About the L&G Mastertrust > How will I pay into the L&G Mastertrust > How will my pension pot be invested? > How will I be able to use my pension pot?
How will I be able to use my pension pot?
You’ll have a number of choices about how you can use your pension pot from the L&G Mastertrust.
How will I be able to use my pension pot?
You’ll have a number of choices about how you can use your pension pot from the L&G Mastertrust.
How you choose to use your pension pot will be entirely up to you. You could do one of the following (or a combination of all three):
Take all (or some) of your pension pot as cash
You could either leave your money in your pension pot and take cash amounts from it as and when you wish until your money runs out. Or, you could take it all as cash in one go.
You can decide how much to take out and when. Any money left in your pension pot will remain invested in the L&G Mastertrust, which may give your pension pot a chance to grow, but it could go down in value too.
You can take up to a quarter (25%) of your pension pot as a tax-free cash amount and any further cash amounts or income that you take will be subject to income tax.
Buy a guaranteed income
You could use your pension pot to buy a lifelong, regular income – known as an ‘annuity’ – from an insurance company. You can normally choose whether to buy an income that stays the same throughout your retirement or increases each year. You can also normally choose to buy an income that could be passed on to your spouse (or other dependants) after your death.
A quarter (25%) of your pension pot can be taken tax free and any other income you take from it will be taxed.
If you choose this option, you can’t change your mind later.
Get a flexible retirement income
You could keep your money invested and take a regular income from it in retirement – known as ‘drawdown’. You could do this with another provider of your choice, or through the L&G Mastertrust.
Drawdown gives you the option to use your pension pot flexibly, whilst still keeping the savings you haven’t used invested with the aim that they will grow over time.
A quarter of your pension pot can be taken tax-free first, and then any other money you take out will be taxed.
You can explore your options for using your pension pot further with L&G’s retirement planning tools.
When can I start to use my pension pot?
You will be able to start to use your pension pot in the L&G Mastertrust from age 55. This is known as the Normal Minimum Pension Age (or NMPA).
The NMPA of 55 is rising to age 57 from 6 April 2028, in line with increases to the State Pension Age.
It is important that you check and update your Selected Retirement Date by logging into your L&G pension account, My Account (MA).
This is the age that you think you will want to start to use your pension pot. Getting this right will be important to make sure that you are invested in the right funds as you got closer to your Selected Retirement Date.
If you don’t choose a Selected Retirement Date, it will automatically be set to age 65 – but you can change that at any time.
