Older Brits warned of 'big' retirement cost as withdrawals cause major tax bills

manchestereveningnews.co.uk:

Many Brits approaching retirement age are facing hefty tax bills after withdrawing large sums from their pension pots, often without consulting advisors over the potential tax implications.

Standard Life's analysis reveals that 221 people withdrew pots of £250,000 or more between October 2022 and March 2023, each incurring a minimum tax hit of £97,500.

Accessing this cash as a lump sum can be an attractive option for starting your life after work, but it is often not the best way to minimise the tax paid on your pension.

Mike Ambery, Standard Life's retirement savings director, has cautioned against making hasty decisions, saying: "There can be a big cost to not considering tax when you access your pension." He added: "Many people understandably don't think about how much tax they'll need to pay from their pension income.