Good point, but if the market sky rockets there is a possibility that an ISA would be more profitable in the long run.

I was told ie.
If you have say 100k pot.
Take 10 k of your 25% tax free.
The remaining 15k of your tax free amount continues to be invested and can make or reduce as normal.
Then say your whole pot goes up 10% for example.
Then that 15k left from your tax free amount is now pro rata worth 16.5k.
Not as much as this example as a 10% rise is very abnormal but I think this is how you can make extras over and above your 25%.
Your knowledge looks better than mine so can you confirm this or am I talking absolute
ball crap.

Well I am soooooo confused now.
Firstly I thought on that example I could take 25% tax free in the sky rocket no probs so 25K. No tax no questions.
I also get that over the 25% is taxable against your current (at the time) income.
My point was that what if you didnt want your whole 25% in one go.
Is the remaining % you havent taken ,still 'allowed' to; on a pro rata basis accrue any profits or losses or is it just isolated and frozen so only the remaining 75% can go up or down as with your normal pension operation.
If the remainder of your TFA makes or loses do any profits or losses on a pro rata basis affect this remaining % of your TFA and if it goes up is this bit also tax free.
Only I have a nice lump in a couple of years and want to start planning.
Assuming I dont cop it or JC doesnt get in and his mate screws anyone with more than £12.76p in a pot! TIC.

I get it now thank you.
Its not hard to be a 40% tax payer.
So if I wanted say 21k for home improvements or a car etc I would need to take out 30k from my pension pot thus paying 9k tax. Geez.
Although now I can see why its taxed at source when you draw it as otherwise I could take a 25% lump no tax whilst being in a higher tax bracket and then take the rest as a draw down when I get older and into a lower tax bracket.
Any loop holes for a minion ?

That's why I mentioned up-thread about property rental income - it's often tax advantageous to have ownership split to take advantage of lower tax thresholds - and protect as much gross income as possible from 40%.

Generally I would agree with you re the final salary pension plan but not so long ago I was offered 60 times final benefit for a small final salary scheme I had in years gone by. I duly accepted and that money was then transferred into a DC scheme.