Certain things depend on what type of pension it is. There are 'Defined Contribution' pensions and 'Defined Benefit' pensions.
You should speak to Pension Wise first before you do anything, (in fact most companies will insist you speak with them or an independent FA). PW only inform you of your options concerning Defined Contribution pensions. For Defined Benefits, (i.e. average salary/final salary schemes), you have to speak to an IFA as these schemes usually have things like death benefits and/or guaranteed payments etc.
Anything remaining after taking your 25% tax free sum is usually transferred into a separate fund as you can no longer remain in the pension fund. You can access this at a later date to buy an annuity and can group others together to get a better annuity. You can only have one annuity, not several separate ones, so it makes sense to take advice about combining them and getting several quotes before buying.
You can of course take the whole pot and 25% will be tax free but the remainder will be classed as extra income for the current tax year and will be taxed at the appropriate rate after calculation by HMRC. I believe it is taxed at source and the first payment, or only payment, will usually be taxed on Emergency Coding at 40% it is then often up to you to claim it back or the tax man may tell the provider to tax subsequent payments at your standard rate if you are unlikely to reach the higher tax band.
Book an appointment with Pension Wise and when you have your appointment booked make sure you have all your different pensions information to hand. Also jot down what you would like from your pension(s) when you do retire etc The interview takes about 45 minutes to an hour so make sure you can be somewhere quiet where you won't be disturbed. Things will seem a lot clearer after speaking with them. As I said earlier, they can only talk about Defined Contribution, (Stakeholder type), pensions and they do NOT give investment advice. They merely explain what options are available to you. It's a freephone number and you can usually get an appointment in a few days. I phoned on the Tuesday lunch time and had my interview on the Thursday lunch time. Totally free service and no selling involved.
