Pension warning as simple error may mean you slash savings potential by 90% | Personal Finance | Finance

Adrian Lowery, personal finance expert at BestInvest, said: “Those planning to access their pension flexibly either this tax year or next, need to think carefully about both the tax impact and the effect it will have on their ability to save further amounts into pensions in the future.   

“Anyone who makes a flexible withdrawal from their retirement pot beyond the 25 per cent tax-free lump sum triggers the ‘money purchase annual allowance’. 

“This permanently slashes their annual allowance from £40,000 to just £4,000.

“It revokes the privilege to carry forward unused allowances from previous tax years.