What’s tax-free cash?


Tax-free cash is money you can take as a lump sum from your pension pot without having to pay any tax on it. You can spend this money on anything you want (although note there are rules that restrict you from ‘recycling’ your tax-free cash back into your pension pot). You can usually take up to 25% of your pension fund as tax-free cash. Taking tax-free cash from your pension pot reduces the amount you can use to provide an income during your retirement. You may also hear this referred to as a PCLS (pension commencement lump sum).

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