UFPLS (Uncrystallised Funds Pension Lump Sum)
Taking a lump sum directly from your pension pot without first designating it for drawdown. 25% is tax-free and 75% is taxed as income.
UFPLS is one of several ways to access your DC pension from age 55 (57 from 2028). You take a chunk of the pot as a single payment — 25% of the amount is tax-free and the remaining 75% is added to your taxable income for that year.
UFPLS differs from drawdown in that the money is taken directly from uncrystallised (undesignated) funds. Taking a UFPLS triggers the MPAA, reducing your future annual allowance to £10,000. HMRC often applies emergency tax on UFPLS payments using a Month 1 basis, meaning you may be overtaxed initially and need to reclaim via form P55.
Taking a £40,000 UFPLS: £10,000 is tax-free, £30,000 is taxable. If you have no other income, tax on the £30,000 = around £3,486 (after personal allowance). Net received: ~£36,514.
This calculator provides estimates based on 2025/26 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.