Taking your pension flexibly

The earliest you can access your pension savings is when you reach your 55th birthday, an age set by the government. Creative Pension Trust gives you freedom and flexibility in choosing how to draw your pension. Flexi-Access Drawdown isn’t suitable for everybody, but it does give you the flexibility to access your pension now without locking you into an arrangement that you can’t change. For example, you may:

If you choose Flexi-Access Drawdown you can draw from your tax-free cash allowance, either in one go or in multiple varying amounts. You can take up to 25% of your pension savings tax-free and the remaining three quarters will be taxable when you choose to take it.

Each time you take a tax-free lump sum payment, we will automatically transfer three-times the amount you have taken from your Creative Pension Trust Account into a new Flexi-Access Drawdown Account. This way, we can give you your tax-free cash whether you decide to take it all at once or in a number of smaller withdrawals, without you needing to take taxable benefits too.

The amount transferred into your Flexible Access Drawdown Account will be taxable at your highest marginal rate of Income Tax when you decide to draw it. This is normally calculated using emergency tax, and you will need to settle any overpayments or underpayments with HMRC directly.

The rest of your pension savings will remain in your existing Creative Pension Trust Account where they can continue to grow through further contributions and investment growth*.

Yes, you will need to actively review and manage your pension arrangements. It’s important to remember that your pension savings will remain invested until you draw them, so you will need to be comfortable that your pension is appropriately invested.

Your pension savings will remain invested in the same funds until you tell us otherwise. Investments can fall as well as rise, so you will need to consider how frequently and soon you are likely to draw some of your pension. You may consider switching some of your pension into investments designed to preserve the value of your savings, so that money is ready to be drawn when you need it.

Because Flexi-Access Drawdown does not guarantee your income and your pension will not last forever, you will also need to regularly review how much you are taking to ensure you are not going to run out of money too early.

Finally, because your Creative Pension Trust account will remain open, it’s really important that you keep your information up to date. Using the Creative Pension Trust Member Portal you can:

Yes, this option provides the greatest level of flexibility. You can access your pension savings periodically in the most tax efficient way and you can still change your mind about how you want to receive your pension income in the future if your needs change.

This way, you could begin drawing your pension as and when you need to, take no further income in future if you don’t need it and preserve the remaining value, or convert your savings to a guaranteed income further down the line.

Yes, there are limits that apply to this option. These are:

Yes, there are further additional considerations that may impact your decision making and future plans. These are:

For more information, visit Age UK, the Citizens Advice Bureau, or MoneyHelper, who also offer telephone and face-to-face appointments.

Yes, up to 25% of your pension pot will be paid free from tax. The remaining three-quarters will be treated as taxable income when you start to draw it.

Yes, up to 25% of your pension pot will be paid free from tax, the remaining three-quarters is treated as taxable income when you draw it. You may be charged emergency tax by HMRC when you draw some of your pension savings and you will need to settle any overpayments or underpayments with HMRC directly.

No, flexi-access drawdown does not provide any income guarantees. Although you have flexibility around how and when you use your pension savings, you will need to actively manage your finances and perform regular checks to ensure you will not run out of money by taking your savings too quickly.

If you decide you would like a guaranteed income later on and you have sufficient pension savings left in your Creative Pension Trust account, you still have the flexibility of using your money to buy an annuity, which can provide guaranteed income.

If you die before your 75th birthday, your pension pot will be paid to your nominated beneficiaries, subject to the normal checks. This may be your family and loved ones or even a charity.

You can tell us what you would like to happen by nominating your beneficiaries in the Creative Pension Trust Member Portal[link to login page]. The payment is usually tax-free unless you die after your 75th birthday, in which case tax is paid according to the recipient’s tax position.

You are 60 years old and have pension savings of £60,000. You have decided you would like to help your grandchild get a foot on the property ladder by paying £5,000 towards a house deposit.

In order to do this, £20,000 of your pension savings are transferred out of your Creative Pension Trust Account.

The first 25% (£5,000) is paid to you tax free and the remaining three quarters (£15,000) is transferred into a new Flexi Access Drawdown account. The balance in your Flexi Access Drawdown account can then be accessed in the future and will be taxed at your highest marginal rate when you draw it.

As you still have a balance of £40,000 in your Creative Pension Trust Account, this stays invested for the future. When you need to access further tax-free cash lump sums of up to 25% of the amount in this account, we will pay this to you free of tax and transfer three-times the amount you requested into your Flexi Access Drawdown account. You will still be able to pay in to your Creative Pension Trust account, meaning you can benefit from employer contributions, tax relief (where available) and investment growth***.

However, when you access any savings from your Flexi Access account, you will be subject to the ‘Money Purchase Annual Allowance’, which means the total you can pay into any and all of your pension arrangements, as well as Creative Pension Trust, is £4,000*** in any one year.

The earliest you can access your pension savings is when you reach your 55th birthday, an age set by the government. Creative Pension Trust gives you freedom and flexibility in choosing how to draw your pension. ‘UFPLS’ isn’t suitable for everybody, but it does give you flexibility to access your pension now without locking you into an arrangement that you can’t change.

For example, you may:

It is important to remember that, on average, someone who is aged 55 today will likely live into their mid-to-late 80’s. This means your pension will likely need to last you a long time. Whilst flexi-access drawdown offers you freedom and choice to use your savings as you wish, you will need to ensure you do not run out of money by drawing from your savings too quickly.

If you choose UFPLS you can draw the savings you need, and the remainder stays in your Creative Pension Trust account where it can continue to grow through further contributions and investment growth*.

Rather than accessing all of your tax-free cash in one go, UFPLS spreads your tax-free cash across each amount you take. Each time you access your savings, 25% of the amount you draw will be paid to you tax-free and the remaining three-quarters will be taxed at your highest marginal rate. This is normally calculated as emergency tax, and you will need to settle any overpayments or underpayments with HMRC directly.

Depending on the amount of other taxable incomes you may have, UFPLS can be used to provide a top up to your income in a very tax efficient way because 25% of each payment is tax-free.

However, if you are already receiving a relatively high level of taxable income from other sources this option can increase your overall tax bill significantly, particularly if all your incomes combined pushes you into a higher tax bracket.

Yes, you will need to actively review and manage your pension arrangements. It’s important to remember that your pension savings will remain invested until you draw them, so you will need to be comfortable that your pension is appropriately invested.

Your pension savings will remain invested in the same funds until you tell us otherwise. Investments can fall as well as rise, so you will need to consider how frequently and soon you are likely to draw some of your pension.

You may consider switching some of your pension into investments designed to preserve the value of your savings, so that money is ready to be drawn when you need it. Because UFPLS does not guarantee your income and your pension will not last forever, you will also need to regularly review how much you are taking to ensure you are not going to run out of money too early.

Finally, because your Creative Pension Trust account will remain open, it’s really important that you keep your information up to date. Using the Creative Pension Trust Member Portal you can:

Yes, you can access your pension savings periodically in varying amounts and you can still change your mind about how you want to receive your pension income in the future.

This way, you could begin drawing your pension as and when you need to, take no further income in future if you don’t need it and preserve the remaining value, or convert your savings to a guaranteed income further down the line.

Yes, there are limits that apply to this option. These are:

Yes, there are further additional considerations that may impact your decision making and future plans. These are:

For more information, visit Age UK, the Citizens Advice Bureau, or Pension Wise, who also offer telephone and face-to-face appointments.

Yes, but this option is designed to spread your tax-free cash across each withdrawal you make, it may not be right if you need to access all of your tax-free cash in a single lump sum.

Yes, although the first 25% of each amount you draw will be paid free from tax, the remaining three-quarters is treated as taxable income. You may be charged emergency tax by HMRC when you draw some of your pension savings and you will need to settle any overpayments or underpayments with HMRC directly.

No, UFPLS does not provide any income guarantees. Although you have flexibility around how and when you use your pension savings, you will need to actively manage your finances and perform regular checks to ensure you will not run out of money by taking your savings too quickly.

If you decide you would like a guaranteed income later on and you have sufficient pension savings left in your Creative Pension Trust account, you still have the flexibility of using your money to buy an annuity, which can provide guaranteed income.

If you die before your 75th birthday, your pension pot will be paid to your nominated beneficiaries, subject to the normal checks. This may be your family and loved ones or even a charity. You can tell us what you would like to happen by nominating your beneficiaries in the Creative Pension Trust Member Portal [link to login page]. The payment is usually tax-free unless you die after your 75th birthday, in which case tax is paid according to the recipient’s tax position.

You are 59 years old and have a pension pot of £40,000. You want to reduce your working hours a little and would like to draw some of your pension so you can supplement your income. To do this, you decide to take an initial sum of £4,000 from your Creative Pension Trust account.

The first £1,000 of the sum is paid to you tax-free. The remaining three-quarters you take is taxable at your highest marginal rate. So, if you are a Basic Rate taxpayer, you will need to pay £600*** on the remaining £3,000, leaving you £2,400. In total, you will have £3,400 to spend after tax. If you are a Higher Rate taxpayer, or if taking the £4,000 on top of your existing income pushed you into the Higher Rate tax bracket, the first £1,000 of the sum would still be tax free, but the tax on the remaining three-quarters would be £1,200***. In total, you would have £2,800 to spend after tax.

As you still have a balance of £36,000 in your Creative Pension Trust Account, this stays invested for the future and you retain access to future lump sums as and when you need them. You will still be able to pay into your Creative Pension Trust account, meaning you can benefit from employer contributions, tax relief (where available) and investment growth*.

However, because you have accessed your pension benefits, you will be subject to the ‘Money Purchase Annual Allowance’, which means the total you can pay into any and all of your pension arrangements, as well as Creative Pension Trust, is £4,000*** in any one year.

Important information about pension investments and retirement: