Taking SIPP payment in final year of working

Dazed_and_C0nfused

It doesn't have any impact.

All it does is increase the amount of basic rate tax you can pay.  So in your example your Personal Allowance would be used by the £12,500 earnings and your basic rate tax band would increase from £37,500 to £50,000.

So if you drawdown £12,500 from your SIPP in the same tax year you would need to pay £2,500 in tax on that.  Take it all in one go and as others have said you might pay more on day one but the end result would be there is £2,500 tax to be paid.

Marginally less if Scottish resident for tax purposes.