Will I be able to access my full pension if I've already taken out 25%?

23 September 2014


I have a Self Invested Personal Pension (Sipp) with Standard Life, which I am not contributing to, nor drawing anything on. I now work in the public sector and contribute to my employer's scheme and, three years ago, I took my 25% tax-free allowance to help my son get on the property ladder. Under new pension proposals, does this mean it is considered I have now started to take my pension and so will be unable to get access to my full pot?


When you took your tax-free cash, the remainder of the fund at that time was moved into 'capped income drawdown' within the Sipp.

This allows income to be taken should you wish.

The maximum income you are allowed to take was increased after the Budget to 150% of the amount derived from the government's actuary department (GAD) tables.

From April 2015, people who are in drawdown will have two options. The first is to continue in capped drawdown and take income within the 150% limit.

In that case, you keep the ability to pay tax-efficient future pension contributions up to £40,000 a year.

Alternatively, you can choose to withdraw larger sums above the 150% limit (potentially up to the whole of your fund) but if you do, you will only be able to pay up to £10,000 into your pension in future years.

You will also need to check your current provider will offer this new flexibility to withdraw larger amounts. Also, bear in mind that all withdrawals will be subject to the marginal rate of income tax.

Andrew Tully is pensions technical director at MGM Advantage