How It Works
To take your whole pension pot as cash, you simply close your pension pot and withdraw it all as cash. 25% is usually tax-free and the remaining 75% is taxable. If you have more than one pension pot, you can take the whole amount from one pot and continue to pay into the others.
Things To Consider
Do you have enough money to last for your whole retirement - this option does not provide a regular income.
As 75% of the withdrawal is taxable, your tax rate may increase once the sum is added to any existing income.
Taking a large sum of cash may reduce any benefit entitlement you may have now or later in life - for example to assist with long term care needs.
What Happens When I Die?
Any cash remaining from your pension pot will be classed as your part of your estate for Inheritance Tax purposes. Whereas, any remaining cash from your pension pot would not normally be liable for Inheritance Tax and would be passed tax-free to your beneficiaries if you should die before age 75.