Updated: November 18, 2019

Frozen Pension Options

There are a range of options available if you have a frozen pension. Find out what they are and how to choose the right one in our guide

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Tony Stevens

Author: Tony Stevens - Finance Expert

Updated: November 18, 2019

Many customers are now coming to us wanting to know what their options for a frozen pension are, and some of them even have multiple pensions of this kind.

Frozen pensions are more accurately called, dormant pensions, and we’ve put together this guide to outline what possible options you could have.

We’ll cover topics such as:

What are my frozen pension options?

Some people have one, maybe two, dormant pensions but a lot of people (often due to moving jobs a few times) have multiple frozen pensions and need to know their options.

With all pensions, there is a magic age which defines what options you have, and that age is 55.

If you are approaching 54 and about to turn 55, currently 55 or over then the pension world is your oyster.

The decision is do you want the pot to have the potential to grow? Do you want an income from the pension now? Do you want a lump sum now and leave the rest for later?

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What are my options for a frozen pension if under 55?

When under 55 years of age you are unable to really access the funds without paying penalties and hefty tax charges, likely to be over 50%.

If you have other pension plans running you could transfer the pensions across – there could be admin charges for doing this so it’s always best to speak with both the frozen pension provider and the provider of your current pension to see what charges are applicable.

Even if you have pension plans running, you would still be able to create a brand new pension plan to transfer your frozen accounts into and if this is something you’re considering you should speak with one of the pension experts we work with. Call Online Money Advisor today on 0808 189 0463 or arrange a free, no-obligation chat with one of the expert advisors we work with.

What are my frozen personal pension options when 55 and over?

Once you are at the age of 55 or over you suddenly have more frozen pension options.

You are now able to get tax relief on a 25% lump sum – this is where you move the frozen pension into what is known as ‘drawdown’ and it lets you keep the funds you have invested, whilst having the flexibility to gain access. You can withdraw as much as you like but would get taxed at your tax rate on anything over 25% that you withdraw.

You can purchase an annuity giving you a guaranteed monthly income for life or you could mix and match by taking a lump sum and investing the remainder into an annuity to get the best of both worlds.

Both of the above options are only available to you once you are 55 or older and if you want to access the funds in either a lump sum format, via a monthly income or both.

You do however still have the option of transferring any frozen pensions into a current active pension plan or alternatively setting up a completely new plan to amalgamate any frozen pensions you may have and keep its separate from the other you may have actively running.

Regardless of which option you like the sound of for your dormant pension, you should seek expert advice from a pension specialist like the ones we work with here at Online Money Advisor. The advisors we work with will be able to obtain all the relevant information and give you the best advice for your circumstances – now and into retirement.

Speak to a frozen pensions expert

If you have questions about frozen pensions and want to speak to an expert who can offer the right advice, call Online Money Advisor today on 0808 189 0463 or contact us online to arrange a free, no-obligation chat with one of the expert pensions advisors we work with. They are independent and have access to the entire market!

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We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in pensions Ask us a question and we'll get the best expert to help.

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Tony Stevens

Tony Stevens

Finance Expert

About the author

Tony has worked in a vastly diverse array of areas in the pensions industry for over 20 years. Tony regularly writes for trade press, usually on topical and pensions pieces as well as acting as a judge at prestigious national events.

Tony is also a highly qualified Independent Financial Adviser in his own right. His mantra has always been “Hope for the best, but plan for the worst”, and believes that the biggest impact that an adviser can have on a client’s life journey is to take them on a journey from generally having little or no real idea of what their retirement will look like, to giving them the understanding of what their retirement looks like now, then helping them navigate a path to what they want their retirement to be.

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*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

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