See your 25% tax-free cash and the income tax on what you draw — so you can plan a retirement income that keeps more in your pocket.
Indicative 2026/27 estimate of tax-free cash and income tax on drawdown. From April 2027 unused pension funds also fall within inheritance tax. A tax adviser confirms your position.
You can usually take 25% of a defined-contribution pension tax-free — capped at £268,275 — with the rest taxed as income at your marginal rate when you draw it. Draw too much in one year and you can push yourself into the 40% or 45% band; spread it sensibly and you keep far more.
Timing matters more than most people realise — using your personal allowance and basic-rate band each year, coordinating with other income, and (from April 2027) the fact that unused pension funds will fall within inheritance tax. For business owners approaching an exit, the pension, the sale and the estate all need planning together.
And the squeeze is tightening. With tax allowances and thresholds frozen, inflation quietly drags more of your income — and your pension — into higher bands every year, while eroding the real value of what’s left. Standing still costs you. The earlier drawdown is planned, the more you keep. Property Tax Optimisers models it alongside your wider retirement and succession plan.