Claiming Your Private Pension

A private pension scheme is set up by your employer through an insurance company. If you want advice on claiming your State Pension, visit our State Pension page >

Make sure you check what age has been set by your pension provider for when you can start taking money from your pension pot. This is usually not before the age of 55. Contact your pension provider if you’re not sure.

You can take up to 25% of the money built up in your pension as a tax-free lump sum.

You’ll then have six months to start taking the remaining 75%.

The options you have for taking the rest of your pension pot include:

• Withdrawing the whole sum or part of it as cash
• Buying a product that gives you a guaranteed income (sometimes known as an ‘annuity’) for life – see below for more details
• Investing it to get a regular, adjustable income (sometimes known as ‘flexi-access drawdown’)

Ask your pension provider which options they offer as all providers are different and don’t guarantee all the above options. If you do not want to take any of their options, you can transfer your pension pot to a different provider. You can find guidance on transferring your pension on the GOV.UK pensions webpage >

Withdrawing cash from your pension pot

You might be able to take cash directly from your pension pot, either as a lump sum of the whole total or smaller cash sums.

There might be rules on when you cannot withdraw cash like the following:

• You’ve already saved the lifetime allowance in your pension scheme
• You have some type of lifetime allowance protection
• You’re under 75, and the sums you want to withdraw are bigger than the amount of lifetime allowance you have left.

Charges and taxes

Before making any withdrawals, it’s always advisable to check whether you may be charged per withdrawal with your pension provider.

It’s important to remember that your pension provider will also deduct any tax you owe before you receive money from your pension pot, and you might have to pay a higher rate of tax if you take large amounts from your pension pot. You could also owe extra tax at the end of the tax year.

Find a past private pension pot

Use the GOV.UK service to find contact details for a lost pension. You can find contact details for:

• your own workplace or personal pension scheme
• someone else’s scheme if you have their permission

Note, this service does not tell you whether you have a pension, or what its value is. Before you start, you need the name of an employer or a pension provider to use this service.

If you are currently, or have been self employed

MoneyHelper have a Self-employed Pension Review service which can help you with your pension. It covers four areas: work, health, family, and money. In these topics we’ll help you think about how they affect your pension, and what your best course of action might be. 

The Self-employed Pension Review is a free appointment where you are given impartial and independent advice which can make pensions much easier to manage. 

You can book a free, full telephone appointment with one of our specialists by emailing virtual.appointments@moneyhelper.org.uk

Annuity

An annuity gives you regular payments for life from your pension provider, no matter how long you live. You can ask your pension provider to pay for this out of your pension pot so you'll know exactly how much you're getting each month, come rain or shine.

The amount you receive can vary and there are different kinds of annuities. Some are for a fixed time (for example, payments for 10 years instead of your lifetime) and some continue paying your spouse or partner after you die.

You do not have to buy your annuity from your pension provider. Find out more from MoneyHelper >

Invest the money in a drawdown fund

You may be able to ask your pension provider to invest your pension pot in a flexi-access drawdown fund.

From a flexi-access drawdown fund you can:

• Make withdrawals
• Buy a short-term annuity - this will give you regular payments for up to five years
• Pay in - but you’ll pay tax on contributions over a set amount each year.

To find out more about drawdown funds, visit Citizens Advice >

Extra support to help you

• Citizens Advice Debt and Money department (England) provide a wealth of information and advice about money and pensions
  Citizens Advice Debt and Money department (Wales)
  Citizens Advice Debt and Money department (Scotland)
  
• MoneyHelper have a Pension Wise scheme that offer impartial pensions guidance through a free specialist pension appointment. Either book online or call 0800 138 3944 (Monday to Friday, 9am - 5pm excluding bank holidays).

Page last updated: January 2023.