do you have to take all of the 25% tax freecashh when in income drawdown?

Answer 1

No. If you really insist, you can take all of the money as taxable instalments. A better way is to draw the tax-free cash first (all at once or by instalments as a tax-free "income") then start taking taxable drawings when it's used up. That way you get a tax holiday and you can cash in other investments with a tax saving.

Answer 2

You don't 'have' to take any at all, however you have to be rather dim to pay Tax on money that you don't have to.

You will have to pay Tax on the rest of your pension - or at least on that part that exceeds your Personal Allowance ... don't forget that the State Pension (assuming you are old enough to be getting it) is added to your income when calculating Tax)

I would take the full 25% and (assuming my income is too low to attract any Tax) :-
1) Open a new SIPP putting in £2808 per year (limit to get nominal Tax relief (even when paying no Tax) at 22% thus boosting the SIPP contribution to 3600)
2) Add to my Stocks & Shares ISA, if necessary over several years.

I would also take only / at least as much Drawdown as necessary to reach the point where I had to pay Tax (if that's within the drawdown limit) and 'top it up' with cash from the ISA as long as possible.

You should 'spreadsheet' various different combinations of drawdown/ISA to see what's going to give you the 'best' Pension.

Answer 3

sorry but i can't help. but good luck!