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There are tax implications when you take your retirement savings as cash
Click on of the headings below for help:
When you take your retirement savings as a cash, you are normally entitled to take 25% tax free. The balance will be taxed at your marginal rate.

Here's how to calculate your marginal rate, if you are a UK tax payer.

For the 2018/9 tax year, your taxable income will be looked at in the following bands:
  • The first £11,850 is tax free
  • Between £11,850 and £46,350 the tax rate is 20%
  • Between £46,351 and £150,000 the tax rate is 40%
  • Over £150,000 the tax rate is 45%
The three percentages: 20%, 40% and 45% are known as marginal rates.

An Example:
  • Retirement savings after taking 25% tax free cash: £20,000
  • Other taxable income: £30,000
  • Total taxable income: £50,000
Tax you would pay on this income:

£11,850 taxed at 0% = £0
£34,500 taxed at 20% = £6,900
£3,650 taxed at 40% = £1,460
Total tax on a £50,000 taxable income = £8,360.
 
If you want to find out more about how a lump sum will be taxed:
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