How much of a pension can you take as a tax-free lump sum?

When it can be taken

Most personal and workplace pensions can be drawn from 55, the minimum pension age, which rises to 57 on 6 April 2028.

All at once, or a piece at a time

The tax-free part of a pension pot can come out in either of these ways:

• All at once, as a lump sum when you start drawing on the pot. The rest stays invested to draw on later, or buys an income for life.
• A piece at a time. Each sum taken is 25% tax-free, and the rest of that sum is taxed as income.

Either way, every tax-free sum counts against the same lump sum allowance.

Above the allowance

A lump sum over the allowance is taxed as income. Someone holding a protected allowance from earlier rules may be able to take more tax-free.

How Landfall handles it

Part of a defined contribution pension can normally be taken free of tax. How you take it changes the shape of your tax bill rather than the size of your pot, and Landfall offers the three routes people actually use. How each route works, in more detail.