Withdrawing your pension in full

If you’re 55 or over (57 from 6 April 2028), you can – if you choose to – withdraw all your pension pot in one go.

It’s a big step. Once you cash in your SIPP, you usually can’t change your mind, so it’s important to carefully consider all the implications first. This page sets out the main things you should think about.

If you’re not sure what to do, a regulated financial adviser will help you decide what’s best for your circumstances. Alternatively, you can get free guidance from the Government service Pension Wise. Just remember, this isn’t a substitute for personalised advice.

You might run out of money

When you withdraw your entire pension pot, it can no longer provide you with an income in retirement.

So, you should consider the other sources of income or capital you can call upon, including other pension pots and your state pension. Will they be enough to meet your needs and regular outgoings throughout your retirement?

You’ll probably pay more tax

Another crucial consideration is tax. By withdrawing your whole pot at once, you’re likely to face a heftier bill from HMRC than if you took it in stages.

Although you can take up to 25% tax-free, the remaining 75% will be taxed as income. Withdrawing your whole pot may push you into a higher tax band, meaning you receive far less than you expect.

What else do you need to consider?

Overpaid tax – when you make a SIPP withdrawal, we must deduct income tax automatically and pay it to HMRC. This could mean you overpay income tax initially, and need to claim money back from HMRC.

Learn more about pensions and tax

Future pension contributions lowered – after you withdraw your whole pot, the maximum amount you can pay into other pensions each tax year is £10,000.

Learn more about the money purchase annual allowance

State benefits affected – withdrawing a large sum from your pension may also affect whether you’re entitled to means-tested state benefits, both now and in the future.

Pension tax advantages lost – by withdrawing your wealth from your pension, you'll lose some tax advantages when passing it on to your beneficiaries.

Learn more about SIPPs and death

Want to access your SIPP more gradually?

Accessing your whole pot in full won't be right for everyone. If you choose to withdraw your SIPP gradually instead, you have lots of different ways you can do it. Learn more about your pension choices at retirement.

Ready to withdraw your whole pension?

If you've decided that withdrawing your pot in full is the right option for you, just log into your account and access the 'Manage my SIPP' page.

To find out more about your options, have a read of our guide to accessing your pension and guide to drawdown.