About your pension
Managing your pension
Managing your pension
Moving a pension What happens if you leave BNP Paribas? What happens to my pension when I die?
Who manages your pension?
Overview
Choosing income options
You have more choice and flexibility in how you set up your retirement income than ever before. So there are more things to consider – tax rules, legislation, the decisions you make now, all of these will affect the options available to you in the future.
Approaching retirement?
If you’re planning to retire in the next few years, you may want to start thinking about what you’re going to do with the pension savings you’ve built up. There’s a great deal of flexibility about how you take an income from your savings. That means it’s a good idea to check out the pros and cons of the various options, and see how they will each affect your lifestyle, the tax you pay and the amount you can pass on to your family.
Factor in your State Pension
The BNP Paribas Pension isn’t the State Pension – it's a completely separate arrangement, but the State Pension should form part of your retirement planning.
The State Pension is paid by the government when you reach retirement age and is an additional source of income to your workplace pension. The amount you receive from the State Pension is based on the National Insurance contributions you have paid.
Check your State Pension forecast by clicking here and what age you are eligible to start receiving it here.
Your income options
The headings below outline the main ways you can take money out of a defined contribution pension, also known as a money purchase pension. (With a defined benefits or final salary scheme, your options are likely to be different.)
It is usually possible to take money out of your pension from when you are 55 (age 57 from 2028), and you will probably be able to take 25% of your savings as tax-free cash.
It’s worth bearing in mind that you don’t have to choose just one of these options. You can combine two or more options if that is better for you – for example, you might want to buy an annuity with part of your pot and take lump sum withdrawals from the rest. If you have multiple pension savings accounts, you can choose a different option for each of them.
Choosing a pension product is like any other major buying decision – it’s important to shop around so you can compare charges and make sure you find an option that is right for you. You’ll find more information on the Pension Wise website.
| Flexible income (drawdown) | Lump sums | Guaranteed income for life (annuity) | Leave it where it is |
|---|---|---|---|
| You can leave your money in your pension and take a regular income from it. | You can leave your money in your pension and withdraw ad hoc lump sums, as and when you need them. | You can move your money to an insurance company in exchange for a regular, lifelong income. | You can delay taking money from your pension until the time is right for you. |
| See how flexible income works | Find out about taking lump sums | Explore annuities | Read all about leaving your money where it is |
| Flexible income (drawdown) | Lump sums | Guaranteed income for life (annuity) | Leave it where it is |
|---|---|---|---|
| You can take up to 25%* of your pot as tax-free cash, either before your regular income starts or as part of each income payment. | You can take up to 25%* of your pot as tax-free cash, either before any other withdrawals or as part of each payment. | You can take up to 25%* of your pot as a tax-free cash lump sum before you buy your annuity. | You can take up to 25%* of your pot as a tax-free cash lump sum and leave the rest invested. |
* Up to a limit of £268,275.
| Flexible income (drawdown) | Lump sums | Guaranteed income for life (annuity) | Leave it where it is |
|---|---|---|---|
| Withdrawals above your 25% tax-free limit are taxed as income. | Withdrawals above your 25% tax-free limit are taxed as income. | The regular payments from your annuity are taxed as income. | Money that is left in your pension can grow free of tax. |
Use our Pension tax calculator to see how much cash you might have to pay
| Flexible income (drawdown) | Lump sums | Guaranteed income for life (annuity) | Leave it where it is |
|---|---|---|---|
| You will be able to adjust the income you receive as your circumstances change. | A single large withdrawal could move you into a different tax bracket. | Your income will be based on your age, the state of your health and the amount you use to buy the annuity. | Delaying withdrawals from your pension pot may mean you can take a higher income in the future. |
| The part of your pension pot you haven’t taken as income will stay invested and could grow, but it could also go down in value. | Any pension savings you haven’t withdrawn will stay invested and could grow, but they could also go down in value. | You can choose an annuity that offers inflation protection, a guaranteed minimum payment or a spouse’s pension. | Your pension pot could grow, but it could also go down in value. |
| See how flexible income works | Find out about taking lump sums | Explore annuities | Read all about leaving your money where it is |
| Flexible income (drawdown) | Lump sums | Guaranteed income for life (annuity) | Leave it where it is |
|---|---|---|---|
| If the income you take is too high, you may not have enough left to live on in retirement. | If you withdraw too much, you may not have enough left to live on in retirement. | Your annuity guarantees to pay you an income for the rest of your life. | If your pension investments perform poorly, you may have less than you hoped for when you decide to take an income. |
| Flexible income (drawdown) | Lump sums | Guaranteed income for life (annuity) | Leave it where it is |
|---|---|---|---|
| You can leave any pension savings you don’t take as income to your family, beneficiaries or charities. If you die after you’re 75, they may have to pay tax on the money. | You can leave any pension savings you don’t withdraw to your family, beneficiaries or charities. If you die after you’re 75, they may have to pay tax on the money. | Depending on the type of annuity you choose, there could be a pay-out or a spouse’s income after your death. If you die after you’re 75, the money may be taxable. | You can leave any money that is still in your pension to your family, beneficiaries or charities. If you die after you’re 75, they may have to pay tax on the money. |
Find out more about nominating your beneficiaries here.
No. The BNP Paribas Pension Plan is not a final salary or ‘defined benefit’ (DB) arrangement. It is a ‘defined contribution’ (DC) plan. If you have a final salary/DB plan, you can find out more about those types of retirement savings by visiting https://www.fidelity.co.uk/what-is-a-final-salary-pension/
Some points to bear in mind
- If you withdraw any money from your pension over the amount you can take tax-free, it will affect the amount you can carrying on saving in pension plans with the benefit of tax relief. This will go down from £60,000 to £10,000 and is known as the money purchase annual allowance.
- If your pension savings are worth less than £10,000, you may be able to withdraw the whole amount as a single lump sum, including 25% tax-free. This is known as a ‘small pot’ withdrawal, and it will not count towards your money purchase annual allowance or your lifetime allowance.
- Many pensions allow you, from the age of 55 (57 from 2028), to take up to 25% of your savings as tax-free cash. Your 25% tax-free cash entitlement is subject to a limit of £268,275.
Find out more about pension allowance and tax benefits.
Need some help?
Fidelity Workplace Investing Service Centre
If you’re unsure about any of your retirement income options and would like to find out more about your Fidelity pension, call our Workplace Investing Service Centre on 0800 3 68 68 68. Lines open 8am - 6pm on all UK business days.
Pension Wise
The government’s Pension Wise service offers free, impartial guidance to help you understand your options at retirement. Guidance is available at moneyhelper.org.uk or over the phone. Call 0800 130 3944.
Visit Pension Wise