Use our FREE pension tax calculator
It is possible to withdraw your entire pension pot in one lump sum, should you require a large injection of cash. However, this sum could be severely taxed – meaning that it is hugely important that due consideration is paid before committing to this process.
The first 25% of this withdrawn sum will be completely tax-free, however the remaining 75% will be taxed at your highest tax rate (by taking the rest of your income into account). Naturally this could have significant impact upon the total sum you receive, with long lasting effects upon your financial situation in retirement.
As you won’t receive a regular income from your pension, should you withdraw it in one fell swoop, it is important to discuss this option with family and beneficiaries before committing. Additionally, discussing this option with the trained Age Partnership financial advisors can help you understand the full ramifications of this option.
Additional things to consider are the finality of the option, and the reduction in benefits entitlement. Regarding the latter, having a larger sum of money at your disposal could inhibit your access to any benefits you currently receive. In the long-term, this could have a huge effect upon the total sum of money you receive in retirement.
To help offer a basic understanding of how withdrawing your entire pension in one lump sum works, we have created the pension tax calculator. This will provide a basic insight into how much money you could expect to receive when you commit to the option.
Simply fill in your details below to use our free tax calculator to see how tax you'll pay if you withdraw your entire pension fund in one lump sum.
If you believe that withdrawing your entire pension may be the most suitable option for you and your situation, it is important to chat to an expert financial advisor before making the commitment. The Age Partnership team are available 24/7 to discuss any concerns or queries you may have about withdrawing your entire pension.