Pensions and the 25% tax free cash

Bitstring , from the wonderful person Jim said

The 25% of whatever you cash has to be taken at the point you turn the rest into annuity or whatever, as far as I know. Just take the 25% tax free cash, and spend 1/5th of it each year (presumably you have a bed to keep the rest under).

Or just convert 1/5th of the pot into an annuity / drawdown each year, assuming it is structured in such a way that this is possible.

Basically, you have to either take an annuity with the 75% after taking tax free cash, or put the 75% into a drawdown plan (not an annuity). Such plans allow you to take an income (or none) straight from the fund. So if you don't want any, don't take it that year. You can change your mind another year.

Rob Graham

Thanks guys. Just what I needed to know. R