Taking 25% tax free cash
You can take 25% of your pensions savings as tax-free cash as soon as you reach the scheme’s retirement age. You are free to use this money any way you like.
The 2015 pension freedoms allow you to take an additional amount or a series of additional amounts as cash but these withdrawals will be subject to income tax at your marginal rate.
Read more about taking lump sums from your pension pot.
You can also withdraw the full amount as cash. Again, tax will be payable.
Find out more…
How can I avoid a large tax bill? -
If you are thinking of totally withdrawing your pension fund, you might want to take into account any other earnings that you will have in the tax year, as the pension fund will be added to your earned income for tax purposes.
Everyone has a personal tax allowance of earnings before they pay tax, which might provide a way to draw pension funds in stages over a number of years, however any tax planning should be discussed with a financial adviser or tax expert beforehand.