How this works
2026/27 rates. This comparison assumes uncrystallised defined contribution funds and standard tax-free entitlement. The upfront option takes up to 25% of the pot as a separate lump sum, limited by your remaining allowance; the annual drawdown withdrawal is then fully taxable. In the phased option, up to 25% of the annual withdrawal is tax-free, within the same allowance.
The upfront option releases extra one-off cash, so total pension access differs. The table compares the annual withdrawal, not lifetime outcomes. It is not a recommendation or a comparison of every drawdown strategy. It does not model savings, dividends, tax reliefs, emergency tax, protected allowances, benefits or the money purchase annual allowance. It calculates additional Income Tax caused by the withdrawals.
Sources: UK Income Tax rates, Scottish Income Tax rates, tax-free lump sum allowances.