Your options for taking your money
Choosing to take your money from your retirement savings account is one of life’s big decisions. You’ve worked hard and paid in money over the years. You’ll want to be sure you’re making the right choice so that your future is secure.
You can access your retirement savings at your target retirement age, or any time after age 55*, whether or not you’ve stopped working. You may be able to access them earlier than this if your original scheme had a protected retirement age or if you’re in ill health. If you get close to your chosen retirement age and decide you don’t want to take your money yet, you can also delay taking money from your retirment savings.
*The earliest age from which you can take your savings will change from age 55 to age 57 in 2028 (please note if joined the Tesco Retirement Savings Plan before 4 November 2021 you retain the option to retire from age 55).
Your options
You can usually take up to 25% of your retirement savings account as a tax-free cash lump sum (subject to allowances) and use the rest to buy a guaranteed regular income for a fixed period or for the rest of your life. This is known as an annuity.
Annuities have a number of features. For instance you can arrange for payments to continue to your dependants after your death.
Things to consider
- You can usually take up to 25% of your retirement savings account as tax-free cash. Each annuity payment will be taxed as income.
- Smokers and those in poor health usually get better rates because of their shorter life expectancy.
You can usually take up to 25% of your retirement savings account as a tax-free cash lump sum (subject to allowances) and leave the rest invested to provide a regular income, and occasional lump sums if required (which will be taxed as income). This is known as ‘flexible retirement income’ or ‘flexi-access drawdown’.
Things to consider
- You can usually take up to 25% of your retirement savings account as tax-free cash but the rest will be taxed as income.
- You can vary, stop or suspend the amount you’re taking at any time.
- You may be charged for varying the amount.
You can access all your retirement savings account in a single cash lump sum amount.
You can do this via Manage Your Account or by calling us on 0345 070 0090Opens in new tab, as long as:
You can take your retirement savings account in cash as a single lump sum.
- you’re over 55
- your retirement account is under £10,000
- you’ve requested your retirement pack
Things to consider
- Up to 25% of the amount you access will usually be tax-free (subject to allowances). The rest is treated as taxable income, along with any other income you receive
- If you’re not sure how much tax you’ll pay when you access the money from your retirement account, try our pension tax calculator. It will also give you an idea of what could change if you spread that income over the next few tax years
- It’s a good idea to think about where you’re going to keep the money once you have accessed it, if you don’t need it straight away
- You don’t need to stop working to access all of your retirement savings, but you should think about where your retirement income will come from when you do decide to stop working
Read our example case studyOpens in new tab and watch our video below
Video transcriptOpens in new tab (PDF 87KB)
You can access your retirement savings in a series of cash lump sums leaving the rest of the money invested. This gives it the chance to grow, but it could also go down in value.
You can do this via Manage Your AccountOpens in new tab or by calling us on 0345 070 0090Opens in new tab, as long as:
- you’re over 55
- your retirement account is under £10,000
- you’ve requested your retirement pack
Things to consider
- Up to 25% of the amount you access will usually be tax-free (subject to allowances). The rest is treated as taxable income, along with any other income you receive.
- If you’re not sure how much tax you’ll pay when you access the money from your retirement account, try our pension tax calculator. It will also give you an idea of what could change if you spread that income over the next few tax years
- It’s a good idea to think about where you’re going to keep the money once you have accessed it, if you don’t need it straight away
- You don’t need to stop working to access your retirement savings, but you should think about where your retirement income will come from when you do decide to stop working
Read our example case studyOpens in new tab and watch our video below
You can leave your retirement savings account where it is. We’ll continue to manage your retirement savings in the same way we have been, unless instructed otherwise.
Things to consider
- Your money has the chance to grow but it could go down in value too.
- We’ll automatically extend your retirement age by five years. You can still access your retirement savings in this period
- You should review your retirement plans regularly to make sure you’re investing your pot in the most suitable way
You can choose more than one option
You don’t just have to choose one option or provider. You can mix your options for each retirement savings account you have. You can transfer all or some of your savings to another provider and have your benefits paid by them. However, you may lose your entitlement to any benefits that were protected, such as the ability to combine your defined benefit and defined contributions accounts, the ability to access your pot before age 55* or a tax-free cash sum greater than 25% of your pot. Please check this before transferring.
The law, tax rates and any allowances may change in the future. These changes could affect the value of your savings, how much you can pay in, or the age at which you’re able to access your money.
How tax works for you will depend on your individual circumstances.
*The earliest age from which you can take your savings will change from age 55 to age 57 in 2028 (please note if joined the Tesco Retirement Savings Plan before 4 November 2021 you retain the option to retire from age 55).
Retirement Line Service
If you’re interested in receiving a regular pension income (annuity), for life or for a fixed number of years, you should shop around for the best deal. Tesco has selected Retirement Line, the UK’s largest pension income broker, to help you with this. Retirement Line believes everyone should know how much guaranteed pension income they could receive, before deciding what to do with their savings at retirement.
Go to retirementline.co.uk/tescoOpens in new tab or call 0345 565 2601Opens in new tab to find out more and look for the best option to suit your personal circumstances. Retirement Line will search for the best annuity deals for you. It costs nothing to use the service to see what pension income you could receive. Please note that Tesco is not responsible for any information provided to you by Retirement Line. Other pension income brokers are also available.
For more information refer to the Useful links page.
Pension Wise
Pension Wise is a free and impartial service set up by the government to help you make a decision about how to take your savings at retirement. We recommend you visit moneyhelper.org.uk/pensionwiseOpens in new tab for more information.
State Benefit Eligibility
Taking money from your pension could impact any means-tested government benefits you’re getting. Use the Turn2Us benefits calculatorOpens in new tab to find out what you may be entitled to.
Ready to make a choice
Once you’re ready to take your money and you’ve decided which option (or options) you want to take, you can get in touch for all the information you need and any relevant forms. Please call the Tesco Retirement Savings Plan Helpline on 0345 070 4058Opens in new tabOpens in new tab and press ‘2’ to discuss your retirement options and request any more information you need before you make your decision.
We’re here to help if you have any final questions or you need any more information before you make your decision, just let us know.
We’ll write to you every five years from age 50 with a summary of your retirement savings account including its current value plus a series of risk warnings and things to think about before taking your money out.
The communications will continue until you reach age 95 or until you start taking your benefits, whichever happens first.
