Leave it where it is
Wait until you're ready
You don’t have to take money from your pension as soon as it's available to you. In fact, if you leave it where it is, you give your money more opportunity to grow[²]. While it’s untouched, your money stays invested, so it can still go up or down in value.
You can also keep paying into your pension, which could boost your savings even further – and you’ll still get tax relief on contributions (within limits). You won’t pay any income tax until you start taking money out.
When you're ready, you can access your pension in a way that works for you. Lump sum payments, flexible income, a guaranteed income, or a mix of all three.
Capital at risk. The value of your investments can go down, as well as up, and you can get back less than you invested.
There are no additional fees or hidden charges for accessing your pension with NatWest Cushon.
Why might you choose to leave your pension where it is?
- You have other sources of income that provide a comfortable amount to live on.
- You want to delay withdrawing and benefit from potential investment growth, and less time relying on your pension savings.
- Leaving your pension invested for longer can give it more time to potentially grow in value[²].
- Delaying withdrawals means less time relying on your pension savings.
What happens to your pension savings?
If you choose not to take your pension straight away, your pension pot will stay right where it is until you're ready. There’s no requirement to start drawing your pension just because you’ve reached a certain age, and delaying can sometimes work in your favour. Here’s what to keep in mind:
Your savings stay invested. By leaving your pension invested, your money has the opportunity to grow[²]. This can be beneficial if investment markets perform well, but it’s important to remember that all investments can go down as well as up in value.
You can continue contributing. If you're still working, you can usually keep paying into your pension and your employer may keep contributing too. These extra payments can help grow your pot further before you start drawing from it. Just be aware of the annual allowance, which limits how much you can contribute each tax year while still getting tax relief. Also, if you have dipped into a pension pot elsewhere, you will be subject to the money purchase annual allowance, which is lower.
Tax rules apply. Leaving your pension untouched won’t affect the tax-free status of your pot. You’ll still usually be entitled to take 25% of your pension tax-free[⁴] when you decide to access it.
No action doesn’t mean no plan. While leaving your pension where it is can be a smart move, it’s still important to have a plan. Think about how long you intend to delay, whether your savings are invested in a way that reflects your goals, and how you’ll know when the time is right to start accessing your money.
Example: Tax-efficient saving with your pension
Imagine you’re 55, employed, and you pay basic rate income tax. Your pension pot is currently £10,000, and you regularly contribute to your NatWest Cushon account each payday. Every month, your total pension contribution is £150: £93.75 from you and £56.25 from your employer.
As a basic rate taxpayer, you receive tax relief on your contributions, so contributing £93.75 only costs you £75 from your take home pay. With the addition of your employer’s payments, you save £150 toward retirement each month at a personal cost of just £75. This makes workplace pensions one of the most tax-efficient ways to save for the long term.
If you continue contributing until age 65, this would give you an extra £18,000 for your retirement, not including any investment growth.
Stay in control with the Cushon app
Use the Cushon app to keep your pension close at hand and make it easier to plan the future you’re hoping for.
- Access your pension options.
- Set a target age for accessing your pension.
- Choose beneficiaries to leave your pension to.
- Manage your regular contributions or withdrawals.
- Find and combine[³] old pensions.
- Choose your own investments if you'd like.
Where to find help making decisions
Financial guidance: general know-how to help you make your own decisions
Guidance is a great place to start to build your knowledge about pensions and other personal finance topics. It covers need-to-know info and tips that work for most people, but it isn’t tailored to your goals or circumstances.
If you’re comfortable making your own decisions, guidance services give you the chance to ask questions and get answers from knowledgeable experts. You can get a clearer understanding of your choices, but you can’t get a specific recommendation or advice.
You can access MoneyHelper, a free service provided by the government to provide general guidance on your pension options, by visiting the MoneyHelper website or by calling 0800 011 3797.
If you are aged 50 or over, you can also book a free and impartial Pension Wise appointment. This gives you 45-60 minutes of specialist pension guidance to help you understand your options. It can be on the Internet, over the phone or face-to-face and local to you.
Financial advice: specific recommendations from a professional adviser
Professional financial advice is different to financial guidance because it’s specifically tailored to you.
An independent financial adviser can talk you through your options, explain how they fit with your other financial products, and also make a personalised recommendation based on your goals and circumstances.
They can also work with you to set realistic goals, create a personalised financial plan that considers your specific needs, and make sure your savings, taxes and more are working together to your best advantage.
It’s not free though. If you hire a professional financial adviser, you should expect to pay a fee. You can find a list of regulated financial advisers at MoneyHelper.
Watch out for pension scams
You’d be surprised by how convincing and sophisticated scammers can be. Watch out for emails, calls or letters from businesses or strangers who claim to have a great deal for you.
Reject unexpected offers.
Know who you are dealing with.
Check any contact details.
Don’t be rushed or pressured.
Get impartial information.
For more tips and advice visit the ScamSmart website.
We do not charge, but some pensions may charge an exit fee.
Combine your pensions
It could be hard to know what you've got to rely on in retirement if your pension savings are in multiple pots or even lost. Iris tracks down your old pots and combines them into a single pension with NatWest Cushon. Completely free of charge.
Common questions about leaving your pension where it is
You and your employer can save a total of £60,000[¹] tax free into your pension every year. This is known as the annual allowance. If you pay tax on what you earn, you will receive tax relief on what you pay in up to a maximum of 100% of your earnings or the annual allowance, whichever is lower. Any amounts above this cap attract a tax charge.
It is important to note that this reduces to £10,000[¹] if you have begun taking benefits from any pensions you have. This lower limit is called the money purchase annual allowance.
Yes, because you aren’t making any commitments about your retirement, you retain the flexibility you’ve always had with your NatWest Cushon pension. You may want to consider:
- Increasing your contributions so your pot can continue to grow
- Consolidating other pensions from previous jobs so everything is easier to manage in the run up to your retirement[³]
- Ensure the way your pension savings are invested are appropriate based on when and how you think you might want to retire
No, until you begin taking money out of your pension, you will not have to pay income tax. However, if you continue paying money in, you may benefit from tax relief if you pay tax on what you earn.
No, but when you start accessing your pension pot, you can take tax-free cash at that time.
No, not until you decide how you would like to access your pension savings.
If you die before age 75, your pension can be paid tax-free to your nominated beneficiary, up to a limit of £1,073,100 (minus any tax-free cash already taken). Any lump sums above this limit are usually taxed at the recipient’s income tax rate.
If you die after age 75, all income and lump sums are taxed at the beneficiary’s income tax rate.
Currently, pension death benefits are not counted as part of your estate for inheritance tax. However, from April 2027, as announced in the Autumn 2024 Budget, these benefits may become subject to inheritance tax.
Pension expert, Sarah, on why nominating a beneficiary matters.[⁵]
Other ways you can access your money
1. Allowances, limits and tax bands are set by the Government and subject to annual review. All information provided is based on current legislation and HMRC rules, which are subject to change.
2. Capital at risk. The value of your investments can go down, as well as up, and you can get back less than you invested.
3. You should understand the features and charges of other pensions first and seek professional financial advice if you are not sure. Check with your product provider before transferring as there may be a penalty for leaving their scheme.
4. Some people are allowed to withdraw more than 25% tax free cash. This is known as Protected Tax-Free Cash. This could apply to you if you have a certificate from HMRC confirming your protection or your pension has scheme-specific tax-free cash attached to it.
6. Source: The Office of National Statistics