Employee on laptop

Retirement Options

On this page, you can read about what happens when you retire including when you can access your funds, the options available to you and which steps to take if/when you want to draw your pension.

When can I access my pension funds?

The earliest age from which you can access your pension fund is 55. The only exception to this rule is if you suffer from serious ill health.

You don't have to stop working to draw your pension. If you are 55 years of age, you can access your pension funds at any time.

Equally, you do not have to draw your pension when you turn 55. You can carry on contributing for as long as you are an active member of the scheme. In fact, this might be a good time to consider increasing your contributions to ensure you pension savings meet your retirement needs.

The scheme's default retirement age is 65, although this will be adjusted in line with your state pension age if later.

How much is my pension likely to be worth?

pension value

Each year you will receive an annual statement from us which will show the current value of your funds as well as a personal pension projection based on your current age, your historic contribution level and your selected retirement age.

There are also many online pension calculators available which can give you an indication of how you can tailor your savings to boost your future retirement income. Click here to access the Smart Pension calculator. The Money Advice Service also has a very detailed pension calculator available on their website. The calculator allows you to set your target retirement income and compare this to your current contribution level to check whether you are on track to achieving your desired retirement income. Click here to try it out!

Please note we do not supply on-demand pension fund valuations or pension projections.

I may not live in the UK when I retire – can I still access my funds abroad?

It is possible to transfer UK pension funds to certain overseas schemes.

These are known as 'Recognised Overseas Pension Scheme' – ROPS. You can access a list of these schemes by clicking here. Please note that this list is updated twice a month, so please ensure you check the latest list before you initiate a transfer to any overseas scheme.

The other option would be to have your pension paid into a UK bank account if you still have access to one.

What are my options?

What are my options?
  • a) Do nothing – Carry on contributing

    If you are still employed, you can simply carry on contributing into the scheme as you have been doing. If you are close to (or over) the age of 65, please let us know your preferred retirement age by email so that we can update our system accordingly. This will ensure your annual statement shows the correct pension projection for you.

  • b) Do nothing – Remain as a deferred member of the scheme

    If you have stopped working, but don't feel ready to draw your funds, you can remain as a deferred member of the scheme. This means you will no longer be contributing, but your funds will remain invested in line with your instructions. For reference, our default lifestyle strategies are designed to reduce the risk profile of your investment the closer you get to your selected retirement age.

  • c) Pay more into your pension

    Many studies have concluded that the vast majority of people in the UK are not saving enough for their retirement. If you're still working, you can choose to either make additional payments as and when you can afford to or you can increase your regular contributions. If you would like to pay more into your pension, please click here for full instructions.

  • e) Draw your funds - Small Fund Commutation

    If your pension pot is worth £10,000 or less, you might be able to draw the whole lot as a cash lump sum. 25% of this would be tax-free – the rest would be taxable. The Small Fund Commutation rules allow you to access up to 3 pension pots in this way (with an overall maximum fund value of £30,000). Please note that if you use this option, the maximum you can pay into any defined contribution pension schemes in the future would be reduced to £4,000 per year.

    The taxable 75% is treated as earned income and therefore would need to be included on your tax return or reported to the tax office. Taking your funds in this way could move you into a higher-rate tax bracket and/or affect your right to any means-tested benefits.

    If you would like to proceed with a Small Fund Commutation application, please click here to download and print off the required form.

    Please note you cannot use this option if your pension pot is worth over £10,000.

  • f) Transfer your funds - Purchase an annuity

    This is probably the most traditional way to create a retirement income. There are many different types of annuities on the market. Some will pay out for a fixed number of years, some will carry on paying for the entire duration of your lifetime. Some annuities increase payments to keep up with inflation, others remain fixed and the pay-outs stay the same. It is possible to mix and match products to get one that is right for you.

    Smart Pension does not currently offer annuities and a transfer to a provider of your choice would be necessary. It is vital that you shop around for the best deal and we strongly recommend you seek regulated financial advice before making a final decision. You cannot normally change your mind once you have bought an annuity.

    Please click here to download and print off a transfer-out form.

  • g) Transfer your funds – Drawdown

    This is a flexible option that allows you to access your pension funds as and when you need to. You can draw from your funds as and when you need to. 25% can be accessed tax-free – 75% would be taxable each time. Alternatively, you could take 25% tax-free and then re-invest the remaining 75%, for example in an annuity. You can even draw the whole amount – even if the pot is worth more than £10,000.

    This option means you need to manage your investment more carefully and unlike, for example, a lifetime annuity (as described above) your income is not guaranteed for life and could run out!

    Smart Pension does not currently offer any drawdown products and a transfer to a provider of your choice would be necessary. It is important that you shop around for the best deal and we strongly recommend you seek regulated financial advice before making a final decision.

    Please click here to download and print off a transfer-out form.

Will drawing my Smart Pension affect my State Pension?

No, drawing your Smart Pension will neither affect when you can draw your state pension nor how much you are entitled to.

There may be tax implications if you go over your personal allowance though – for more information, please visit: https://www.gov.uk/tax-on-pension

Important things to consider before you decide

older people living longer

The most importing thing to remember is that you cannot usually change your mind once you have made a decision, so you need to make sure you get it right the first-time round.

To help ensure this happens there are numerous websites, which offer free and impartial advice and we strongly recommend you take advantage of these to help you understand your options and make the right decision. We particularly suggest you visit the following websites:

It may also be worth speaking to an independent, regulated financial adviser before deciding what to do. You can search the Financial Conduct Authority's register here.

We are all living longer! On average, someone aged 55 today will live to their mid/late 80s. Around 10% of men and 20% of women will live to receive a telegram from the Queen!! You should plan for your pension to last as long you do. Contributing for longer and delaying when you start drawing your pension may go some way to help with this. You can read more here.

The introduction of greater pension freedoms has also seen an increase in sophisticated pension scams. Be very cautious of anyone contacting you to offer an investment “opportunity” that sounds too good to be true (it probably is…), or a 'deal' presented as a special offer for a 'limited time only' (to put pressure on you to make a quick decision) or to offer you access to your pension before the age of 55 (this is not possible unless you are seriously ill). To read more about these scams and to avoid becoming a victim of these scammers, it's well worth taking a look at the following articles:

Do you allow partial transfers out?

In most circumstances, we would not accept a partial transfer out, although there may be exceptional circumstances, where the fund value is large enough, to permit a partial withdrawal. This will be decided on a case-by-case basis, so please contact us if this is your preferred option.

What happens if I die before drawing my pension?

If you should pass away before drawing your pension, the full value of your pot will be passed on to your beneficiary/beneficiaries. Please ensure you complete an Expression of Wish form to let us know who you would like to receive your funds. Please click here to read where to find the Expression of Wish form and how to complete it.

Additional information

financial adviser

Please note that the value of any investment may go down as well as up. The future value of your pension funds may be more or less than you originally paid into it.

Please remember to tell us if you change your email or postal address.

We will write to you approximately 6 months before your 55th, 65th and 75th birthdays to remind you of your retirement choices. We will also write to you around 6 weeks before your 65th birthday, as this is the scheme's default select retirement age (or your state pension age if this is later). Additionally, the annual statements explain the options that are available to members who are over the age of 55.

For members who suffer terminal ill health, access to pension funds can sometimes be granted prior to the age of 55. This is designed to ease the financial burden during the last 12 months of a member's life and any application would have to be supported by medical evidence.

If you have suffered from a major medical condition in the past (i.e. heart attack, stroke, cancer, etc) or you take regular medication due to ill health, you may be able to obtain an enhanced annuity. If in doubt, you should seek professional advice from a regulated adviser.

For more information, please visit our Risk Warnings page.

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