Answers · UK 2025/26

How much tax-free cash can I take from my pension?

You can usually take 25% of your defined contribution pension pot as tax-free cash for 2026/27, up to a lifetime cap of £268,275. The rest is taxed as income when you withdraw it. You can normally access this from age 55 (rising to 57 in 2028).

Last updated: 1 June 2026Last reviewed: 1 June 2026How we verify

Full answer

For 2026/27 you can normally take 25% of a defined contribution pension pot as a tax-free lump sum, known as the Pension Commencement Lump Sum, subject to a lifetime limit of £268,275 (the Lump Sum Allowance). You can usually access pension savings from age 55, rising to 57 in April 2028. The remaining 75% is taxable as income at your marginal rate when withdrawn — either as a one-off, through drawdown, or as an annuity. Worked example: with a £200,000 pot you could take £50,000 tax-free; the other £150,000 would be taxed as income as you draw it. You do not have to take all the tax-free cash at once — with flexi-access drawdown you can take 25% of each chunk you crystallise tax-free. Beware the "emergency tax" trap: the first large withdrawal is often taxed on a Month 1 basis and over-deducted, requiring a reclaim from HMRC. Defined benefit (final salary) schemes calculate tax-free cash differently, often via a commutation factor. The rules are UK-wide, so they apply identically in Scotland, though the tax on the taxable portion follows Scottish rates. Use the Pension calculator to model how much tax-free cash your pot could provide.