“Pension freedoms” relates to an act introduced in the UK by the Conservative government in 2015. In a nutshell it allows individuals with a private pension to access their pension savings pot at the age of 55. Along with benefits such as a new system concerning pension beneficiaries, the Pension Freedoms Act has given individuals a great deal more flexibility as to how they can use their pension savings.

As most people are aware, the world of pensions can be a mystifying and complex place to be at times, so we can’t cover all your options in this article. We can however cover the main tenets of what you are able to do and some of the pitfalls. This article is therefore meant as a taster. If you want to look further into accessing your pension savings it is essential you do so with the support of a regulated pension advisor who will be able to balance your present needs and aspirations for the future against the options your pension scheme offers you.

So first of all, lets look at the options open to you if you want to access your pension.

Accessing your pension

There are generally four main ways in which you can access your pension:

  • Take out savings in the form of one lump sum. That extra bit of cash may be needed for a debt, to fund a change in your lifestyle (i.e. paying for a conservatory on your house) or giving yourself a treat – a nice holiday etc. There are no boundaries as to how you use your money but it is important that you take guidance from the regulated financial advisor (RFA) as they will give you an idea as to how it will impact on monies available for your retirement. Any money left in your pension pot after it has been accessed, continues to be invested.
  • Take out more than one lump sum. You can take monies out of your pension fund as many times as you like but bear in mind that only the first 25% you take will be tax free. After that any monies will be taxed relative to your income tax status. It is important to monitor how much money is being released. A large amount of money going into your everyday savings account may push you into a higher tax income bracket. Again, listen to the advice of your RFA.
  • Take the money as an income. This is called “drawdown” and it can be a great way to supplement your income as you approach retirement.  You can set it up so that you chose the intervals when the money goes into your account and how much will be taken.
  • Mix and match. It maybe that you need a lump sum and a regular income. Well, you can do this as well, but as above, be sure that any large amounts going into your savings account will not affect your status with the tax office.

Can I access money from any pension at 55?

It depends. You cannot access money from your State Pension or unfunded pensions. You can access personal and private pensions, work pensions and final salary pensions.
However, the scheme you are with may not allow you access. In these circumstances you can explore the benefits of transferring your fund to one which will. Again, unless you have a thorough knowledge of pensions you should always seek the advice of an independent financial adviser RFA.

And it’s important to point out that taking pension money early is not right for everyone because it could leave you worse off in retirement. And for all regulated financial advisers, the starting point if someone wants to take money early from a final salary scheme is not to do it. This is because final salary pensions promise to pay a guaranteed income for life, which is an extremely valuable benefit.


The boundaries, options and procedures were made clearer in the act around who you can leave your pension fund to in the event that you die before accessing it in its entirety. The good news is there are no restrictions as to who you can leave your fund to. The monies will only be taxed if you die after the age of 75.


The pension freedoms allow much more flexibility with money you have saved for your retirement and can be invaluable financial support after 55 – but take into account that any money taken from your pot will have an impact on your pension income.

When looking at options for your pension, consider using a regulated financial adviser like Portafina or, view the info at Pension Wise.


Please enter your comment!
Please enter your name here