When you use your pension to make withdrawals (usually in the proportions: 25% tax-free cash and 75% taxable income), that part of your pension being used to provide the withdrawals is referred to as ‘crystallised’. So for every £100 you take as tax-free cash, £400 of your pension is ‘crystallised’. The remaining £300 (75% of the crystallised amount), will be treated as taxable income when you withdraw it.

When any of your pension savings are crystallised, this is known as a Benefit Crystallisation Event (BCE).