One in 10 will cash in pension pot in one go - Prudential

20% will risk avoidable tax bills

Hannah Godfrey
clock • 1 min read

One in ten (10%) of those planning to retire this year expect to withdraw their entire pension savings as one lump sum, according to research by Prudential.

The research also suggested a fifth (20%) of people retiring this year would risk avoidable tax bills by taking out more than the tax-free 25% limit on withdrawals. The study found such people were not necessarily spending all the cash - the main reason given by those taking all their funds in one go was to invest in other areas such as property, a savings account or an investment fund, with almost three-quarters (71%) choosing those options. Of those planning to spend the cash, the most popular use was for holidays, with a third (34%) planning to spend the money on trips. A quarter (...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

Budget 26: Government to get rid of two-year tax rule on lump sum death benefits

Budget 26: Government to get rid of two-year tax rule on lump sum death benefits

Changes will also be made to how tax due on excess lump sum death benefits is collected

Jonathan Stapleton
clock 28 October 2026 • 1 min read
Budget 26: State pensioners to be shielded from income tax

Budget 26: State pensioners to be shielded from income tax

State pension expected to rise to £13,036

Sophia Panayi
clock 28 October 2026 • 2 min read
Budget Media Watch: Healey to raise tax-free allowance for low-income state pensioners

Budget Media Watch: Healey to raise tax-free allowance for low-income state pensioners

Not expected to tinker with tax-free lump sum

Jen Frost
clock 26 October 2026 • 2 min read