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    • Home • Advice • Common questions

    Should I take my 25% tax-free pension cash as lump sums or draw it down monthly?

    13 April 2026

    Question by Boring Money reader

    I'm about to crystallise my SIPP and start drawdown. Am I better off taking 25% tax-free chunks until the tax-free amount is used up, or drawing down regular monthly amounts with only 75% of each withdrawal taxed?

    Answered by Lucy Grifferty

    This is essentially a question about the timing of when you pay tax. Taking tax-free lump sums upfront can suit some people, while regular drawdown spreads taxable income over time. What works best often depends on your other income, your tax band, and your wider needs. For example, some people look to fill their personal allowance

    before their State Pension starts. Others take regular income now — paying tax as they go — and leave some tax-free entitlement in reserve for an unexpected lump sum requirement later. It's also worth considering annuitisation: trading part of your pot for a guaranteed income, which is an option that shouldn't be overlooked.

    Answered by

    Lucy Grifferty

    Director & Independent Financial Planner

    Lucy helps people in mid to later life understand their current circumstances through financial planning. She supports them and helps them achieve their personal goals through the implementation of tailored financial advice.

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