Pension drawdown glossary

Pension commencement lump sum (tax-free cash)

The tax-free lump sum you can normally take when you start drawing a pension — usually up to 25% of the amount you crystallise, within the Lump Sum Allowance.

Source: GOV.UK: lump sum allowance · Last reviewed 24 September 2026

Related terms

Lump Sum Allowance (LSA)
Crystallisation
Recycling rule
Protected tax-free cash

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.