My Macmillan

Accessing your pension

There are different rules about accessing different types of pension.

You can only access your State Pension when you reach State Pension age.

If you have a workplace or personal pension, the rules about accessing it depend on whether it is:

Workplace pensions can be either of these types. Personal pensions are always defined contribution schemes.

Defined contribution schemes

There have been major changes to defined contribution schemes since 6 April 2015. 

These changes give people greater freedom over how they save, invest or spend their pension benefits.

Before that date, most people in this type of scheme used their pension savings to buy a pension annuity. This is a type of insurance product, which provides an income for life in return for giving up your pension fund. A tax free amount of 25% of the pension fund was available in the form of a lump sum.

This has changed in the following way:

Any combination of the options above is available.

If you have a life expectancy of less than 12 months, you may be able to retire on the grounds of serious ill health.

Defined benefit schemes

Defined benefit schemes are not affected by the April 2015 changes.

When you reach the scheme’s retirement age, you will get a regular pension income as promised by your employer. You can usually also take out a cash lump sum but this will reduce the pension income you get. The amount of pension income you lose is often high so this may not be a good idea.

You can find details about taking your benefits at the scheme’s retirement age in your scheme booklet. If you do not have a scheme booklet, you should ask your employer for a copy.

You may be able to retire before the age of 55 (or the age allowed under your scheme’s rules) if you have ill health.

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