Take a regular monthly income
Learn how to take a regular monthly income from your pension savings, and whether it’s right for you.
Taking your pension as a regular monthly income
You can start taking your pension money from age 55 (57 from 2028).
This option gives you flexibility over how much you take and when, giving you a clearer picture of how long it might last. It could also reduce the amount of tax you pay, while keeping your pension invested. We’ll explain how this works with People’s Pension and what to consider before choosing this option.
How to take a monthly income with People’s Pension
To chose a regular income, you’ll first need to tell us how much of your money you’d like to move out of your pension and into a flexi-access drawdown account. 25% of this value will be paid to you as a tax-free lump sum, the rest can then be taken as a regular income.
What you need to know:
- You’ll need to have saved at least £10,000 in your pension.
- You need to choose how to take your tax-free lump sum first (usually 25%). For example, you can take it all at once or spread it out over time.
- You need at least £1,500 in your flexi-access drawdown account to set up your monthly income.
- You'll need to take at least £50 a month (before tax) as a regular monthly income.
- Any money you don't take yet stays invested, giving it a chance to grow.
Other providers may do things differently.
How much pension money do you need?
Think about how much money you’ll need in retirement to:
- cover everyday costs
- give you the lifestyle you want.
Your monthly income should reflect what you expect to spend in retirement.
If you’re unsure:
- Check your pension balance and how much you could get in future using your online account.
- Use our retirement planner to explore different options, so you can plan for the future with confidence.
How much tax will you pay?
If you choose to take a regular income, you can usually take up to 25% of your pension savings as a tax-free lump sum. You can find out more on our tax-free lump sum page.
Remember, taking money from your pension this way, in a single tax year, could mean paying more tax. This is because your pension withdrawals are taxed in the same way as other forms of income – like your salary. You may also trigger the money purchase annual allowance, which reduces how much you can contribute to your pension in a year and still receive tax relief. Read more about this on our pension tax page.
Bring your pensions together to see the full picture
If you’ve got more than one pension, bringing them together could make things easier to manage. Your combined savings could also unlock new ways to take your money, as some options, including this one, are only available with us if you have more than £10,000 in your pension.
Is monthly flexible income right for you?
Everyone’s circumstances are different, so it’s important to choose the right option for you.
You might also want to consider:
- Money purchase annual allowance: The amount you can save into a pension and receive tax relief on reduces once you start taking a regular income.
- Loss of protection: If you’re entitled to take more than 25% of your pension as a tax-free lump sum, you may lose this protection if you choose not to take it all in one go using flexi-access drawdown.
- Changing pension value: Your pension is invested and so can go down or up based on investment performance. This is normal, but it means your projected value isn’t guaranteed.
- Regular check-ins: You may want to regularly review your income to make sure it still meets your needs.
How to set up your monthly flexible income
Before you set up your regular monthly income, you’ll need to tell us whether to move some or all your pension savings into a flexi-access drawdown account.
The quickest way to do this and to set up your regular income is through your online account – it only takes around 15 minutes. If you prefer to speak with someone, call us on 0300 2000 555.
We'll need to know:
- Details of any other pensions you’ve taken money from, and how much.
- If you receive any means-tested income.
- If you’ve registered for lifetime allowance protection.
- Your bank account details.
Just so you know
We may also use an electronic service to check your identity or ask for further proof. We may also ask if you’re a politically exposed person, as we must complete certain checks. This is to protect you and your money. Having your personal details ready can speed up this process.
