Taking only what you need could help your pension last longer and may reduce the tax you pay.
When you decide to take money from your pension, you don't necessarily have to take it all at once.
Depending on your pension and the withdrawal option you choose, you may be able to take a one-off amount, set up regular withdrawals, or take some money now and leave the rest invested for later.
Taking only what you need means more of your pension remains invested.
This could give the remaining money more opportunity to grow, although investments can fall as well as rise.
It could also make a significant difference to how much money you have available later in retirement.
You can normally take some of your pension tax-free, subject to the applicable rules and allowances.
Other pension withdrawals are generally taxable and are added to your other taxable income.
Taking a large taxable withdrawal in one tax year could push some of your income into a higher tax band. Spreading withdrawals over time may result in a different tax outcome, depending on your circumstances.
You may not need a large lump sum.
If you need extra money to meet regular expenses, smaller regular withdrawals might be another option to consider.
For example, instead of taking £12,000 at once, you could explore what taking £1,000 a month would mean.
There are different ways of taking money from a pension and they can have different tax consequences.
Before deciding, try different amounts in a Withdrawal Calculator.
You can see how a one-off or regular withdrawal could affect:
How much tax you might pay
How much you could receive
How much could be left in your pension at retirement
Your projected retirement income
Pension App withdrawal calculator coming soon.
Money you leave in your pension can remain invested and potentially support your income later in retirement.
Taking money from your pension is therefore not just about how much you can take.
It's also worth considering how much you need to take now and how much you want to leave for later.
For free and impartial guidance about your pension options, Pension Wise is available through MoneyHelper.
This guide provides general information and is not financial advice. Tax treatment depends on your individual circumstances and may change in the future.