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Retirement

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Tax free lump sum, or not!

28 replies

loveawineloveacrisp · 20/08/2026 10:05

I'm retiring at the end of this year and am undecided as to whether I want to take my full tax free lump sum from my DC pot. I originally planned to take it phased over a few years and live tax free for 3-4 years, but I have a niggling thought that the rules might be changed at some point. The other consideration is that I'm going to be moving to a country where the tax free lump sum isn't recognised in the next 2-3 years so I need to get it out before then.

If you're due to retire soon, what are your thoughts on this?

OP posts:
Specialagentblond · Today 08:41

@IsThisEverOkay00 why is £16700 the optimal figure? I know zero rate is just over £12k

GOODCAT · Today 10:45

16700 is optimal because 25% is tax free lump s sum and 75% is taxable but matches the annual allowance so you pay no tax.

Specialagentblond · Today 10:52

Of course. That makes utter sense.

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