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How can I take some of my retirement pot as cash?

Key points:

  • This article will explain key facts to consider before making cash withdrawals and how to make cash withdrawals from your retirement pot.
  • From the age of 55 you could choose to take part of your retirement pot as cash while continuing to save with Nest.
  • A quarter of the amount you take as cash will usually be tax-free. The rest will be taxed as part of your income for the year when you get the money.
  • Rules around making the withdrawals:
    1. you must have at least £3,000 in your Nest pot
    2. you can make one withdrawal every calendar month
    3. minimum amount you can take at a time is £200
    4. you'll need to leave at least £2,000 or more in your pot to be able to make withdrawals every month.

What do I need to know before making cash withdrawals?

  • You may want to first find out all your options and decide the option that is right for you. 
  • Our Taking your money out of NEST (PDF) has a lot of information that will help you.
  • If you are over 50 years of age, you can get free impartial guidance from Pension Wise.
  • You have a standard life time allowance of £1,055,000. If the value of your Nest retirement pot and any other benefits you have taken from other pension pots in the past put together exceeds the life time allowance, then you will need to inform Nest.

How do I start making cash withdrawals?

  • You can login to your Nest account to make a withdrawal.
  • Alternatively, you could call us on 0300 020 0090 to get started. 
  • Nest will need your bank details to process your request. There could be three scenarios to this, depending on whether you’ve provided us payment details in the past or not:
  1. Your account already shows the correct bank details - for example you have made previous withdrawals. You can verify them during the process. 
  2. Your account does not show any bank details. You'll need to enter them and click ‘Submit’. 
  3. The bank account details shown in your account need to be changed. You can click 'Change bank details' and enter your new account details.

How long does it take to get the cash in my bank account?

  • To help protect your Nest pot. Once you have submitted your request, Nest sends your details over a secure link to Experian to help check your identity. This won't affect your credit rating or any future credit searches.
  • Sometimes we may need to ask you for proof of identification and/or bank account ownership to verify your request. This is also to ensure your pot is protected and only the rightful owner gets access to the cash. 
  • Once we've received the required information, or if we don't need any further details, you should receive the payment within 5 - 10 working days. Your Nest account will remain open and you can continue contributing to it.

There are some screenshots below to help you in the process.

What happens after I start making cash withdrawals?

  • Your Nest account will stay open and you can continue to save with us.
  • Once you’ve taken money from your Nest account you won't be able to pay more than £4,000 in the current tax year into any defined contribution pension scheme without paying extra tax.
  • We’ll send you a P60 statement after the tax year is completed if you’ve taken some of your pot as cash and your account is open with Nest.
  • If you’ve taken some of your pot as cash and later claimed your full Nest retirement pot or transferred out before P60 is issued at the end of the tax year, then we’ll send you both P60 and P45 statement.

Screenshots of the process

After logging in click ‘Take your money out’ on your home page.

Information about lifetime allowance:

  • If you are going to exceed your life time allowance of £1.055 million - Select Yes, please follow the instructions and contact us by phone 
  • If you are not exceeding your life time allowance – Select No and follow instructions on the screen

Click ‘Your options for taking money out’ to select one of the options to take your money out of Nest.

Click ‘Explore this option’ to see the options under Taking cash from your retirement pot.

Click ‘Take some of your pot’.

Enter the amount you want to withdraw and click ‘Calculate’. This will show you the estimated amount you’ll receive in your bank account after deducting tax. Click ‘Continue’ to proceed and confirm the bank account details.

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