You can choose to take your full tax-free lump sum, usually up to 25%, and the rest when you need it.
If you move your pension into a drawdown product, your provider will pay the tax-free amount as cash and the rest will go into your drawdown pot and remain invested.
Anything in your drawdown pot will be treated as taxable income when you decide to take it.
- You can take the remaining 75% whenever you like. You can take it all at once or take little bits when you need it. It’s important to note that it’s taxable.
- Any money you haven’t taken will remain invested, which means it has the chance to grow. But, as with all investments, it could go down in value and you could get back less than you put in.
- If there’s any money left in your pension when you die then this can be left to your loved ones.
Learn more about taking tax-free money
Next steps
If you want to move your current pension to a drawdown product, or take your cash in stages, you’ll need to take financial advice. It’s possible that other pension providers may offer these options without the need to take advice. You may be charged for any advice you receive. You should shop around before making a final decision.