Special features are usually listed in your original pension policy documents or the scheme rules. But they’re typically not explained on any annual statements you might have received. 

This means it can be easy to miss restrictions, conditions or guarantees that your pension might have. 

Before deciding to transfer or take money from your pension, always contact your provider or the scheme administrators and ask them to explain: 

• the benefits that apply to you 
• how you qualify for them – for example, waiting to take money after a certain date  
• if you’d lose any benefits by transferring your pension to a new provider. 

This is important to avoid giving up benefits you didn’t realise you had.  

For example, if a new provider does not offer all the features your scheme currently has, you’d lose those benefits by transferring your pension away.

How and when you can take your pension depends on the type you have. Some pensions have special rules or features that affect your options. 

There are two main types of pension: 

• defined contribution schemes, where the amount you get depends on how much is paid in, how well the investments perform and how you choose to take the money 
• defined benefit schemes, where you get a guaranteed regular retirement income based on your salary and how long you worked for that employer. 

But you might have a different variation, such as a: 

• Defined contribution pension with some income that’s guaranteed, often called a hybrid pension. 
• Retirement annuity contract where you might need to claim your own tax relief. These closed in 1988 but you might still have one you can pay into. 
• Buyout policy where an insurer runs your pension, usually so your employer can close their scheme down. This means it will typically work in the same way as your original pension.  

Your pension provider or scheme administrators will be able to explain the exact type you have.    

If your pension offers any guarantees or bonuses, these can be valuable. They’re also unlikely to be offered by other providers, so you could lose these benefits by transferring your pension elsewhere. 

Because of this, if your pension is worth over £30,000 and has certain guarantees, you might have to pay for financial advice before you can transfer it. 

This is where your pension will definitely pay a certain amount when you reach your scheme’s normal retirement age. For example, a lump sum, regular income or both. 

This is most common in defined benefit schemes, but some defined contribution pensions might include a type of guaranteed income.

If you have a defined contribution pension, you can usually choose how and when to take your money. One option is to convert some or all of your pension into a guaranteed income by buying an annuity. 

The amount of income you’ll get depends on the annuity rate a provider will give you at the time, which is based on things like your age, health and market interest rates. For example, an annuity rate of 5% would give you an annual income of £500 for every £10,000 you convert. 

But some pension schemes offer guaranteed annuity rates (GARs), which were usually set at the start of the policy. As annuity rates have generally fallen over time, a guaranteed annuity rate could offer you a higher income than you could get by shopping around today.  

Always check if your scheme offers a GAR and if there are any conditions to using it. For example, you might need to take the annuity at a specific age, buy it from the original provider or accept a particular type of annuity.   

If you have a defined benefit pension, your scheme might have a minimum amount it must pay if you contracted out of the Additional State Pension between: 

• 6 April 1978 and 5 April 1997 – called a Guaranteed Minimum Pension (GMP) 
• 6 April 1997 and 5 April 2016 – called Section 9(2B) rights. 

This is because contracting out meant your contribution to this part of the State Pension went into your private pension instead.  

To make sure you did not lose out, this guaranteed minimum amount is usually the same, or more than, the amount of State Pension you would have got if you did not contract out.

If you have a defined contribution pension, your money is invested so it should grow over time.  

There are usually no guarantees with investing, so the value of your pension can fall or rise until you take the money.  

But if your pension provider uses with-profits funds, this often means the value will not fall below the amount that’s been paid in. 

Instead, a bonus payment is added if the investments perform well. This is typically a few times a year but might include a final maturity bonus on a certain date. 

Always check how any bonuses work and when they will be applied. For example, if you transfer or take your pension before a bonus is applied, you’ll usually lose it.  

Your pension statement might also not show the true value of your pension if it does not include these bonuses. Always ask your provider to explain the rules to you.

Some pensions will guarantee to pay your dependants or other beneficiaries an income or lump sum after you die. These are called death benefits.

Pension rules have changed over time. If you joined your scheme a while ago, you might have kept some of the older, more generous terms. These are called protections. 

You could lose these protections if you transfer your pension to a new provider, so it's worth checking before you make any decisions. 

You can usually take up to 25% from each of your pensions without paying Income Tax, as long as it’s taken as lump sums and the total does not exceed the lump sum allowance (LSA) – currently £268,275 for most people. 

But some pension schemes have a protected tax-free cash amount, which could let you take more than 25% tax-free. 

Be aware that the more you take as a tax-free lump sum now, the less you'll have to provide your retirement income later.

The earliest you can usually take money from your pension is age 55 (rising to 57 from April 2028). This is called the normal minimum pension age (NMPA). 

But you might be able to take your pension earlier if: 

• you need to retire early due to poor health, or 
• your pension scheme has a protected NMPA that allows earlier access. 

From 6 April 2028, the NMPA rises to age 57. If you’re 55 or 56 when this happens, you might lose access to your pension until you turn 57 – even if you’ve already taken money. Check with your pension provider to understand how this affects you. 

For step-by-step help with pension transfers, see our guide Should I transfer or combine my pensions? 

For help with taking your pension, see How to take your pension: a step-by-step guide.

If you have a UK-based defined contribution pension, we also offer free Pension Wise appointments to help you understand the options for taking your money.

You can contact our pension specialists for free help and guidance – it does not matter what type of pension you have or how old you are.