Lump sums (UFPLS)

A flexible way to take your pension income, as and when you need it.

COVID-19 - current market conditions

Making decisions about your SIPP based on short term circumstances - especially at a time of market volatility - can have significant long-term consequences for your financial wellbeing and retirement.

If you access your SIPP benefits now, you might miss out on any increases in value in the future if markets recover. You will receive only the current value of your SIPP investments (which might have fallen recently), and this may be taxable.

If you would like to explore the risks and options in more detail we recommend that you seek the advice of a suitably qualified financial adviser.

What is UFPLS (uncrystallised funds pension lump sum)?

UFPLS is a way of taking lump sums from your pension. It's flexible - you choose how much you want to take each time.

25% of every lump sum is tax-free, while the other 75% is taxed as income. The remaining money in your pension pot is not moved into drawdown – but can be at a later date.

Any part of your pension which has been ‘crystallised’ (moved into drawdown) cannot be taken as an UFPLS. 

How is an UFPLS taxed?

When you take an UFPLS, 25% is tax free and 75% is taxable income. 
For example, taking an UFPLS of £10,000 means that only £7,500 would count as taxable income. The other £2,500 would be tax free.

It is important to understand how the amount of income you take can affect the amount of Income Tax you will pay. Spreading this over several tax years could reduce your tax bill.

For example, taking a large UFPLS could get you close to your tax free personal allowance. Going over that limit would mean you pay income tax on any further income.

UFPLS payments could also raise your taxable income from a basic rate to a higher rate in a single tax year.

One option is to take your pension income in stages and plan according to your circumstances.

ii won't charge you for taking UFPLS or for using any other income withdrawal options.

When can I take an UFPLS? 

You can take an UFPLS as soon as you are able to access benefits from your pension (currently when you turn 55). 

There is no limit to the amount of times you can take lump sums from your pension. As long as you have funds remaining which have not been moved into drawdown, you can take an UFPLS.

What is the difference between UFPLS and drawdown?

Drawdown allows you to keep your money invested while withdrawing money when you need to. Whether you choose drawdown or an UFPLS, you can take 25% of your pension as tax-free cash. 

The following gives an example of each option with a £100,000 pension pot. 

Drawdown (entire fund)

  • Take 25% (£25,000) as tax-free cash.
  • Move remaining 75% (£75,000) into drawdown (taxed as income when withdrawn).

Flexi-access drawdown (part of your fund)

  • Move a portion (eg £20,000) of your pension pot into drawdown.
  • Take 25% (£5,000) of that portion as tax-free cash. The rest (£15,000) goes into drawdown (taxed as income when withdrawn).
  • Remaining pension pot (£80,000) is available to move into drawdown or take as an UFPLS.

UFPLS (uncrystallised)

  • Take a portion (eg £20,000) of your pension as cash.
  • Receive 25% (£5,000) of that portion as tax-free cash. Take 75% (£15,000) as taxed income.
  • Remaining pension pot (£80,000) is available to move into drawdown or take as a UFPLS.

Can I still pay into my pension after taking an UFPLS?

Taking an UFPLS triggers the Money Purchase Annual Allowance (MPAA) which reduces your annual allowance for pension contributions to £4,000.

How to take UFPLS with your ii SIPP

Download and complete a Taking Pensions Benefits form. You will need to do this every time you want to take a lump sum. Please return it to us by secure message from your online account.

After returning the form, it will take around 4 weeks to receive your lump sum.

There is no additional fee for taking lump sums from your pension - it's all covered by your monthly SIPP fee.

Important note
Making decisions about how to use your pension to meet your income requirements is not easy. If you have any questions, we recommend speaking with Pension Wise or an independent financial adviser.


Taking an UFPLS is a benefit crystallisation event (BCE) if you are under 75. A BCE measures the amount of pension benefits an individual has taken against their remaining lifetime allowance (LTA). 

An UFPLS does trigger the MPAA (Money Purchase Annual Allowance). This reduces your annual allowance for pension contributions to £4,000.

If you don’t plan your retirement income carefully, you could run out of money before you die.

We recommend speaking to Pension Wise or an independent financial adviser to help you plan ahead.

Small pots (SIPP value up to £10,000)

If you have a small pension fund worth up to £10,000, you can take this as a lump sum. This does not affect your Lifetime Allowance.

To withdraw a small pot pension, please complete a Taking Pension Benefits form and return by secure message.

Open a SIPP today and pay no SIPP fee for six months

This means your service plan fee of £9.99 covers you for all of your investment accounts. Following the offer period, the ii SIPP fee is only £10 a month more, and could save thousands compared to other pension providers who charge a percentage fee.  Terms apply

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Please remember, SIPPs are aimed at people happy to make their own investment decisions. Investment value can go up or down and you could get back less than you invest. You can normally only access the money from age 55 (57 from 2028). We recommend seeking advice from a suitably qualified financial advisor before making any decisions. Pension and tax rules depend on your circumstances and may change in future.