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UFPLS with the ii SIPP

ii SIPP

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.

At a glance

✔  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. 75% taxed as income.

✔  The money you haven't taken from your pension remains invested.

✔  You must have some lifetime allowance remaining to take UFPLS.

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.

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.

Learn more about UFPLS

The main difference is how you take your tax-free cash, and what that means for the rest of your pension.

  • With UFPLS, 25% of each payment is tax-free. The remaining 75% is taxed as income
  • With drawdown, you can take up to 25% tax-free before you withdraw the rest of your pension.
  • Taking UFPLS triggers the MPAA. This means your annual allowance on contributions falls to £4,000 per year.
  • The tax-free element of drawdown does not trigger the MPAA. Drawdown only triggers the MPAA once you start taking a taxable income.

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.

UFPLS stands for Uncrystallised Funds Pension Lump Sum.

'Crystallisation' is the process of moving funds into drawdown and testing your pension against the Lifetime Allowance. So 'uncrystallised funds' basically means any funds you have not designated for drawdown.

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

open a SIPP   transfer your pension

The ii SIPP is aimed at clients who have sufficient knowledge and experience of investing to make their own investment decisions and want to actively manage their investments. A SIPP is not suitable for every investor. Other types of pensions may be more appropriate. The value of investments made within a SIPP can fall as well as rise and you may end up with a fund at retirement that’s worth less than you invested. You can normally only access the money from age 55 (age 57 from 2028). Prior to making any decision about the suitability of a SIPP, or transferring any existing pension plan(s) into a SIPP we recommend that you seek the advice of a suitably qualified financial adviser. Please note the tax treatment of these products depends on the individual circumstances of each customer and may be subject to change in future.