6 Things to consider before taking cash from your pension

4.Is this the optimal time to withdraw from your invested pension pot?

If you don't need the money immediately and can be flexible about when you take your tax-free cash, try to avoid withdrawing right after your pension investments have experienced significant losses. Minor market fluctuations are less concerning, but withdrawing after a major market drop risks locking in those losses before your investments can recover.

For those with very large pension pots, upward market movements might push your savings above the 'Lifetime Allowance', which is the maximum amount you can accumulate in pension benefits over your lifetime while receiving full tax benefits.