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Pensions

What is pension crystallisation?

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In short: Moving part or all of your defined contribution pension into drawdown or annuity so you can take benefits. Usually up to 25% of each crystallised amount is tax-free; the rest is taxed when taken.

Content updated:

By the Money Guide editorial team · Editorial responsibility: Kaiser Khan, Editorial Director · How we check facts

You can crystallise in stages to spread tax-free cash across tax years.

Uncrystallised funds stay invested until you need them.

See pension crystallisation explained guide.

Primary source: gov.uk/tax-on-your-private-pension/what-you-can-do-with-your-private-pension-pot

Part of our Pensions & retirement

This quick answer sits inside our wider pensions & retirement hub — with sub-guides, calculators and step-by-step explainers on the same topic.

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