Unsecured Pension 

You can withdraw up to 25% of your fund tax-free and leave the remainder invested, growing free of capital gains tax.

There is no requirement for you to take any income, but if you do, there is a ceiling on how much to can take, which is broadly equivalent to a single life level annuity. If you are not ready to buy a lifetime annuity, you have the option, to buy:

• An unsecured pension using short-term annuities - w ith a short-term annuity, you use part of your pension fund to buy a fixed-term annuity lasting up to five years. You can choose your annuity options in much the same way as described above. In the meantime, the remainder of your fund continues to be invested.
• An unsecured pension using income withdrawal - with income withdrawal you can take a taxable income directly from your pension fund. This is also known as income drawdown or pension fund withdrawal . In the meantime, the remainder of your fund continues to be invested.     

With both of these approaches, the remaining fund stays invested to generate additional pension benefits at a later date, either as additional short-term annuity contracts, income withdrawal payments or through the purchase of a lifetime annuity contract.    

While invested, your fund is exposed to investment volatility, which means it can fall as well as rise, this in turn directly affects the income you can take. It is important to ensure that the level of income you are taking can be sustained by the fund. So, the amount withdrawn is reviewed on the anniversary of the initial withdrawal. In addition there is a statutory review every 5 years.    

If by age 75 you have not bought an annuity and have strong objections to buying one; you can no longer continue with income drawdown. You can however, enter into a similar arrangement known as an Alternatively Secured Pension, which must provide an income.      

Death While Receiving An Unsecured Pension  

• paid out as an unsecured pension fund lump sum death benefit, taxed at 35%. 
• used to provide any other dependant of the member (at the time of the member’s death) with either a secured or unsecured pension. 
• used to provide a dependants annuity or a dependants scheme pension