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Explore how I can invest for retirement

Our Modular iPlan brings pensions, ISAs and other investments together in one place.

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See what I could get in retirement

Get a personalised illustration to see what you could get by investing with James Hay.

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How can I take money out of my pension

If you are 55 or over, you can start accessing your pensions now – and we’re here to help.

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Register for an online account

Set up your James Hay Online Account now – and get ready to invest.

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From age 55, you have lots of choices as to how you access your pension funds. We’re committed to helping you making the most of these freedoms. But it is also important that you make sure that any course of action is suitable and you fully understand the risks involved.


Please note: Flexibly accessing your pension – either through UFPLS or flexi-drawdown – will limit how much you can make in new contributions to any registered pension scheme to £4,000 a year.


Transferring pensions to us

First off, if you want your James Hay Modular iSIPP to include any pension funds you’ve built up with other providers, you or your financial adviser will need to request a pension transfer. You can transfer funds that are not yet in drawdown or those that are already in flexi-access or capped drawdown.

Not all pensions are suitable for transfer as it can result in losing valuable guarantees or benefits included in the original scheme so we strongly encourage you to seek regulated financial advice before making a transfer. See ‘Consolidating pensions with James Hay’ to learn more.

Ways to take your pension with James Hay

Once you have set up your Modular iSIPP, here ae the ways you can take money out of your pension fund from age 55, and the risks to consider.

Use flexi-access drawdown

Flexi-access drawdown A pension income drawdown arrangement where there are no limits on how much can be taken out of a pension fund or when. All income drawdown arrangements set up from 6 April 2015 onwards are offered on a flexi-access basis. Once a pension fund is moved into flexi-access drawdown, an investor can only make new pension contributions (including tax relief) of up to £4,000 a year. See also Capped drawdown. allows both lump sums and a regular income to be taken from your pension fund. Up to 25% of the fund value can be taken as a tax-free lump sum(s) (known as a pension commencement lump sum The tax-free lump sum available on both defined benefit and defined contribution pension schemes. Typically 25% of the pension fund (subject to a maximum of 25% of the lifetime allowance) can be taken as a tax-free sum. The rest of the pension fund must be used to provide an income – in the case of a defined contribution scheme this can be done by buying an annuity or using income drawdown. ) as and when you wish. The rest of the fund can be taken as income, which is taxable. You have total freedom as to what level of income to take. But it’s important to choose a level that’s sustainable.

Flexi-access drawdown at James Hay lets you to specify what level of income to take and how often (monthly, quarterly, half-yearly or annually). These preferences can be varied at any time online. You can also track online how much income you’ve taken and what your remaining fund is worth.

Your pension fund can remain fully invested to help generate income and growth in its value. You can use the full range of funds offered by James Hay Investment Centre as well as other investments of your choice. If you invest through a financial adviser, you can also access our Managed Portfolio Service for investment portfolio matched to your needs. A range of deposit accounts also allow you to keep money out of the market if you prefer.

Risks to consider

  • Taking too much money can deplete a pension fund and reduce its ability to generate a sustainable income throughout retirement
  • If the fund remains invested, its value can fluctuate and experience losses as well as gains.
  • The amount of money available for you to take is not guaranteed.
  • Determining an appropriate investment strategy to generate a sustainable income and maintain the value of the remaining fund can be complex and can require financial advice.

Use capped drawdown

If you moved into income drawdown before the pension freedoms were introduced on 6 April 2015, you may be in a capped drawdown A pension income drawdown arrangement where the value of withdrawals allowed per year is kept within strict limits set by the government. But, in return, the individual can still make pension contributions up to the annual allowance. Capped drawdown was withdrawn to new investors from 6 April 2015. All new income drawdown arrangements are now set up as flexi-access drawdown. scheme, where the amount of income you can take is kept within strict limits. You can transfer capped drawdown arrangements into the James Hay Modular iSIPP.

You can move out of capped drawdown into flexi-access drawdown A pension income drawdown arrangement where there are no limits on how much can be taken out of a pension fund or when. All income drawdown arrangements set up from 6 April 2015 onwards are offered on a flexi-access basis. Once a pension fund is moved into flexi-access drawdown, an investor can only make new pension contributions (including tax relief) of up to £4,000 a year. See also Capped drawdown. at any time at James Hay. However, some people choose to stay in capped drawdown. This can be because they like the limits put on the income they can take. Also, those in capped drawdown can pay in up to £40,000 a year, including tax relief, whereas those using UFPLS or flexi-access drawdown are limited to making new contributions of £4,000 a year.

Please note, it is not possible to combine capped drawdown and flexi-access drawdown in the Modular iSIPP.

Risks to consider

  • Drawing down too much money can deplete a pension fund and reduce its ability to generate a sustainable income throughout retirement
  • If the fund remains invested, its value can fluctuate and experience losses as well as gains.
  • The level of income you can draw down is not guaranteed.
  • Determining an appropriate investment strategy to generate a sustainable income and maintain the value of the remaining fund can be complex and may require financial advice.

Take an uncrystallised pension funds lump sum (UFPLS)

It’s an odd-sounding term but an uncrystallised funds pension lump sums A way of taking money out of a defined contribution pension without going into income drawdown or buying an annuity. UFPLS allows a pension fund to be taken as a single, or a series of, lump sums. A quarter of each sum withdrawn is tax-free while the remaining 75% is added to the individual's taxable income in that year and taxed accordingly. Choosing to take UFPLS rather than moving to income drawdown can be less tax-efficient for some people as every UFPLS payment is subject to 75% tax. By contrast, income drawdown allows the 25% tax-free sum and the remaining taxable income to be taken independently, which can allow for more careful tax-planning. Taking an UFPLS also limits the amount that can be contributed into pension and receive tax relief to £4,000 per tax year. simply involves taking money out of a pension from age 55 without the need to move into an income drawdown arrangement. James Hay can facilitate UFPLS and it has the appeal of being very straightforward. But bear in mind that 75% of every UFPLS payment is liable to income tax. Also, if you withdraw more than the lifetime allowance (currently £1 million), 55% tax is payable on the excess.

Risks to consider

  • 75% of each lump sum payable is liable to income tax; large withdrawals could push you into a higher tax bracket
  • Making a large number of lump sum withdrawals will reduce the fund available to provide a retirement income
  • If the fund remains invested, its value can fluctuate and experience losses as well as gains.


Getting advice and guidance

The choices you make for your pension fund can determine the level of income you receive for the rest of your life. For this reason, investors are recommended to seek regulated financial advice and guidance to decide the best course of action to take.

James Hay cannot provide advice. If you would like to speak to a financial adviser but do not have one, please visit www.unbiased.co.uk to find a regulated adviser in your area.

If you are planning to take money out of your pension in the near future, you are also entitled to free, impartial guidance from Pension Wise. You can receive Pension Wise guidance online, over the phone or face to face. Visit www.pensionwise.gov.uk or call either 0800 138 3944 or 0300 330 1003 (from outside the UK +44 20 3733 3495), if you wish to use this service.

Annuities

At or before retirement you can use some or all of your pension fund to buy an annuity to provide a guaranteed retirement income. James Hay does not provide annuities. But you are free at any time from age 55 to use your James Hay Modular iSIPP fund to buy an annuity with a third-party provider.

Factsheet

Read more about your options for accessing your pension here.


The Money Advice Service has produced a brochure to explain your options at retirement.

> What could I get in retirement

> Making the most of pension freedom

> Avoiding pension scams

> What you can do at 55 and how we can help

> Consolidating your pensions with James Hay

> How to take money from your pensions with James Hay

> Income-planning with the Modular iPlan