Your options when you retire

When you set up a Retirement Account you’ll be asked to choose how you’d like to take your pension benefits, this is so the GIS can invest it as required as you near retirement. It means you can leave the investing up to Scottish Widows.

If you’re not sure of your risk appetite or how to take your pension at retirement, you can choose the default option. This is a balanced Governed Investment Strategy (GIS) that targets flexible access at retirement. This could suit a typical customer and reflects what we most commonly see in terms of risk appetite and retirement options. The default strategy is not personalised to you, and it may not meet your needs at retirement, so please consider this when making a decision about your investment options.

If you’re unsure what to choose, you can always seek financial advice. There will be a charge for this service.

However, if your plans change, you can amend how you want to take your benefits at any time. 

The current minimum retirement age is 55 (57 from April 2028) and you can start accessing your benefits after that. But that doesn’t mean it’s right for you and so you should consider all your options before making a decision. For example, you might just you want to reduce your working hours and access only some of your benefits rather than stopping working altogether. 

Get a guaranteed income for life

This type of income is called an annuity. You can take up to 25% of your pension pot as a tax-free cash lump sum then use the rest to get a regular and secure taxable income for life.

There are different types of annuity which vary how much income you would get. For example you could choose to buy an increasing income and/or choose to provide a continuing income for a loved one after you die. 


Access it flexibly

Known as Flexible Access Drawdown, you can take up to 25% of your pension pot as a tax-free cash lump sum, and leave the rest invested, you can then take taxable withdrawals as and when you like. 

The level of income you take and any investment growth will be key factors as to how long your pension pot will last and you may run out of money in retirement without careful planning. 

Take some or all of your pension as cash

Known as encashment, you either take part of your pension or close your pension and take the whole amount as cash in one go. Up to the first 25% of each amount you take is tax-free and the rest is taxed at your highest tax rate by adding it to the rest of your income for that year. Please bear in mind this could take you into a higher tax bracket. 

However, be aware that without very careful planning you could run out of money in your retirement.

You need to consider that your circumstances can change and you may decide to defer your retirement, take it early or change how you want to access your benefits. Individual tax circumstances and tax rules can change.

Your questions answered


You may already have an idea of how you want to take your pension benefits. However, it’s important to go back and review your situation before deciding. Your decision should be based on a number of things including your age and health, if you plan to stop working altogether or just reduce your hours, if you’ve got financial dependents and whether you’re looking for a fixed or flexible income.

You ought to consider how much you might need to spend in retirement and also think about if you plan to use any savings or assets you have outside of the pension. For example you might be considering downsizing your home. 

To help you understand what income you will have in retirement it’s worth seeing what you might receive as part of the Basic State Pension. Do remember you won’t be able to take your State Pension until you’re in your mid to late 60’s.  

Check your state pension here

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How to apply

Ready to transfer your old pensions into one easy to manage account? 

You can open a Retirement Account with Scottish Widows in just a few steps. Before you start make sure you’ve reviewed:

Whether transferring is right for you

How your pension will be invested?

What are your retirement options?

Ready to transfer?

If you’ve already reviewed and decided transferring is right for you and read about your investment and retirement options you can start the application. You’ll need the following:

  • Your National Insurance number
  • Your existing pension providers name
  • The policy numbers of each pension you want to transfer
  • The Scheme name if it’s a workplace pension
  • A recent transfer value for each pension
  • You know how you want to invest and access your new pension
  • A minimum of £10,000 to transfer from either one or multiple pensions

You’ll need these to complete your application so come back when you’ve got them to hand.

Important legal information

Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS).