{"id":160746,"date":"2025-09-22T09:49:07","date_gmt":"2025-09-22T09:49:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/160746\/"},"modified":"2025-09-22T09:49:07","modified_gmt":"2025-09-22T09:49:07","slug":"should-you-take-money-out-of-your-pension-ahead-of-the-budget","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/160746\/","title":{"rendered":"Should You Take Money Out of Your Pension Ahead of the Budget?"},"content":{"rendered":"<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">With a defined contribution pension, the first 25% is usually tax free. Beyond that, there are four main options:<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Full lump sum<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Withdraw the whole pot at once. A quarter is tax free, but the rest is taxed as income, which can push you into a higher tax bracket. For example, from a \u00a3100,000 pot, \u00a325,000 would be tax free, but the remaining \u00a375,000 would be added to your income for the year.<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Smaller lump sums (UFPLS)<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Take ad-hoc withdrawals directly from your untouched pot. Each time, 25% of the withdrawal is tax free and the rest is taxed as income. There is no separate drawdown account and usually no upfront 25% on the whole pot.<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Annuity<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Use your pot to buy a guaranteed income for life from an insurance company. The advantage is certainty, but the downside is less flexibility and limited inflation protection.<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Drawdown<\/p>\n<p class=\"ssrcss-1q0x1qg-Paragraph e1jhz7w10\">Move some or all of your pension into a flexible retirement income arrangement, often called a drawdown account. You can usually take 25% tax free at the start, while the rest stays invested. You decide how much to take and when, but you take on investment risk and ongoing charges.<\/p>\n","protected":false},"excerpt":{"rendered":"With a defined contribution pension, the first 25% is usually tax free. Beyond that, there are four main&hellip;\n","protected":false},"author":2,"featured_media":160747,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-160746","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/160746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=160746"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/160746\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/160747"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=160746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=160746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=160746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}