Is my 25% tax-free cash based on my pension’s value today or when I retired?

10 Nov, 2026

Question by Boring Money reader

I have taken some of my 25per cent when I retired and now my pension savings are split into 2 pots. Does the growth in the initial pot still qualify for 25 per cent of the total, or just 25 per cent of the balance at date of retirement?

Answered by Annabel Lumsden

When you take tax-free cash from your pension, you complete a process called ‘crystallisation’. The tax-free cash is paid out to you, and the remainder is designated into a ‘crystallised’ account, which is kept separate. No further TFC can be drawn from that pot. Any ‘uncrystallised’ funds (i.e. the pot you have not yet drawn from) is accessible for tax-free cash at 25% of its current value, including growth and any further contributions made.

Answered by

Annabel Lumsden

Financial Adviser

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