According to HMRC, the options you have for your pension pot(s) are:
Leave Your Whole Pot Untouched
You don’t have to start taking money from your pension pot when you reach your ‘selected retirement age’. You can leave your money invested in your pot until you need it.
Guaranteed Income (Taking An Annuity)
You can use your pot to buy an insurance policy that guarantees you an income for the rest of your life – no matter how long you live.
Your pot is invested to give you a regular income. You decide how much to take out and when, and how long you want it to last.
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Take Cash In Chunks
You can take smaller sums of money from your pot until you run out. Your 25% tax-free amount isn’t paid in one lump sum – you get it over time.
Take Your Whole Pot In One Go
You can cash in your entire pot – 25% is tax free, the rest is taxable.
Mix Your Options
You can mix different options. Usually, you would need a bigger pot to do this.
Which is the best option?
You should take advice on the tax implications (we can help with this) and other pension investment considerations (with your financial advisor) before settling on a course of action.
It may have taken many years to accumulate your pension savings and you may only get one chance to choose from the above. Discussing matters with your advisors and your family is recommended before settling on a particular strategy.