More than two-in-five (43%) of over 55s are not aware they can take 25% of their pension pot tax-free, according to research from Standard Life.
The research revealed that the majority (52%) of those aged between 50 and 54 are oblivious to this rule too.
It also found that among the 57% of over 55s who do know that they can access some of their pension without paying tax, 21% have done so already, while 9% plan to do so in future.
Most over 55s that have taken or plan to take their tax-free lump sum did or will do so at the point of retirement (69%).
In comparison, 16% have made or plan to make withdrawals at different points in retirement.
Dean Butler, managing director for retail at Standard Life, said: “Taking a tax-free sum from pension savings is a stage a lot of people look forward to.
“However, there are some key things to consider – for example taking it all in one go or splitting withdrawals into chunks over a period of time – and the implications and benefits involved.”
