There are multiple ways in which you can withdraw a pension. Some are more tax efficient than others and some may suit your personal needs more than others.
What’s taxed? If your total annual income adds up to more than the personal allowance (£12,570 – 2022/23) you will need to pay Income tax. Example of taxable income are: State pension, private pensions, profit from self employment, dividends, taxable benefits and other income such as returns on investments & savings
If your private pensions total more than £1,073,100 you may be subject to higher rate tax. There will also be tax to pay if your pension contributions exceed £40,000 in any tax year, unless covered by unused relief from the previous three years, (this £40,000 limit may be reduced for high income earners). In general, you can take 25% of your pension pot as a one-off lump sum without paying tax but the remaining 75% must be used to buy an annuity, to secure an adjustable income or taken as cash (with tax due on the balance).