How to withdraw from your Royal London pension - UK guide

If you’re approaching retirement, you might be starting to think about how you’ll access your pension pot.

You’ll need to make some decisions about how you want to manage your retirement income, and you’ll also need to understand the practicalities of withdrawing from your pension - here in the UK, or overseas if you have plans to retire abroad.

If you have a pension with Royal London, one of the UK’s largest pensions companies, read on.

We’ve put together a helpful guide on how to withdraw from your Royal London pension. This includes rules and tax considerations, steps to access your money and everything else you need to know.

Considering retiring abroad? You’ll need to use a solution like Wise to make sure you can receive your pension without losing out on currency exchange.

Open a Wise account and you’ll be able to receive your pension in GBP and convert to the local currency at the mid-market rate for only a small fee* - making your retirement pot go a little further.

Withdrawing money from a Royal London pension

Royal London offers a few different ways to access your pension pot once you reach retirement age.

The options for defined contribution pensions include the following:¹

• Buy an annuity - this is where you take 25% of your pension in cash (due to the tax-free benefits - more on this later) and use the remaining 75% to buy a contract which provides a guaranteed regular income for life.
• Income drawdown - this is where you put your pension into ‘drawdown’, so you can have an income stream while keeping the rest of the money invested (instead of having it all tied up with an annuity).
• Withdraw a single or several cash lump sums - this is where you’ll take out cash as and when you need it. This is what we’ll mainly be focusing on here in this guide.

You can also choose a mix of different options, depending on your needs, retirement goals and the conditions of your pension.

Before you make any big decisions on your pension, it’s recommended to seek professional financial advice. You can also get information and guidance on the government’s Money Helper website.

Can I withdraw my pension early?

With Royal London, the minimum age you can withdraw your pension is 55 years old.²

However, this is increasing to 57 in April 2028, when changes to minimum pension age rules come into effect in the UK.²

You won’t be able to cash in your pension earlier than this, unless in exceptional circumstances - such as poor health preventing you from carrying on working.

This is the case for many pension schemes, and even if you do find a way to take your pension pot out early, you could face an eye-watering tax bill. HMRC may consider this an unauthorised payment, outside of the tax rules, which means a tax charge of 55%.³

Can I withdraw my UK pension with Royal London abroad?

Yes, you should be able to access your UK pension with Royal London even if you move permanently to another country.

However, you may find that living outside the UK when you come to take your pension benefits can limit your options. Any benefits are likely to be a continuation of your existing plan, rather than any new benefits. And there may be restrictions on having your pension paid into an overseas bank account.⁴

It’s best to contact Royal London to find out your options and to get information on how moving abroad will affect your pension benefits.

Is my Royal London pension eligible for transfer to other countries?

Royal London pensions can also be transferred to other countries, but only under certain conditions.

The main one is that your new pension provider in the country you’ve moved to must be a qualifying recognised overseas pension scheme (QROPS).⁵

This is a list of government-approved pension schemes which meet certain criteria. You can check the current QROPS list here on the GOV.UK website, but remember that it is updated regularly. This means you’ll need to check back shortly before you plan to start your pension transfer.

There’s also a chance that you might have to pay an overseas transfer charge of 25%, depending where the overseas scheme is based and whether you’ve exceeded your personal allowance for pension transfers.⁶

Overseas pension transfers can be really complex, so it’s strongly recommended to get professional advice before starting the process.

How to withdraw money from your Royal London pension

Now, let’s take a look at the actual steps involved in withdrawing money from your Royal London pension.

Here are the main steps you’ll need to follow:⁷

1. Work out the tax you’ll need to pay on the amount you plan to withdraw - we’ll look at this next, but Royal London also has a handy lump sum calculator tool you can use.
2. Get professional financial advice, so you understand all the options available and can choose the best one for you
3. Call Royal London on 0345 602 1885 to start the process. They’ll walk you through the steps involved in withdrawing your lump sum.

You can view and manage many aspects of your pension on the Royal London website and mobile app. But to withdraw a lump sum, you may have to call and speak to a customer service advisor.

Things to consider

Before withdrawing your pension pot from Royal London, there are a few key things to consider:

• Whether you’ll have enough regular income in retirement if you withdraw your pension as a lump sum
• There are no fees from Royal London, but income tax will be due on the amount you withdraw - we’ll look at this in more detail next, but you’ll need to make sure you can afford to pay it.
• If you’re still contributing to your pension, taking out more than 25% of it as a lump sum may restrict the amount you can pay into it every year.

If you need the money urgently, you will also need to contact Royal London to find out how long it typically takes for lump sum payments to arrive.

Tax considerations of withdrawing from Royal London pension

One of the most crucial and unfortunately, complex, parts of managing your pension is getting to grips with the tax implications.

When it comes to withdrawals, 25% of the total will usually be tax-free. You’ll then pay income tax on the remaining 75% - it will be classed as part of your income for the year.⁸

There’s also a lump sum allowance to take into account. Currently set at £268,275, this is the total amount you can withdraw tax-free across all of the pension schemes you hold.⁸

So if you’re taking out a large lump sum, this could mean a hefty tax bill. This is why it's so important to seek financial or tax advice to make sure you understand your obligations.

You may also have tax charges to pay when transferring pensions abroad, depending on where your overseas provider is based and whether you’ve exceeded your personal allowance. Again, it’s best to seek advice from an expert.

Save money on pension withdrawals with Wise

After reading this, you should have a better idea of how to withdraw from your Royal London pension.

You may even be able to receive your pension benefits if you’re living outside the UK, which is ideal if you’re planning to retire abroad.

But you’ll also need to think about how you’ll manage your money across international borders - without poor exchange rates and high fees eating into your retirement fund.

Wise offers the ideal solution for UK expats and retirees living abroad.

You can use your multi-currency Wise account to withdraw from your UK pension while living overseas, and receive your UK state pension too.

You can receive it in GBP, then convert it to the local currency using the mid-market exchange rate. There’s only a small fee* to convert currency, and you can do everything online.

There’s even a dedicated service for large amount transfers, helping you send pension funds between the UK and overseas securely. And if you’re sending more than £20,000 (or the currency equivalent), you’ll benefit from discounted fees too.

Get started with Wise

Sources used in this article:

1. Royal London - accessing your pension savings
2. Royal London - pensions explained
3. Money Helper - When can you take money from a pension?
4. Royal London - payment of pension overseas
5. Royal London - overseas transfers
6. GOV.UK - transferring your pension
7. Royal London - taking a pension lump sum
8. GOV.UK - tax on private pension contributions

Sources last checked on date: 13-Jun-2025