If you decide to cash in your pension policy you will receive 25% tax free, and then your pension provider will apply the appropriate level of tax based on HM Revenue & Customs (HMRC) regulations on the remaining 75%. There are different regulations around how your pension provider will initially apply tax, dependent on the size of your pension savings and whether you have received cash from any other pension savings previously.
If you have a Phoenix Life Individual Pension Policy you can use our tax calculator to give you an indication of what you would receive from your policy if you were to take the entire amount as cash.
It is important to understand the amount of tax that will initially be deducted by your pension provider will not necessarily be the final amount of tax that you pay. Other income, that your provider won’t have been aware of, will affect the final amount of tax that you will pay. You could have either underpaid or overpaid on your tax.