How to withdraw money from a pension fund

Accessing pension funds

If you qualify for the State Pension and have also paid into a workplace pension over the course of your career, you’ll be able to access each fund at a different age.

When can I withdraw my State Pension?

The State Pension age is fixed by the government and you can’t withdraw a weekly pension until you reach it. The State Pension age is currently ^{_state_pension_age} for men and women, and looks set to increase to ^{_pension_age_from_2028} by 2028. You can’t cash in the State Pension as a lump sum.

When can I withdraw my workplace or personal pension?

It’s possible to access a workplace or personal pension much earlier. Once you reach your 55th birthday you can withdraw all of your pension fund.

You can take up to ^{_corporation_tax} as a lump sum without paying tax, and will be charged at your usual rate for any subsequent withdrawals. You can use all of the money to buy an annuity, which will usually pay out a guaranteed income for the rest of your life.

Can I withdraw all my pension at 55?

It#s usually possible to withdraw all your pension when you turn 55 (57 from 2028), but there are downsides to consider:

• you’ll lose out on future pension growth potential;
• you’ll have to pay income tax on 75% of your pension income, which could be significantly higher than if you took it out in smaller amounts over several years; and
• once your pension is converted to cash, it will start losing value against the rate of inflation.

How drawdown works

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Drawdown is the most flexible way of taking money out of your pension and is the main alternative to buying an annuity. You have the freedom to move your money into different funds and can withdraw as much or as little as you like, at any time.

When you reinvest your pension - which typically goes into a combination of shares, cash and bonds - the amount you receive can vary depending on the fund’s performance.

While taking your pension cash out is relatively straightforward with drawdown, there’s no guarantee that your money will last forever. Funds are vulnerable to market performance so the size of your pot can go down as well as up, and you may get back less than you started with.

If you opt for drawdown and change your mind, it’s possible to use your pension fund to buy an annuity at a later date. But if you purchase an annuity, there’s no going back.

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How to withdraw money from pension funds

Before drawing money from your pension funds, you’ll want to consider the benefits and disadvantages, to ensure you have a comprehensive plan in place.

Drawdown is simple with PensionBee as:

• our service helps you combine all of your old pensions into one easy to manage online plan;
• funds are managed by the biggest global investment firms such as BlackRock, State Street and HSBC; and
• you’ll be able to track how your funds are performing through our online dashboard, and once you reach 55 you can access your money.

With PensionBee, you’ll be able to track how your funds are performing through our online dashboard. Once you reach your pension age (currently 55, rising to 57 in 2028) you can make a withdrawal. You’ll need to verify your identity using our Facial Similarity Check (FSC) process. If all your bank details and identity are successfully verified, it usually takes around 10 working days for you to receive your money. Taxable withdrawals can only be made once a month. This means you’ll need to plan your withdrawals carefully to stay within this limit.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Last edited: 06-04-2025