That's not entirely true. I'm retiring myself in August, so I'm fresh out of meetings with financial advisors and a retirement course paid for by my employer to explore all this kind of thing.
Everyone has an allowance called the "Lifetime Tax Allowance" (LTA), which is the maximum amount you're allowed to draw as a pension under the very favourable tax laws that govern pensions. For the 2019-2020 tax year the LTA is £1,055,000, so as long as your lifetime pension withdrawals are under that limit, withdrawing money from your pension pot will have no adverse effects, other than reducing the size of your pot and the amount of tax free money or income you can subsequently take from it.
You can take up to 25% of the value of your pension pot tax free, regardless of whether it's as a lump sum or a regular pension payment. The remaining 75% is taxed as normal.
I certainly agree that the OP should speak to an independent financial advisor before making any decisions. I don't know if it's the same with all pensions providers, but my pension fund managers insisted that I get independent financial advice before withdrawing any funds.
Edited by member 10 May 2019 at 09:26
| Reason: Not specified