Call for a Free Quote 0800 652 1316
Request a call back

We'll be happy to call you when it's convenient for you

Send request

Taking your tax-free cash lump sum

You can take up to 25% as a tax-free cash lump sum and use the rest of your pension savings to provide a taxable income. If you take less than 25% at the start, you can leave the balance invested, potentially growing in value and take the balance whenever you like. This differs from an annuity in that if you take less than 25%, your entitlement to the balance is lost once the annuity is set up.

You can take as much or as little as you like

From April 2015, you can draw whatever amount you want from your pension savings as regular income or ad hoc payments. You can alter the income anytime you like, and choose when you take it. You can also stop and start it as you wish.

This gives you more choice and control over your own money, but less certainty as the ability to continue taking future income will depend on the performance of your investments.

The income you draw down is taxed at your highest rate of marginal tax. This means if you draw down enough income to push you into a higher tax bracket, you’ll pay higher rate tax on that element of your income. However, If you plan your income withdrawals carefully, you may be able to minimise your tax liability. Take too much, though, and you may end up paying more tax than you might be happy to pay. You also run the risk of reducing the size of your pension fund, and therefore its ability to pay you the income you need in the future.

 

 

 

What's next?

Retirement Options

Annuity calculator

Keep up-to-date

Follow us on

Get in touch

Call for a Free Quote0800 652 1316or request a call back