Withdraw from your pension in one place

PensionBee combines your old pensions into one easy-to-manage plan so you can withdraw with ease when the time comes*. Get started in minutes and make retirement planning simpler.

*Start withdrawing from age 55 (rising to 57 by 2028).

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Choose a self-employed pension that puts you in the driving seat

Sign up to our flexible pension plan for the self-employed and contribute as much or as little as you like, as often as you like.

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The Climate Plan - invest in line with the Paris Agreement

Find out how you can use your pension to invest in environmentally friendly businesses at the forefront of the transition to a low carbon economy.

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Pensions explained

Pension Withdrawal

How does pension drawdown tax work?

Once you reach the age of 55 (57 from 2028) you can start to take money from your pension. Up to ^{_corporation_tax} of your savings can be taken tax-free, with the remaining 75% subject to income tax. The amount you pay depends on your total income for the year and your tax rate.

The pension drawdown tax rules

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If taking up to ^{_corporation_tax} of your pension, the process is relatively straightforward. You won’t pay tax on any of that ^{_corporation_tax} regardless of whether you’re:

taking cash in chunks;
taking your entire pot;
getting a guaranteed income (a pension annuity); or
opting for an adjustable income via drawdown.

You’ll only have to pay tax if you opt to take an amount over this ^{_corporation_tax} threshold. In this case any income you take will be added to the rest of your taxable income for that year, meaning taking large withdrawals could push you into a higher tax bracket.

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With this in mind, if you’re taking more than ^{_corporation_tax} of your pension it’s worthwhile checking the current income tax rates and personal allowances on the gov.uk website. You may pay less tax if you spread out your cash withdrawals and keep below higher rate bands.

How do I pay this tax?

Your pension provider is required to deduct any tax before a withdrawal is paid under Pay As You Earn (PAYE), and when you take a taxable payment for the first time it’s likely that you’ll be taxed using either an emergency tax code or the tax code provided on your valid P45. See the table below for how this emergency tax could impact on your withdrawal:

Single withdrawal of	Tax deducted	Payment to you
^{_basic_rate_personal_savings_allowance}	£0	^{_basic_rate_personal_savings_allowance}
^{_starting_rates_for_savings_income}	£953	£4,047
^{_money_purchase_annual_allowance}	£2,953	£7,047

If you’re a PensionBee customer then you’ll be placed on an emergency tax code until your individual tax code is received from HMRC directly. Please note, individual tax codes provided by HMRC can also be on an emergency tax basis and you should settle any remaining underpaid or overpaid tax directly with HMRC.

Drawdown with PensionBee

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With PensionBee, you’ll be able to track how your funds are performing through our online dashboard. Once you reach your pension age (currently 55, rising to 57 in 2028) you can make a withdrawal. You’ll need to verify your identity using our Facial Similarity Check (FSC) process. If all your bank details and identity are successfully verified, it usually takes around 10 working days for you to receive your money.

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Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

Last edited: 06-04-2025