When you're ready to start taking the money you've built up in the Plan, you have a few options for how to do that. You can:
- buy an income for life
- take your pot as cash
- take some of your pot and invest the rest
You can either choose one of these options or combine them.
With all of these options, you can also take 25% of your money as a tax-free cash lump sum.
Buying an income for life
You can use the money you've built up to buy a guaranteed income - also called an 'annuity'. This will pay you a certain amount every year for the rest of your life.
This option takes away the worry of running out of money. But the income it gives you may be smaller than with other options.
You can choose to buy a fixed annuity, which pays you the same amount every year. Or you can buy an increasing annuity, which increases each year in line with inflation. Some annuities also pay a pension to your spouse or partner if you die before them.
You buy an annuity through an insurance company. Different companies offer different rates, so it's a good idea to shop around before you choose one.
Taking your pot as cash
You can take all your money as cash in one go, as long as Unilever and the Trustees agree to it.
The money will need to last you the rest of your life though, so you'll need to be careful you don't run out. And taking all your money in one go is very likely to mean you get a big tax bill.
Taking some of your pot as cash and investing the rest
You could take a bit of your money at a time, while leaving the rest invested so it has more opportunity to grow. You could do this by transferring your pot to a different pension arrangement, which might allow you to take an income from your pot as and when you choose (called 'drawdown'), or to take multiple one-off lump sums (called 'uncrystallised flexible pension lump sums', or 'UFPLS').
As with all investments, there's a chance your money doesn't give you the returns you were hoping for. You might also live longer than you expect. This means it can be difficult to make sure you have enough money to last you. But if there is money left over when you die, you can leave it to someone.
These options aren't available within the Plan. If you'd like to use your money in these ways, you'll need to move all or some of your money to a different pension arrangement. To do this, contact Fidelity.
Tax-free cash lump sum
With all of these options, you can take up to 25% of your money as a cash lump sum. This lump sum will be tax-free, as long as you take it before you turn 75.
After you've done that, everything else you take out will be taxed as if it were income.
How to decide what's right for you
You can use our modeller to see how much money you could get with each option.
If you'd like advice on what to do, you could talk to an independent financial adviser. They'll look at your circumstances and recommend the option that might be right for you.
Find a financial adviser.