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In this section
Taking money from your pension savings
How to take tax-free cash, lump sums or regular income
Important information: the value of investments and the income from them, can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). Before transferring a pension, compare all the benefits, charges and features and always seek advice if you are unsure.
Withdrawing pension savings - your options
If you're 55 and over and ready to start withdrawing money from your Self-Invested Personal Pension (SIPP) with Fidelity, we'll help you through the process online or by phone.
Through pension drawdown you can take tax-free cash, lump sums and regular income, while the rest of your pension savings remain invested.
If your pension is with another provider and you want to start income drawdown with Fidelity, you can transfer to Fidelity's SIPP, even if you've already started drawdown.
Important information - it’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our transfer factsheet. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
Before you get started
Before you take money from your pension, you may want to take some time to think about how you'd like to take it and the level of guidance you'd like along the way. We'll always go the extra mile to make understanding pensions as easy as possible, but they can be complex. So it's wise to take your time to understand what works best for you.
- Understand your options
Ensure you've considered all your pension options, including pension drawdown. - Essential reading
Please read our essential information to help you make your choice. Taking care of your retirement money and investing. - Call our retirement specialists
Need help with pension drawdown? Our retirement specialists offer free guidance and personalised paid for advice services. We're open Monday to Friday 8:30am - 5:30pm and Saturday 9am - 12:30 pm. Call 0800 368 6882. - Pension Wise
The government's Pension Wise service offers free, impartial guidance to help you understand your options at retirement. You can access their guidance online at Pension Wise or over the telephone on 0800 011 3797.
How to start
You'll find information below on withdrawing your pension savings, depending on your needs and criteria.
Apply to take tax-free cash or lump sums | Set up or change your income in retirement | Apply with Fidelity's retirement service |
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If you still have tax-free cash available from your pension you can take all or some of it online. If you'd like to take lump sums instead, where 25% of each withdrawal is tax free and the rest taxed as earnings, you can also do this online. You need to:
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If you want to take a taxable income or lump sum from your existing drawdown account you can do this online. Please read the Taking care of your retirement money before amending your income. Log in to your online account, select ‘Manage investments’ from the top of the page and then ‘Move or withdraw cash’. You'll need:
If you've applied for a one-off income payment - we'll use your available cash and/or sell any investments you hold proportionately to make the payment into your bank account. If there's sufficient cash available the payment will take 8 working days. If we have to sell any investments you'll receive the payment within 13 working days. If you're setting up regular income payments - we'll create your regular drawdown income plan and you'll receive confirmation in writing, including when the first payment will be made. |
There may be instances where you won't be able to complete your task online and will need to speak to Fidelity's retirement service. Phone lines are open, Monday to Friday 8:30am - 5:30pm and Saturday 9am - 12:30 pm. These instances include:
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Important information for when you start taking taxable money from your pension pot: If you want to continue saving into your pension after you start taking taxable money from it, the total amount you can contribute and receive tax relief on will be reduced to £10,000 a year under the money purchase annual allowance (MPAA).
Apply to take tax-free cash or lump sums online
What you'll be asked
You’ll be asked a series of questions to work out if you’re eligible to withdraw your pension savings online, including:
- If you've taken any pension benefits previously or are likely to exceed your lump sum allowance.
- Whether you have pension protection or a transitional tax-free amount certificate - as you may have a higher lump sum allowance than standard. Read more about the lump sum allowance
- Whether you have sought guidance or advice on your options at retirement, either with a regulated financial adviser at your own cost or with the government's Pension Wise service.
- Once you're in drawdown, whether you want to change where your investments are held.
What you need to consider
We’ll provide you with additional information to consider throughout the online application process. But before you begin, it helps to understand the two different ways you can withdraw your pension - Drawdown or Uncrystallised Funds Pension Lump Sum (UFPLS). You’ll need to know which route you want to take.
Drawdown (Flexi Access Drawdown)
If you want to take your tax-free cash only (25% of your total pension savings), you can do this with Flexi Access Drawdown (FAD).
You can either take all of the tax-free cash in one go or in stages.
Take all of the tax-free cash in one go
You can take out all of your tax-free cash in one go (typically a maximum of 25% of your pension savings). Once you've taken all of your tax-free cash the remaining balance goes into a drawdown account, which allows you take an income or lump sums, which are taxed as earnings.
Take your tax-free cash in stages
Or you can take some of the tax-free cash now and some later. By taking it in stages you'll be leaving more of your money invested, so it has the potential to continue growing. Once you've taken all of your tax-free cash the remaining balance goes into a drawdown account, which allows you take an income or lump sums, which are taxed as earnings.
At any time, you can choose to use any remaining money in your FAD account to buy an annuity.
Important information for when you start taking taxable money from your drawdown account: If you want to continue saving into your pension after you start taking taxable money from it, the total amount you can contribute and receive tax relief on will be reduced to £10,000 a year under the money purchase annual allowance (MPAA). Learn more about the MPAA.
Uncrystallised Funds Pension Lump Sum (UFPLS)
Another route is UFPLS, where you can take lump sums and 25% of each withdrawal is tax-free and 75% is taxed in the same way as earnings. The rest of your pension pot remains invested until you choose to make another lump sum withdrawal.
Take out lump sums which are a combination of tax-free cash and taxed income
After starting withdrawals, at any time you can choose to take a different retirement option with any remaining money in your pension pot.
Important information for when you start taking taxable money from your pension pot: If you want to continue saving into your pension after you start taking taxable money from it, the total amount you can contribute and receive tax relief on will be reduced to £10,000 a year under the money purchase annual allowance (MPAA). Learn more abut the MPAA.
What happens once I've applied
Once we've received your withdrawal request:
- We usually pay the amount within four working days if you've sufficient cash. If there's a shortfall, we'll use the cash available and cover the rest proportionately from your investments. In this case the payment may take up to 12 working days.
- If you've added a new bank account that we're unable to verify, it may delay the payment process.
Annuities - another way to take money from your pension
Some people prefer to know that they'll have an income to cover the whole of their retirement. If this sounds like you, an annuity might work in your favour. Most annuities provide you with a lifelong, regular income that is guaranteed to last as long as you live. A quarter (25%) of your pension pot can usually be taken tax-free before you buy the annuity and any other payments will be taxed as earnings.
Helping you plan for your retirement
Learn more about pension drawdown
If you’re new to the term drawdown, need a refresher or are approaching retirement, we'll help you weigh up your options and see if drawdown is right for you.
Retirement planning calculators
Our calculators can help you to look more closely at various aspects of your retirement, from planning your goals and your savings to working out your withdrawals.
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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
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