Quick answers to 5 pension head-scratchers

Pensions often seem complex and shrouded in mystery, but they shouldn't be. We're here to simplify some of the most puzzling pension questions, providing clear, straightforward answers in plain English.

Our mission is simple: to break down the barriers around pensions, have real conversations, and give people the knowledge they need to take control of their retirement planning.

So, whether you have a workplace pension or a private pension, these insights are designed to help you make informed decisions about your financial future. Here’s our five most-asked questions about pensions:

1. When I decide to take my pension money, how long does it take to receive it – and what's the process?

The timing and process for receiving your pension can vary based on how you’ve decided to take your money. Generally, it could take from a few days to several weeks (usually around 4-5 weeks) for the money to arrive.

First, you'll need to get in touch with your pension provider and tell them that you wish to access your funds. Prepare for some paperwork, though! Your pension provider has a duty to check that your cash is safe from potential scams.

MoneyHelper – a free and impartial government-backed service – offers guidance on timeframes and support on what to do if you think it’s taking too long.

2. Once I've decided how to take my money, can I change my mind?

The short answer? No… but don’t worry, there’s ways to keep some flexibility. One option is income drawdown. It’s when you withdraw a portion of your cash while the rest of your pension stays invested – letting you tweak your income as you go.

Just keep in mind, certain decisions – like opting for an annuity, say – are pretty much set in stone. Want to dive into more flexible choices? MoneyHelper has guidance on what you can do with your pension pot.

Over 50? PensionWise, part of MoneyHelper, also offers free appointments and guidance on what’s available to you when it comes to taking out your pension.

3. Do I get taxed on my pension when I take it?

Yes, your pension withdrawals are subject to tax. The money is treated in the same way as income. How much you’ll get taxed depends on both the amount you withdraw, and your overall income for the year. For more information, head over to the Government’s website.

4. How do I find out where my pension is invested?

If you're part of your employer's workplace pension scheme, your contributions are typically invested in the scheme's default fund (unless you’ve opted for something else).

This default fund is pre-selected by your employer and is designed to balance risk and return. You can discover more about pension investment options on the MoneyHelper website.

5. Is there an app or website that can find all my pension pots?

No, not yet! However, you can start by gathering any old pension statements you may have stashed away in that drawer of junk…

If that doesn't help, the government's free Pension Tracing Service could help find contact details for your pension providers. While it can’t provide pension values or policy details, it’s a helpful tool for tracking down your pensions.

Pension Awareness Week is a great time to clear up the confusion around pensions and really get a grip on planning for your retirement. From the basics of managing your money, to figuring out exactly how much you’ll need to retire, we try to make it easy for you to get your head around.

Once you get the hang of how to access your pension, what your choices mean, and how taxes come into play, you'll hopefully feel way more confident about your future.