Answers · UK 2025/26
Can I take 25 percent tax-free pension at 55?
You can normally take 25% of your defined-contribution pension pot tax-free from the Normal Minimum Pension Age — currently 55, rising to 57 from 6 April 2028. The lump sum is capped at £268,275 across all your pots (the Lump Sum Allowance). The remaining 75% is taxable as income when drawn.
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From age 55 you can crystallise a DC pension and access tax-free cash, called the Pension Commencement Lump Sum (PCLS). Methods: (1) take the full 25% as a single lump sum and move the rest into drawdown or annuity; (2) take Uncrystallised Funds Pension Lump Sums (UFPLS) — each withdrawal is 25% tax-free and 75% taxable; (3) phased drawdown — crystallise small slices regularly, taking 25% tax-free from each. From 6 April 2028 the minimum age rises to 57 (protections for certain pre-2006 schemes exist). The £268,275 Lump Sum Allowance is the lifetime cap on tax-free cash across all pensions (with separate protections for those who registered with HMRC under previous regimes). The 75% taxable portion is added to other taxable income that year, so taking a big slice can push you into 40% or 45% bands — drip-feeding is usually more tax-efficient. Triggering flexible income from a DC pot reduces your Money Purchase Annual Allowance to £10,000 (from £60,000), capping future pension contributions.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.