Pension drawdown glossary
A way of working out PAYE that treats each payment on its own, as if you were paid that amount every month: one-twelfth of the personal allowance and tax bands is applied. Emergency tax codes on a first pension withdrawal work this way, which is why a large one-off withdrawal is often over-taxed.
Source: GOV.UK: emergency tax codes · Last reviewed 24 September 2026
See every term in the A–Z glossary. Definitions are general information for the 2026/27 tax year, not personal advice.
Important: The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and benefits depend on individual circumstances. This is not financial advice.