Tax treatment depends on your circumstances and is subject to change

Pension lump sums

Taking money from your pension as and when you need it.

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Pension lump sums: explained

From 55, with the right kind of pension, you can take money from it as and when you want. If you take this approach, rather than drawing a regular income, it is called taking lump sums. And the first 25% you take is generally tax free, either as one lump sum or as several smaller amounts.

That’s why it makes sense to talk with a financial adviser.

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Releasing pension money early isn’t right for everyone as it will leave you worse off in retirement.

Be tax-smart with your pension savings

How much pension money you withdraw early can have a big impact on your tax bill and on the size of your future pot.

Let’s take a look at John and Sarah. Both have a £70,000 pension at age 55 and pay the basic rate of tax. They both need £17,500 to cover a financial situation. Sarah takes just her tax-free cash allowance to achieve this. While John decides to take £40,000, putting the balance in his bank account for a rainy day.

¹ Tax treatment depends on your individual circumstances and may be subject to change.

How to manage your lump sums

As you can see from the example of John and Sarah, the amount of money you withdraw from your pension can have a big impact on the tax you'll pay. And if John decided to take more lump sums between 55 and 65 his tax bill could be much higher, his pension a lot smaller and the interest he receives from his bank account minimal. The bottom line is: the more you can keep in your pot, the more money you should have for retirement.

That’s why it makes sense to have a chat with a regulated financial adviser before making any final decisions about your pension.

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Get started with no obligation

We can check to see if pension lump sums are right for you. Our initial investigation into your pension will not cost you a penny and any advice charges are confirmed in writing before you have to make a decision to proceed. This means you can walk away better informed with nothing to pay.

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How it works in 3 easy steps

With our no obligation pension check discover if pension lump sums are right for you.

Your permission

Complete and return a simple form giving us your permission to check your pension.

We analyse

Our team gathers and analyses all the information we need about you and your pension.

Your decision

We’ll send you a report, clearly stating what we think you should do. The choice is then yours.

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This website is aimed solely at UK investors subject to the UK tax regime.

Pension Access is a trading name of Harbour Rock Capital Limited which is registered in England & Wales as a Limited Company, No. 10290349. Authorised and regulated by the Financial Conduct Authority, No. 754580. Registered Offices: Affinity House, Beaufort Court, Sir Thomas Longley Road, Rochester, Kent, ME2 4FD. Telephone: 0800 009 3388. Email: pensionaccess@harbourrockcapital.co.uk

Pension lump sums

Pension lump sums: explained

Be tax-smart with your pension savings

How to manage your lump sums

Get started with no obligation

How it works in 3 easy steps

Your permission

We analyse

Your decision

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