Taking money from your pension

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.

Minimum pension age is 55, rising to 57 on 6 April 2028.

• A quarter of each withdrawal tax-free. Every withdrawal comes out part tax-free and part taxable, for as long as the entitlement lasts.
• Tax-free cash first, as needed. The tax-free part comes out first, and withdrawals become fully taxable once it has gone.
• Tax-free cash all at once, when first drawn. Each pot’s tax-free part comes out in the first year the plan draws from it, and the rest moves into drawdown.

You can also plan a set amount of tax-free cash in a year you choose, which is what people usually do when the money is for something specific. The DC pension withdrawal summary card sums up each person’s withdrawals, and the DC pensions tab lists every year: what came out tax-free and taxable, the tax-free cash so far, and what the pot had left.