Pension fund withdrawal options

tiemadmin • 17 October 2024

Most personal pensions set a minimum age at which you can start withdrawing money, typically not before age 55. Some pension benefits can be taken tax-free. Generally, you can withdraw 25% of your pension pot as a tax-free lump sum, with a maximum of £268,275. If you have protected allowances, the amount you can take tax-free, as well as your overall tax-free limit, may be higher.

After making a tax-free withdrawal, you usually have up to 6 months to decide how to take the remaining 75% of your pension fund which will typically be taxed. The options for withdrawing the rest of your pension include:

  • Taking all or part of it as cash.
  • Purchasing an annuity for a guaranteed lifetime income.
  • Investing it for a flexible, adjustable income (known as 'flexi-access drawdown').

It’s important to understand the tax implications of receiving pension income. Aside from the tax-free benefits, pension income is considered earned income and subject to Income Tax under the standard rules. Income tax is also due on the State Pension, employment or self-employment earnings, and any other taxable income.

< Older Post

Newer Post >

Budgeting and forecasting in a period of lower confidence

by tiemadmin • 9 February 2026
Many business owners are entering the new year with a sense of caution. Confidence across the UK business community has softened, driven by continued cost pressures, uncertainty over tax policy and The post Budgeting and forecasting in a period of lower confidence appeared first on Feldon Accountancy.

Business rates support and cash flow for hospitality businesses

by tiemadmin • 9 February 2026
Hospitality businesses continue to operate in a challenging environment. Rising wage costs, energy prices and supply chain pressures have all placed strain on margins. Against this backdrop, recent The post Business rates support and cash flow for hospitality businesses appeared first on Feldon Accountancy.

Eligibility for Business Asset Disposal Relief

by tiemadmin • 5 February 2026
Business Asset Disposal Relief (BADR) can significantly reduce the Capital Gains Tax due when selling a business or shares, but with higher rates coming from April 2026, timing and eligibility matter The post Eligibility for Business Asset Disposal Relief appeared first on Feldon Accountancy.