6_A_Flexible_Income
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You might like the idea of a flexible income after you retire. Then you can choose how much you want
to take and when.
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A flexible income works by giving you the choice of taking up to 1/4 of your pension pot tax free, with
the rest providing a flexible income.
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What's left in your pension pot is reinvested, giving your money a chance to grow.
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Remember, the value of your pension pot could go down too, and the value of your pot will reduce
with each cash withdrawal, so you could run out of money.
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This option won't guarantee an income for life, for you, or for any dependence you have after you die.
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Don't rush into things. Explore each option carefully.
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We strongly recommend you get in touch with Pension Wise. Pension Wise as a government service
from Money Helper that offers free, impartial guidance. They'll talk you through your options and help
you make the right choices.
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You should also consider seeking independent financial advice for your personal situation.
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You can get a flexible retirement income from most providers and it's important to shop around to
find the right product and best deal for you.
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Cheque with your current provider to make sure that if you choose a flexible income, you don't miss
out on any valuable benefits your pension plan may have.
id
You can leave your pension pot invested and take an income from it or amounts as and when you need them. A quarter of your pension pot can usually be taken tax-free and any other withdrawals will be taxed when you take them as income or as lump sums. You can usually access your pension savings from age 55 (rising to 57 from April 2028).
This option gives you flexibility to use your pension savings as and when you need. You can choose other retirement income products, such as a guaranteed income, in the future.
You can choose how your money is invested. Most providers offer something called Investment Pathway Funds. It’s a ready-made investment option that simplifies your decision of how to invest your remaining pension pot after you’ve taken your tax-free lump sum.
You can choose from one of four investment options that best match your retirement goals:
You don't want to touch your savings for at least 5 years
You want to set up a guaranteed annuity in the next 5 years
You want to start taking a long-term income in the next 5 years
You plan to take all your money in the next 5 years
Income from these funds isn't guaranteed for life, but they do give you the flexibility to change the income you take, or to switch to other retirement products later on.
How do I set up a flexible income?
Some pension plans directly offer this option, but you may need to transfer to a new pension plan if your current plan doesn't offer this. You can choose any pension provider and we recommend you shop around for the right one for you. Our Guide to pension help and advice has more information on the help available to you.
Many Phoenix Life plans don’t directly offer flexible access and you may want to consider transferring to an Active Money Personal Pension with Standard Life. Like Phoenix Life, they're part of Phoenix Group, and have years of experience helping customers with their life savings.
What are the benefits of transferring to the Standard Life Active Money Personal Pension?
Flexible access to your pension savings as and when you need
Manage your pension plan anytime, anywhere with the online app
One of the highest rated personal pensions on the market
Before you decide, here are some things to consider
Your pension stays invested so has the potential to grow but may go down in value also.
You could run out of money if you take too much out or if your pension investments perform badly.
You can take this option, but still decide to buy a guaranteed income for life (annuity) at a later stage if you feel that’s right for you.
If you access your pension flexibly, (apart from solely taking tax-free cash), you can still make contributions but a lower allowance called the Money Purchase Annual Allowance (MPAA) of £10,000 will apply. This limit does not apply to any benefits you build up in defined benefit (often called final salary) pensions. If you are 75 or older your contributions will not qualify for tax relief.
Your income will only last until all the money has been taken out.
If you access your pension benefits before your retirement date or transfer to a new plan, there may be an early exit reduction fee or a market value reduction on your policy, so your pension savings may reduce.
Make sure that taking a flexible income option doesn’t mean missing out on special features on your pension plan like guaranteed annuity rates (GAR). Check what features your pension has before making a decision.
Just like any other major purchase, it pays to shop around when you’re choosing a flexible income product.
Always remember that you don’t have to accept what your current provider offers – others might be able to give you a better deal.
We’d recommend taking independent financial advice before making your decision, and you can find out how to access it in our guide to pension advice .
We also recommend you get free impartial guidance from Pension Wise, a Government service from MoneyHelper about this and other options. There’s great information about shopping around on Pension Wise and a useful guide to flexible retirement income.
Remember, if your policy has a safeguarded benefit, and you’re planning to transfer more than £30,000, you’re required to take advice by law.
Stay alert to pension scams - you might receive a cold call, voice, text or email message offering a free pension review or time limited offers. Some might even appear to be legal or from the Government. There's more information on our pension scams page, or from the Pensions Regulator.
Check the details of your policy
You can find all the information you need about your current Phoenix pension in your retirement pack.
Contact us to learn more about flexible access with Standard Life's Active Money Personal Pension
Phoenix Life is part of the Phoenix Group. Phoenix Life Limited, trading as Standard Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
It’s important to remember that we can’t process any requests to access pension savings until we’ve sent you a retirement pack. If you don't have one yet, you can request one here
