When you access your pension you can usually take 25% of the pot as tax-free cash. Enter your pension pot and the percentage you want to take to see your tax-free lump sum and the taxable amount left behind.
25% PCLS · 2026/27
From age 55 (rising to 57 in April 2028), you can normally take up to 25% of your defined-contribution pension pot as a tax-free lump sum — formally the Pension Commencement Lump Sum (PCLS). The remaining 75% stays invested and is taxed as income when you draw it, whether through drawdown, an annuity or further lump sums.
You don't have to take all your tax-free cash in one go. With flexi-access drawdown you can take 25% of each chunk you move into drawdown, spreading the tax-free element over years. Taking the whole 25% up front gives you the cash now but means the rest of the pot is fully taxable on withdrawal. Model the income side with the pension drawdown calculator or the tax on a one-off withdrawal with the pension lump sum tax calculator, and project your pot with the pension calculator.
Normally up to 25% of your defined-contribution pot tax-free, capped at the £268,275 Lump Sum Allowance across all pensions. The remaining 75% is taxed as income when withdrawn.
The Lump Sum Allowance is £268,275 for 2026/27 — the maximum tax-free cash across all your pensions. It replaced the Lifetime Allowance (abolished April 2024). Some people hold protected, higher allowances.
No — with flexi-access drawdown you can take the tax-free element in stages, getting 25% of each portion you crystallise. This is often more tax-efficient than taking it all at once.
Yes — the lump sum is free of Income Tax up to the allowance. But the rest of the pot is taxed as income when drawn, and a very large lump sum could affect other income in that year, so plan the timing.
