Can you take your 25% tax-free lump sum from multiple pots?

3 July, 2024

Question by Boring Money reader

Hi,

I have three pension pots and I want to know, do I have to amalgamate them before I can take the 25% tax-free lump sum or can I take 25% from each one of the pots?

Thanks.

Answered by Lee Wells

You do not need to amalgamate your pots to take your tax-free lump sum.

You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The most you can take across all is currently £268,275.

If you hold a protected allowance, you may be able to take from your pensions tax-free, but you will need to calculate this.

When you come to withdraw additional income, it may be in your best interests to amalgamate if it would reduce charges or provide more suitable income options.

Answered by

Lee Wells

Managing Partner - Financial Planner

When I got my first job in the 90’s, my father said ‘you should go to see my financial adviser’ (I didn't even know he had one!). I dutifully went to see him and was converted by the common sense advice I was given on saving and investing for my future. I liked it so much I joined the company so I could help other people learn how to invest. I now run a company that's passionate about providing value for money advice on a whole range of areas.

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