{"id":11294,"date":"2025-10-22T12:41:17","date_gmt":"2025-10-22T11:41:17","guid":{"rendered":"https:\/\/sbwm.uk\/?p=11294"},"modified":"2025-10-22T12:41:18","modified_gmt":"2025-10-22T11:41:18","slug":"to-draw-or-not-to-draw-taking-cash-out-of-your-pension","status":"publish","type":"post","link":"https:\/\/sbwm.uk\/v3\/news\/to-draw-or-not-to-draw-taking-cash-out-of-your-pension\/","title":{"rendered":"To draw or not to draw \u2013taking cash out of your pension\u00a0"},"content":{"rendered":"<!-- wp:themify-builder\/canvas \/-->\n\n<p><b>Are you considering drawing a lump sum from your pension before the Autumn Budget?<\/b><\/p>\n<p>One of the major tax benefits of saving through pensions is that, generally, 25% of the pension\u2019s value can be drawn as a lump sum, free of income tax, up to a maximum of \u00a3268,275. From the point of view of the law, that cash is defined as a pension commencement lump sum (PCLS) which, as the name suggests, must be taken at the same time pension income starts to be drawn. In practice, the level of regular income taken can be nil and the lump sum (and accompanying income) may be drawn in stages; there is no statutory requirement for your pension pot to be converted to cash and income all at once.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>The future of the PCLS is a staple of pre-Budget rumours. Forty years ago, one of Chancellor Rachel Reeves\u2019 distant predecessors, Nigel Lawson, teased about \u201cthe anomalous but much-loved tax-free lump sum\u201d in his Budget speech, but made no changes. In the run-up to the Autumn 2024 Budget, the fate of the PCLS was subject to more than usual speculation, given that substantial extra revenue needed to be found. However, Reeves also left the PCLS unchanged. <span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>A recent response to a Freedom of Information request revealed the public has been taking the risk of an attack on the PCLS seriously:<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<ul>\n<li>In the six months to March 2025, over \u00a310.4 billion was drawn as PCLS, more than a third above the level of the previous six months and nearly three-quarters higher than the total drawn in the half year to March 2024.<\/li>\n<li>Over the entire 2024\/25 financial year, the amount of PCLS withdrawn was 61% up on 2023\/24. However, the number of savers making those withdrawals rose by only 29%, suggesting that the average PCLS taken was almost a quarter larger.<\/li>\n<\/ul>\n<p>There is some evidence after last year\u2019s Budget that some of those taking their PCLS regretted their actions. HMRC had to remind pension providers that \u201cThe payment of a tax-free lump sum cannot be undone.\u201d<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>At this stage, nobody knows what the Budget will bring (or take away), but if you are thinking of drawing a PCLS now, make sure you also take advice before reaching a final decision.<span class=\"Apple-converted-space\"> \u00a0<\/span><\/p>\n<p><b><i>Tax treatment varies according to individual circumstances and is subject to change. The Financial Conduct Authority does not regulate tax advice.<\/i><\/b><\/p>","protected":false},"excerpt":{"rendered":"<p>Are you considering drawing a lump sum from your pension before the Autumn Budget? One of the major tax benefits of saving through pensions is that, generally, 25% of the pension\u2019s value can be drawn as a lump sum, free of income tax, up to a maximum of \u00a3268,275. From the point of view of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":11295,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wds_primary_category":160,"footnotes":""},"categories":[160],"tags":[],"class_list":["post-11294","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"builder_content":"","_links":{"self":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/posts\/11294","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/comments?post=11294"}],"version-history":[{"count":0,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/posts\/11294\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/media\/11295"}],"wp:attachment":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/media?parent=11294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/categories?post=11294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/tags?post=11294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}