Small pot lump sum

If you have £10,000 or less in your pension pot, you may be able to cash in the whole lot from age 55 (or age 57 from 2028).

The first 25% of cash you take is tax free. The remaining 75% is taxable, as if it were income, at the highest rate you pay.

  • You can cash in any number of occupational pension pots in this way (like The People’s Pension).
  • You can cash in up to three personal pension pots during your lifetime.
  • Unlike flexible lump sums or flexi-access drawdown, a small pot lump sum won’t reduce your annual allowance (for tax relief on money you save into your pension in the future).
  • HMRC have complex rules on whether you can or can’t take a small pot lump sum. This can include different criteria for transferring pension schemes so make sure you get guidance and advice.
    • If you’re claiming a small pot lump sum with The People’s Pension, you can start the process over the phone, requesting a printed claim form, or through your Online Account. We’ll then let you know if there’s any reason you can’t go ahead.

More about your different options for taking your pension savings