Pension Wise: free pension guidance in the UK explained

What is Pension Wise and how much does it cost?

Pension Wise is a free, impartial and government-backed service from MoneyHelper that explains your pension options. The guidance is free, and MoneyHelper describes it as "neutral, unbiased". The aim is to help you understand how and when you can access your pension pot before you make any decisions.

Who is Pension Wise for?

The service is for people aged 50 or over with a UK-based defined contribution pension pot, whether personal or workplace. According to MoneyHelper, you can use it if you:

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• are aged 50 or over with a defined contribution pension pot;
• have inherited a pension pot;
• can take your pension early due to ill health.

Pot size does not matter. The service usually is not for people under 50 or those with only a defined benefit pension — though MoneyHelper can still help them in other ways.

How does an appointment work and how long is it?

You can go through the guidance online at your own pace or by phone. A phone appointment takes about 60 minutes. It explains how each option for taking money from your pension works, the tax you could pay, and how to spot pension scams.

Which options for taking a pension are covered?

MoneyHelper lists the main options for a defined contribution pot:

• leave the money invested and take income or lump sums as needed (drawdown);
• buy an annuity for a guaranteed income, for life or a fixed term;
• take several separate lump sums, with 25% of each lump sum tax-free;
• take the whole pot in one go — up to 25% tax-free, the rest taxed as income.

You can usually access a defined contribution pension from age 55 (rising to 57 from April 2028), and you can take up to 25% tax-free. The total tax-free cash from all your pensions is capped by the lump sum allowance, which is 268,275 pounds for most people. You can combine options and use different approaches for different pensions.

How do you book an appointment?

You can book free of charge by phoning 0800 011 3797 or by using the webchat. Lines are open Monday to Friday, 9am to 5pm, and closed on bank holidays. If you prefer, you can go through the guidance online by yourself, at your own pace, without booking a call.

ONLYWAY NEWS notes that Pension Wise gives guidance, not personal investment advice; for a personal recommendation, speak to a regulated financial adviser. The service also explains how to spot pension scams, which is a key part of the appointment.