a drawdown pension or to buy an annuity, so what’s leftover is ‘uncrystallised’.
You can take a one-off lump sum, or series of lump sums, and 25% of each will normally be tax-free. You’ll be taxed on the rest of the lump sum as pension income through PAYE.
You, and sometimes your employer, make contributions to build up a pension fund. You can then use this fund to take an income and/or a lump sum in your retirement.
What you can take depends on factors like how much you pay in, and the investment performance. The Elevate Pension Investment Account is a defined contribution scheme.
Sometimes they’re known as ‘money purchase’ pension schemes, and you’ll see this term in a lot of our literature.
Please bear in mind
Please note that the value of investments can go down as well as up and are not guaranteed. You could get back less than you invest.
Tax treatment is subject to change and dependent on individual circumstances.
Taking high income and/or lump sums may mean that you will pay more tax, and could cause you to enter a higher tax bracket.
By taking income from a pension fund, together with any charges, you are reducing the value of your pension fund and potential for future growth - particularly if you take high levels of income and/or investment returns are poor.