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If you want to access your 25% tax-free cash now, you can. You’ll also need to make some decisions about what you want to do with the remaining 75%, unless you want to cash in your pension savings completely.
If you don’t want to cash in your pension savings completely, you have two options;
- Buy a regular income with it (also known as an annuity)
- Keep it invested for now, and make a decision on what you’d like to do with it later (known as moving into ‘drawdown’)
The maximum tax-free cash you can take from all your pensions is subject to the Lump Sum Allowance of £268,275. This allowance may be higher if you have previously applied for pension protection.
Keeping the rest of your money invested for now
There are some important things to think about when it comes to what to do with your pension savings once you’ve taken your tax free cash.
You’ll need to consider how long you want to leave the rest of your savings invested for, and what you might want to do with them in the future. This may include starting to draw a flexible income from your pension savings either now or at some point in the future.
The next few pages will guide you through those things to think about and help you make your decision. You’ll have an opportunity to look at what you might need in retirement, how long you might need your money to last, and what might be the best investment strategy for you as result.
If you’d like to take your tax-free cash and look at options for what you can do with the rest, you can do that here.