Retirement today looks very different from the past. With traditional defined benefit pensions becoming rarer and people living longer, the responsibility for funding and managing your retirement has shifted firmly onto your shoulders.
Planning for retirement is no longer just about saving, it’s about understanding how to access and structure your income so it supports the lifestyle you want for as long as you need it.
Whether you’re approaching retirement or already enjoying it, knowing your income options is crucial to making confident, informed decisions.
The choices you make now will shape how comfortable and secure your life will be after you stop working. Will you use your savings to take a large lump sum to enjoy the holiday of a lifetime? Keep your investments growing for the future? We believe in simplifying this journey. Our goal is to help you maximise your retirement income through smart, flexible investment strategies tailored to your needs.
What are your retirement income options?
When you retire, your income typically comes from a combination of:
- State Pension
- Private or workplace Pensions (Defined Contribution or Defined Benefit)
- Personal investments (ISAs, General Investment Accounts)
- Property or other assets
- Business disposal
Knowing how and when to access each of these, and how they interact, is crucial for a sustainable retirement plan. Retiring the correct way will never look the same for everyone. Therefore, carefully planning for the retirement you’ve worked so hard early will avoid trouble further down the road.
Accessing your pension pot
For those with a defined contribution pension, you have several options from age 55 (rising to 57 in 2028).
Drawdown – You can keep your money invested while taking an income. Our investment portfolios are ideal for this, offering diversified, actively managed strategies tailored to your risk level and time horizon. Don’t forget, that whilst the investment grows, the gains you make are tax free.
Annuities – Exchange your pension for a guaranteed income for life. In the past defined benefit pensions substituted this, but now you are still able to purchase annuities, for the guarantee of an income. Do bear in mind that the money you fix for the annuities (most of the time) will not then be inheritable, meaning that beneficiaries will not have any of the money when death occurs.
Our retirement investment products
Our SIPP operates similarly to a defined contribution pension scheme, but it offers significantly more control over how your pension savings are invested compared to traditional pensions. Contributions can be made gross of income tax for individuals, meaning you benefit from tax relief, or by limited companies as employer contributions, which are typically treated as a deductible business expense for corporation tax purposes.
Once inside the pension, your investments grow tax efficiently. You do not pay tax on dividends, interest, or capital gains, which allows your pension pot to compound more effectively over time. When it comes to accessing your pension, currently from age 55 – increasing to 57 from 2028 – you can normally take 25% of your total pension pot as a tax-free lump sum, known as the Pension Commencement Lump Sum (PCLS). The remaining balance is taxed as income when withdrawn, according to your marginal rate.
Although the Lifetime Allowance (LTA) was abolished in April 2024, the Lump Sum Allowance (LSA) remains in place. This means the maximum tax-free lump sum is capped at £268,275, which equates to 25% of the previous LTA of £1,073,100. For individuals with pension savings exceeding this amount, the tax-free element is still limited to £268,275, unless they hold a valid form of LTA protection.
Whether you’re starting fresh or bringing your pensions together, we make it simple to take control of your retirement savings. From the outset, we’ll match you with a carefully chosen portfolio designed to suit your goals, time horizon, and attitude to risk. But our work doesn’t stop there, we continually review your portfolio to ensure it stays aligned with your changing needs, market conditions, and retirement plans.
Our Find, Check and Transfer service takes the hassle out of locating old workplace pensions. With just a few details, such as the companies you’ve worked for, we’ll track down missing pension contributions you may have lost touch with. Add as many past workplaces as you like, and once we’ve found your pensions, we’ll consolidate them into one easy-to-manage plan. This way, you can see your full retirement picture in one place, stay on track, and make better-informed decisions about your future.
A powerful, tax-efficient tool for retirement planning. You can save up to £20,000 a year tax free. All withdrawals are tax-free and flexible, and it’s ideal for supplementing your pension income without affecting your tax allowances.
Our ISA is flexible, so you can add your withdrawals back in – within the same tax year – without affecting your current year’s allowance.
General Investment Account (GIA)
A GIA has no contribution limits, making it a flexible way to invest any additional savings. While the growth is taxable, there’s no cap on how much you can contribute.
For individuals with savings that exceed the annual contribution limits for tax-advantaged accounts, a General Investment Account (GIA) serves as a flexible way to continue investing. While an Individual Savings Account (ISA) allows for tax-free growth, and a pension offers upfront tax relief on contributions, a GIA is subject to Capital Gains Tax on profits and Income Tax on dividends and interest.
To maximise tax efficiency, a common strategy is to move investments from a GIA into an ISA or pension at the beginning of each new tax year, a process sometimes called a “Bed and ISA”. This allows a person to use their refreshed annual ISA allowance, which is £20,000 for the 2025/26 tax year. Similarly, they can contribute to their pension, which has an annual allowance of up to £60,000 for the same tax year (this depends on their relevant earnings and not taken any income from their pension already). By doing this, they can ensure their investments benefit from the tax protections of these accounts, which are typically prioritised for long-term wealth growth.
How we help you turn savings into income
Moneyfarm isn’t just about growing your wealth, it’s about sustaining it through retirement. Here’s how.
- Personalised guidance: Whether you’re drawing from your SIPP or looking to generate income from your ISA, our team of Investment Consultants and Wealth Managers can provide tailored guidance to help you withdraw efficiently and sustainably.
- Risk-based portfolios: Choose your level of risk. We’ll recommend a suitable risk level based on your risk profile and time horizons.
- Income planning tools: Estimate how long your savings will last, project returns, and test different withdrawal scenarios with our Guidance + service.
- Regular reviews: We keep your portfolio aligned with your retirement goals as markets and your personal circumstances change over time.
Peace of mind in retirement
Your retirement should be the reward for years of hard work and a time to focus on what matters most to you.
With us, you stay firmly in control, deciding how and when to use your savings. Our dedicated Investment Consultants and Wealth Managers are by your side, offering expert guidance whenever you need it.
And with our clear, low-cost fees, more of your money stays invested and working for you. Our different tiers provide different levels of support based on your needs.
Ready to take control of your retirement?
Planning your pension is one of the most important financial decisions you’ll ever make. Knowing what you want, understanding what you have, and having a clear plan to bridge the gap can make all the difference.
By taking action now, you can give yourself the freedom, security, and confidence to enjoy the years ahead on your terms. Whether you’re five years away from retirement or already drawing an income, we can help you create a retirement plan that works.
Explore your options, open an account, or speak to a member of our team who will be happy to help. Simply give us a call, email or book an appointment online and we’ll help you get your retirement savings on track.
With investing, your capital is at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
