Transcript

Your pension pot is your money. So if you wanted to just take the whole lot right now you can, as long as you're 55 or over. But if you do, there are quite a few things to think about. Firstly, you'll lose a fair chunk of it in tax because you can only take 25% tax free. You'll have to pay tax on the rest, and of course, the amount could easily put you in a higher tax bracket. It may be more tax efficient to take the money in smaller lump sums over a few years.

If you're claiming any means tested benefits such as pension credit, housing benefit, or council tax support, then a large lump sum could mean you're not entitled to them anymore. Also, if you withdraw more than the tax-free part of your pension, there is a limit on new contributions into your pension pot. Beyond this limit, you're liable to tax. And possibly the most important question of all, will you have enough money to last for the rest of your life, and what will you do if it runs out?