💰 Take all your money in one go

You can withdraw all of your pension savings as a single cash payment. The first 25% is tax-free, and the rest is taxed as income.

This might work for you if:

• You have other sources of retirement income
• You want full control over how to use or invest your money
• You’re comfortable managing a large sum

Things to consider:

• Taking everything at once could push you into a higher tax bracket
• Spending it too quickly might leave you short of money later
• Future pension contributions will be limited to £10,000 per year for tax relief

🏧 Take your money in stages (up to 3 withdrawals)

You can leave your savings invested in the Fund and withdraw money in up to three separate cash payments. Each time you withdraw, 25% is tax-free and the rest is taxed as income.

This might work for you if:

• You want some money now but not everything
• You’d like to keep some savings invested
• You want to spread withdrawals across different tax years

Things to consider:

• Your investments could go down as well as up
• You’ll need to monitor your investments and charges
• After your first withdrawal, future pension contributions are limited to £10,000 per year for tax relief
• There’s a £125 + VAT charge for your third and final withdrawal

💸 Buy a guaranteed income for life (annuity)

You can use your savings to buy an annuity from an insurance company, giving you a guaranteed income for the rest of your life. You can take up to 25% as tax-free cash first, with the remainder buying your income.

This might work for you if:

• You want certainty and a guaranteed income
• You don’t want to worry about investments or running out of money
• You value peace of mind over flexibility

Things to consider:

• Once you’ve bought an annuity, you can’t change your mind
• If you die earlier than expected, you might not get full value from your savings
• You won’t have access to lump sums for unexpected expenses
• The income is based on rates when you buy – if rates improve later, you won’t benefit

📈 Keep investing and withdraw flexibly

Drawdown lets you keep your money invested and withdraw income as you need it – taking more than three withdrawals with complete control over when and how much.

This option isn’t offered directly by the Fund, but you can transfer your savings to a drawdown provider to access this flexibility.

This might work for you if:

• You want complete flexibility over when and how much you withdraw
• You’re comfortable managing your own investments
• You want to take regular income or occasional lump sums

Things to consider:

• You’ll need to transfer out of the Fund to a drawdown provider
• You’ll need to manage your investments throughout retirement
• Your money could run out if you withdraw too much or live longer than expected
• Future pension contributions are limited to £10,000 per year for tax relief after your first withdrawal

The Fund has arranged access to the Mercer Master Trust Retirement Section for members who want to use drawdown. This lets you control when, how much, and how often you withdraw money (minimum pot: £30,000, no financial advice included).

🥗 You can mix and match

You don’t have to choose just one option. For example, you could:

• Take 25% as tax-free cash and use the rest to buy an annuity
• Take some cash and transfer the rest to drawdown
• Split your savings between different options