Income Options

Using your savings in retirement is not one size fits all, and we believe you should be able to tailor your choices to suit your income needs. 

Below you can learn about your income options, updating your choices (life can change, so your choices can too), and the role tax plays with your income.

First, watch our short video, explaining income options.

When the time comes to take an income from your retirement savings, you have a range of choices. It’s important to understand these choices and the risks of each. Things to consider include:

  • how much you may be taxed
  • any outstanding debts
  • illness; or
  • big life events

With the Trust you have the freedom to mix income choices to best suit your lifestyle needs, including:

  • Leave your pot alone
  • Get a guaranteed income (annuity)
  • Have flexible access
  • Take the cash in multiple lumps
  • Take the whole pot

Click here for information about these different options. 

Look at:

  • Read our handy resource on our ‘7 strategies to taking an income’, click here, this includes the difference between flexible, secure and cash lump sum incomes
  • Our retirement planner and tax planning tools to work out how much you might receive, for how long and how much you may be taxed 

Once you have made a decision, all you have to do is sign into your online account to tell us your choices.  Alternatively, you can contact us here.

Understanding how much you might be taxed is very important! How you choose to take your money has tax consequences.   

For example, you could take all of your savings as a cash lump sum. Typically, a quarter of the payment will be tax-free, with the balance subject to income tax.  

This option may seem attractive but it must be considered carefully. The tax implications of withdrawing cash can be significant. Depending on how much you take from your savings, and other income you might also be receiving at the time, you could end up paying significantly more income tax. Visit the government website here, to check which band of tax applies to you. 

How much taxable income you take out in any tax year will affect how much tax you have to pay.  You can manage your tax by making the most of the flexibility around what you take out and when, so it is worth bearing in mind how tax impacts you, with an Independent Financial Advisor. You can also use our Tax planning tool to get an idea of your potential tax liability.

If you would like free tax advice then you can contact the charity Tax Help For Older People on 0333 207 5651 or by visiting www.taxvol.org.uk. Alternatively you can contact HM Revenue & Customs on 0300 200 3300 or by visiting www.hmrc.gov.uk

Taking large payments from your retirement savings can affect your entitlement to means tested State Benefits.  For example, no one with more than £16,000 in capital will be entitled to Housing Benefit and Council Tax Support.

Therefore, if you may be entitled to State Benefits you need to take care with how much money you take from your savings and holding as capital.

In addition to income from your savings in the Trust, you may be entitled to a State Pension. 

If you are unsure if you are eligible for the State Pension or how much and when you receive this money, make sure you visit the Government State Pension website.

If you would like a retirement pack, visit our contact page, write your request (make sure you include your security information) and the administration team will send you a pack.

 PLEASE NOTE: We cannot provide advice. If you need advice, please seek an independent financial adviser.