The government allows you to take up to a quarter of the money from your pension fund as a tax-free cash lump sum. You can do anything you want with this. For instance you may choose to take a holiday, pay off some debts, refurbish your home or even buy a new car.

You might want to save it for a rainy day. After all, there are plenty of things you just can’t plan for, such as your car unexpectedly breaking down or your boiler needing repairs. Or you may simply use it to boost your income, tax-efficiently. This will reduce the income available from your pension fund. Tax rules may change in the future.