Can I take small cash sums from my pension pot?


You can take smaller sums of cash from your pension pot until it runs out. How much you take and when you take it is up to you.

  • You decide how much to take and when to take it.
  • Your 25% tax-free amount isn’t paid in one lump sum – you get it over time.
  • Each time you take a chunk of money 25% is tax free and the rest is taxable.

Some pension providers charge a fee to take cash out.

Not all providers offer this option. If your current provider doesn’t offer it, you can transfer your pot to another provider but you might have to pay a fee.

This calculator will not calculate tax accurately for individuals living in Scotland as income tax calculations are different. Get an estimate of how much tax you’ll pay.

Estimate how much you could get


Taking a large sum of cash from your pot can mean you pay a higher amount of tax.


You pay tax when you take money from your pot because you get tax relief when you pay into your pension.

The money you take from your pot will be added to any other income you have for that year, e.g. State Pension payments, benefits, interest from savings, salary. This could mean that taking a large amount of cash in one go will bump you into a higher tax rate.

If you spread the cash amounts over more than one tax year, you might pay less tax on them.

Example Your pot is £60,000. You take out £4,000 each year – £1,000 is tax free and £3,000 is taxable. You work part-time and earn £12,000 a year. The total of your earnings and the taxable cash you’ve taken from your pot is £15,000. This is above the standard Personal Allowance of £12,570. You pay £486 in tax.

Your pension provider will take off the tax you owe before they pay you the cash.

You may pay emergency tax when you take money from your pot which you can claim back.

If your provider doesn’t pay your emergency tax back automatically, you can claim it back from HM Revenue and Customs.

Book a free Pension Wise appointment to find out more about what you can do with your pot.

Continuing to pay in

If you have more than one pension pot, you can take cash in chunks from one and continue to pay into others. You may have to pay tax on contributions over £4,000 a year (known as the ‘money purchase annual allowance (MPAA)’).

This includes your tax relief of 20%. For example, to get a contribution of £4,000 you would only have to pay in £3,200.

Your provider may also let you continue to pay into the pot you take cash from.


Taking cash chunks from your pot could also affect your entitlement to any benefits.


Beware of pension scams contacting you unexpectedly about an investment or business opportunity that you’ve not spoken to them about before. You could lose all your money and face tax of up to 55% and extra fees.

Next steps

  • Ask your current provider if they offer the option – also known as ‘Uncrystallised Funds Pension Lump Sum’ (UFPLS) – and what they charge in fees.
  • If they don’t offer it, you can transfer your pot but you might be charged a fee.
  • Check if your pot has any special features that could mean you get a better deal, e.g. a guaranteed annuity rate.
  • Understand how much tax you’ll pay on any money you’re planning to take out.