Martin Lewis issues urgent warning to pensioners about the 'biggest mistake' they can make with their nest egg - and says it can cost 'tens and thousands of pounds'

The British money saving expert, 52, featured on ITV's This Morning today READ MORE: Martin Lewis reveals how people can make up to £1,000 a year just by changing their bank account - but you need to make sure you jump through 'all the hoops'

Martin Lewis has warned against withdrawing money from a pension, claiming it's 'one of the biggest mistakes you can make if you get it wrong'.

The British money saving expert, 52, from Manchester, discussed the topic on today's episode of This Morning.

A pension is a tax-efficient saving pot for retirement that the employees and their employer can add money into.

'Taking money out of the pension is one of the biggest mistakes you can make if you get it wrong; it can cost you tens and thousands of pounds that you can't get back,' Martin warned.

During the show, Martin used a jam Swiss roll analogy to explain why withdrawing cash from pensions can be problematic.

British money saving expert Martin Lewis (pictured), 52, urged ITV's This Morning viewers against withdrawing money from their pension

In 2015, pension freedom allowed anyone who's aged 55 plus to be able to withdraw money from their pension.

'Since they introduced what's called pension freedom, you have been able to have your pension like a bank account,' Martin said.

While it is unlikely, should one want to withdraw the total amount of savings in one go, the first 25 per cent is tax-free and the remaining 75 per cent is taxed as income.

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However, using his jam Swiss roll analogy Martin explained why it might not be the wisest route.

'The jam in my Swiss roll, that's the tax-free amount, and the sponge is the taxed amount in the savings,' Martin explained.

He continued: 'If you just remove it [the jam] from the bank account, what happens is like taking a slice of Swiss roll, you can't just take the 25 per cent [the jam]' but you also get some sponge.

Because you take a slice of the Swiss roll with jam and sponge, '25 per cent of it is tax free, and the rest is taxable,' Martin said.

He continued: 'So, if you take £10,000 out, £2,5000 is tax free, and £7,500 is taxable.'

Martin explained that there are three alternatives. First, you can take 25 per cent tax-free and buy an annuity - giving you a guaranteed income for the rest of your life.

Or you can take 25 per cent tax free and then do income drawdown on the remaining balance, 'a drawdown is just another form of investment,' Martin said.

The 52-year-old used a Swiss roll (pictured) analogy to explain why taking money out of a pension can lead to money loss

He added: 'That way, you can take 25 per cent tax free and you can leave the rest in your drawdown or in your annuity for later.

Martin went on to explain why this is a better option. 'Let's say you're still working when you take [cash out] and you're a twenty per cent taxpayer.

'If you've taken £10,000 out, £7,500 is going to be taxed at 20 percent. Alternatively, you could just take the 25 per cent tax free and leave the rest invested until you stop work and are no longer a taxpayer.

'Then, you're in a lower bracket and you take the amount, [but] even though its taxable you're not a taxpayer, [so] it's tax free for you.'

It comes after Martin Lewis revealed how holidaymakers can snap up the cheapest Easyjet flights for 2025 – but they'll need to be on their toes.

The founder of Money Saving Expert told his 2.9million Twitter followers that the airline has launched its March to June 2025 ticket sales – and that to stand the best chance of bagging a bargain, it's best to act fast.

He wrote: 'Just heard Easyjet launching its March to June 2025 flights tomorrow [Tuesday] from 6am-ish.

'Bagging them the moment they launch (browser refreshing type thing) is often (no guarantee) the way to get them at the cheapest possible rate.

'Flights can rise by £100s even after a couple of hours of launch morning. So if you're going to book, try early.'

He added: 'P.S - cheapest possible, doesn't necessarily mean cheap, do check what a decent rate is before booking.'

Easyjet says that tickets can be booked now for departures up to June 15, 2025.

The airline is advertising 108 destinations from London Gatwick, with deals that include flights to Ibiza from £20.99, Amsterdam from £23.99 and Lanzarote from £35.99.

As a general rule, as the date of a flight approaches and more seats are sold, prices go up.

Cheapair.com revealed that fares change 49 times on average and change by an average of £34 each time.

The California-based firm urges passengers-in-waiting to book flights that take off mid-week.

The site said: 'Mid-week flights (Tuesday and Wednesday) almost always offer the best value. Travelling mid-week should always be a consideration for the budget shopper.'

It added: 'Flying on Wednesday will save you almost $100 (£80) versus Sunday – the most expensive day to fly.'

Does clearing browser history make any difference? Cheapair.com is unequivocal, stating that the theory that clearing browsing history will magically show you the lowest flight prices is a myth.

The site said: 'Airlines don't track your searches so they can raise the prices on you next time you come around.'