What you need to seriously think about
Although the idea of taking your entire pension as cash might seem appealing there are a few key areas you need to consider before making any decisions.
Will I pay tax?
Yes up to 25% of your lump sum is tax free, the remainder will be taxed as income in the year you take it. Use the Lump Sum Tax Calculator to work out how much tax you could be expected to pay.
What will provide me with an income in retirement?
If you take your entire pension as a lump sum this could replace your working income when you stop work. You may be entitled to the State Pension.
Is this going to be enough to fund my retirement?
You need to think about what will provide you with the income you need to live on in retirement. You don't want to outlive your savings and careful planning will help you to avoid this.
What can I do with my lump sum?
It depends on your personal circumstances and what you would like to do: some of the options could include paying off debt or investing. You should seek financial advice.