You can start taking money from your personal pension from age 55 (rising to 57 from 6 April 2028). This is different from the state pension, which most people normally receive from age 66 (gradually rising to 68 depending on your date of birth).
Ways to take money from your Santander Personal Pension
Retirement options explained
Make sure you understand the retirement options available to you from Santander and other providers
Reminder: Payment of tax-free cash can’t be cancelled and the money paid can’t be returned to us. The amount paid tax-free from all pensions in your lifetime is subject to a maximum allowance. If you exceed this limit, you’ll pay a tax charge.
Things to think about before making your decision
1. Making your income last
It’s very important to think about how much you’ll need to live on and how you’ll manage it to make sure it won’t run out.
2. Understand the tax
When you start taking your pension savings, normally up to 25% of the amount you take is paid tax-free.
After that, anything you take will be taxed as income. If you’re still working or have other income, it could mean you pay more tax.
3. Make your decision
We’ll give you information before you make your final choice. It’s important you read and understand all your retirement options.
Frequently asked questions about pension withdrawals
Investment Pathways are designed to help you choose how to invest your pension if you haven’t taken financial advice – aiming to make your choices clearer for you. You can choose 1 of the 4 pathways available. Each pathway links to a single investment fund matched to your retirement plans over the next 5 years. Your money then stays invested in a way that aims to suit your retirement goals.
If you haven’t moved any money in your Santander Personal Pension to a drawdown fund and there’s less than £10,000 in your pension savings, you can choose to take a small pot pension lump sum. This usually won’t trigger the Money Purchase Annual Allowance (MPAA). This is a yearly limit on how much can be paid into pensions and still be eligible for tax relief.
If there’s £10,000 or more in your pension savings, you can choose to take an uncrystallised fund pension lump sum. This will trigger the MPAA.
In both cases, you’ll normally get 25% tax-free and the rest taxed as income.
If you’ve already moved money to a drawdown fund and want to take what’s in it as a lump sum, you can. But you won’t get any more tax-free cash. The full amount will be taxed. This will trigger the MPAA, if it doesn’t already apply to you.
If you’re still working or have any other form of income, taking your pension income or a lump sum now could put you into a higher tax bracket or leave you with more tax to pay to HM Revenue & Customs (HMRC). If you’re unsure, we recommend speaking to a financial adviser or pension tax specialist to help you make any decisions.
If you get means-tested benefits, taking money from your pension savings could affect your eligibility to claim or stop you from receiving benefits.
Payment of tax-free cash can’t be cancelled and the money paid can’t be returned to us.
The amount paid tax-free from all pensions in your lifetime is subject to a maximum allowance. These limits are known as the Lump Sum Allowance (LSA) and the Lump Sum and Death Benefit Allowance (LSDBA). If you exceed them, you’ll pay a tax charge.
When you set up a Personal Pension Account, you’ll be asked to nominate a beneficiary. This is the person you’d like to receive the remaining funds if you die.
- If you die before taking any benefits, the full value of your pension pot is normally paid as a lump sum to your nominated beneficiary.
- If you die after benefits have started to be paid to you, what your beneficiary receives will depend on how you chose to take your pension income. The tax treatment of any payments will depend on your age at the date of death, or when we receive notification of your death.
If you’re under the age of 75 when you die and your death benefits are paid within two years from being notified of your death, any lump sum, income drawdown and annuity are normally paid free of income and capital gains tax.
From 6 April 2027, most unused pension funds and pension death benefits will be included in the value of a deceased person’s estate for inheritance tax purposes. If your estate is more than the maximum threshold, a tax charge will be due to HMRC.