What choices do I have in retirement?
Pension Cash Pot
You now have the option to take your entire pension pot as cash lump sum.
The first 25% is still tax free, the remaining amount will be taxed according to UK thresholds for the existing tax year of withdrawal.
Imagine your state pension was approx. £6,000 and your £30,000 remaining pension pot to this and the total income for the year would be £36,000.
The tax you would pay on this amount would be just over £5,000. Therefore it would be prudent to opt for a flexible drawdown plan any pay the income out over a few years to reduce the tax hit.