You should speak to your financial adviser before making any decision about what to do with your retirement savings.
Taking it as cash
You can take cash lump sums from your retirement savings in a number of different ways.
Understand your options
You can choose to draw some or all of your retirement savings as a cash lump sum.
The first 25% of any payment will be paid tax-free; the remaining 75% will be taxed at your marginal rate.
Depending on the other income you have, taking large sums of cash might push you into a higher income tax bracket – so you’d pay more tax.
If you’re unsure about how you’d be taxed by taking a full or partial withdrawal, we’d recommend talking to your financial adviser.
Retirement savings with a total value of £10,000 or less are referred to as ‘small pots’. You can cash in a maximum of three small pots as a single lump sum. The total value of each pot has to be taken in full and they can’t be taken as partial lump sums.
The first 25% or any lump sum will be paid tax-free, the remaining 75% will be taxed at your marginal rate.
When a small pot is cashed in, it won’t affect how much you can continue to pay into any other pension plans you have.