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Which? Recommended Provider for Self-Invested Personal Pensions

“A simple way to invest, at a fraction of the cost of its rivals”

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A pie chart showing tax-free cash, taxed as income and remaining pension stays invested

What is an individual lump sum (UFPLS)?

You can take lump sums from your pension pot when you want to. This is also known as Uncrystallised Funds Pension Lump Sum (UFPLS).

Each time you withdraw from your pension, it'll be a mix of tax-free cash and taxable money at the same time. Up to 25% will be tax-free; the other 75% will be taxed.

How individual lump sum works

Work out how much you need to live on

Your pension has to last a long time, so it's essential to consider your needs before you decide how to withdraw

Withdrawing your money

You tell us how much you want to withdraw from your pension. You could withdraw some or all of your pension; it's up to you.

Unlike some providers, we do not have a minimum withdrawal amount, so you can take your pension in as many amounts as you want.

Whatever you withdraw will always be a mix of up to 25% tax-free and 75% taxed.

We'll automatically deduct any tax you owe via PAYE and pay it to HMRC.

Money Purchase Annual Allowance

Taking a lump sum will trigger the Money Purchase Annual Allowance, which will reduce how much you're allowed to pay into pensions from £60,000 to £10,000 per year.

Your remaining pension

If there's money left in your pension after your withdrawal, it'll remain invested. 

A simple example

If you have a pension of £100,000

And you decide to take out £40,000

Then it’ll be a mix of tax-free cash and taxable money at the same time so £10,000 will be tax-free and £30,000 will be taxable.

A pie chart showing tax-free cash, taxed as income and remaining pension pot untouched
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How much tax you might pay

You can usually take 25% of your pension tax-free. Any money you withdraw from the remaining 75%, will be added to any other income you have for that tax year.

You will pay tax on your lump sum if it is more than your personal allowance. How much depends on your total income for that tax year. HMRC has guidance on the tax you might pay.

Your first payment will likely put you on an emergency tax code. HMRC needs to provide us with your tax code before we can tax you correctly. You do not need to contact HMRC to change the tax code, but you can claim a refund on the tax you overpaid.

Advantages and disadvantages of individual lump sums

you can take all your pension pot in one go or a series of smaller lump sums. Saving some of your tax-free cash to access later on

you can spread your tax liability over years by taking small lump sums

a simple way to access tax-free cash and taxable income at the same time

it lets you delay big pension decisions – if you have not yet decided how to access your pension in the long term, you can take lump sums in the meantime

How to apply for individual lump sums (UFPLS)

1. Book a call

Log in to your account and book a call with our pension specialists to discuss your options. Submit a request for the withdrawal you want via your account.

2. Get an illustration

We'll create an illustration to show you how your withdrawal could impact your savings.

3. Review and agree

Review your illustration and book another call with our retirement consultants to complete the final steps.

4. Receive payment

Once you've told us you are happy to proceed, we'll process your pension withdrawal to your bank account. You'll receive your pension withdrawal within 10 working days.

Why choose us?

Low cost

Our account fee is just 0.15% and capped at £375 a year. With free withdrawals and no extra charges it means you keep more of your returns.

No minimum withdrawal amounts

Unlike some providers we do not have a minimum withdrawal amount, so you can take your tax-free cash in lots of smaller chunks if you want to.

UK-based support

Our pension specialists are on hand to help, no matter what the question.

Things to consider

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