You can still take up to 25% of your SIPP as tax-free cash after age 75, capped by the £268,275 Lump Sum Allowance, and the old benefit crystallisation test at 75 no longer exists. What changes at 75 is everything around that withdrawal: death benefits paid to your family flip from tax-free to taxable, tax relief on any further contributions stops, and from April 2027 unused pension funds start counting toward inheritance tax. The SIPP tax-free cash rules at age 75 are broadly unchanged; the surrounding tax picture is not.
What Age 75 Means Now That the Lifetime Allowance Is Gone
Before April 2024, turning 75 triggered a benefit crystallisation event. Your provider tested your uncrystallised funds against the Lifetime Allowance, and going over meant a tax charge. That framework has been removed. HMRC has confirmed that “there is no test of pension savings against the new allowances at age 75,” and members can still receive an Uncrystallised Funds Pension Lump Sum after 75 provided the other eligibility conditions are met.1GOV.UK. Lifetime Allowance Abolition – Frequently Asked Questions
So the tax-free cash mechanics themselves are not what changes at 75. Three other things do: how your death benefits are taxed, whether new contributions attract tax relief, and (for a small group) how any transitional protections carried over from the old regime interact with what happened at your 75th birthday under the previous rules.
How Much Tax-Free Cash You Can Still Take
Two allowances now govern tax-free pension cash. The Lump Sum Allowance caps total tax-free lump sums during your lifetime at £268,275. The Lump Sum and Death Benefit Allowance sets a wider ceiling of £1,073,100 covering both lifetime tax-free withdrawals and any tax-free lump sums paid to beneficiaries after your death.2GOV.UK. Tax on Your Private Pension Contributions – Lump Sum Allowance
Both allowances apply across every pension you hold, not just your SIPP. If you’ve already taken £100,000 tax-free from a workplace pension, only £168,275 of the Lump Sum Allowance remains for your SIPP. Your provider will ask you to declare how much of the allowance you’ve already used elsewhere before releasing any payment.3MoneyHelper. Tax-Free Pension Lump Sum Allowances
If you hold protections from the old regime (Enhanced Protection or Fixed Protection, for example), your personal allowances may be higher than the standard figures. Without protections, anything above £268,275 is taxed as income at your marginal rate: 20%, 40%, or 45% for the 2026/27 tax year.4House of Commons Library. Direct Taxes – Rates and Allowances for 2026/27
Taking the 25% After Your 75th Birthday
The 2024 changes actually improved matters for people who reach 75 without having touched their SIPP. Under the old rules, the crystallisation event at 75 effectively froze the tax-free cash figure based on Lifetime Allowance headroom at that point. That freeze is gone. If your scheme rules allow it, you can still draw 25% of your uncrystallised funds tax-free after 75, so long as you have enough of your £268,275 Lump Sum Allowance left.1GOV.UK. Lifetime Allowance Abolition – Frequently Asked Questions
The catch is on the provider side. Not every SIPP scheme permits benefits to be taken after 75; some require crystallisation before that birthday. Check the scheme rules well before you turn 75, not after. And be aware of the downside of deferring: if you push past 75 without taking your tax-free cash and then die, the tax-free element is lost, and anything paid to your beneficiaries is taxed as their income.
The other 75% of any withdrawal is taxed as income in the year you take it, exactly as it would be at any other age. Your provider deducts income tax through PAYE, and the taxable portion adds to your total income for that year.2GOV.UK. Tax on Your Private Pension Contributions – Lump Sum Allowance
How Death Benefits Change at 75
This is the single biggest reason 75 still matters. Die before 75 and most lump sum death benefits go to your beneficiaries free of income tax, provided they stay within your Lump Sum and Death Benefit Allowance. Drawdown income and annuity payments from a drawdown fund established on or after 6 April 2015 are also tax-free to the recipient if you die before 75.5GOV.UK. Tax on a Private Pension You Inherit
Die at 75 or later and it reverses. Lump sum death benefits are taxed at the beneficiary’s marginal income tax rate. Inherited drawdown income and annuity payments are taxed as the recipient’s income. The provider deducts the tax before paying.5GOV.UK. Tax on a Private Pension You Inherit
One further trap catches families even when death occurs before 75. A lump sum death benefit paid more than two years after the provider is notified of the death becomes fully taxable regardless of your age at death. Keeping your expression of wishes current, and making sure whoever will handle your affairs knows to contact the provider quickly, protects against this. The scheme administrator has discretion over who receives the funds, but a current expression of wishes is usually followed in straightforward cases.
Inheritance Tax on Unused Pension Funds From April 2027
SIPP funds sitting outside drawdown currently fall outside your estate for inheritance tax, which has made pensions a powerful tool for passing wealth on. That advantage is being removed. From 6 April 2027, most unused pension funds will be brought inside the deceased’s estate for inheritance tax, adding to the rest of the estate and potentially taxed at 40% above the £325,000 nil-rate band.
For anyone dying after 75 with a significant SIPP balance after April 2027, that creates a double hit: inheritance tax as the money enters the beneficiary’s hands, then income tax as they draw it. The interaction of the two charges is still being finalised through the Finance Bill process, and the nil-rate band is frozen until at least April 2030. If you hold substantial pension wealth, the case for revisiting your drawdown and gifting plans well before April 2027 is stronger than it was.
You Lose Tax Relief on Contributions
Once you turn 75, contributions to a pension no longer attract tax relief.6MoneyHelper. How Tax Relief Boosts Your Pension Contributions Most people at this age aren’t still paying in, so this rarely bites. If you are still working or have self-employment income, though, the government top-up on new SIPP contributions stops on your 75th birthday. That changes the calculation on whether new savings belong in a SIPP or in an ISA or other tax-efficient wrapper.
Making the Withdrawal
Before you contact your provider, gather two things: your current SIPP valuation and a record of any tax-free lump sums you’ve already taken from every pension scheme. The provider needs both to check what’s left of your £268,275 Lump Sum Allowance. If you’ve never taken tax-free cash before, the whole allowance is available.2GOV.UK. Tax on Your Private Pension Contributions – Lump Sum Allowance
Most providers handle drawdown and lump sum requests through an online portal, with identification documents and bank details uploaded there. Some still accept postal requests. Processing time depends on how quickly underlying investments can be sold; straightforward requests with liquid holdings often complete within a couple of weeks, though providers commonly warn that first payments can take up to four weeks.
Once the payment goes out, your provider will confirm how much of your Lump Sum Allowance has now been used. Keep that confirmation. Any future provider you deal with will not have that information, and you’ll need to declare cumulative use across all schemes each time you take further tax-free cash.
Watch for Emergency Tax on the First Payment
Your provider almost certainly won’t have an up-to-date tax code from HMRC when you take your first taxable payment. They apply an emergency code, which treats the payment as though you’ll receive the same amount every month for the rest of the tax year. On a one-off lump sum, that overstates your income and pulls too much tax.
You can reclaim the overpayment without waiting for the end of the tax year. Form P50Z applies if you’ve taken the whole fund and have no other income that year. Form P53Z applies if you’ve taken the whole fund but do have other income. Form P55 applies if you’ve only taken part of the fund and don’t plan further withdrawals in the same tax year. Submitting the right form gets the money back faster than relying on self-assessment.