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About your workplace pension
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![Is taking out a pensions lump sum a good idea for you? (6) Is taking out a pensions lump sum a good idea for you? (6)](https://i0.wp.com/retirement.fidelity.co.uk/media/filer_public_thumbnails/UK%20Employees/Images/Hero/huge-incubator.jpg__1200x535_q85_subsampling-2.jpg)
Home Access your pension Taking lump sums
You can leave your money in your pension pot and take lump sums from it as and when you need, until your money runs out or you choose another option.
In some cases, the best way to take money out of your pension is to withdraw a series of lump sums over time, instead of taking all the tax-free cash in one go. When you do this, 25% of what you withdraw is free of tax while the other 75% is taxed like any other income you earn. This way, you can make multiple withdrawals.
When you do this, it’s called taking an Uncrystallised Funds Pension Lump Sum (UFPLS for short).
When to consider this
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Calculate tax on withdrawals
Understand how much tax you might have to pay on the money you take from your pension and how it could affect your future retirement income.
Taking lump sums will affect your future contributions
If you think you might want to top up your pension pot in the future, for instance because you want to keep working part time, then you need to be aware that taking money out in lump sums could affect the amount you can pay in and receive tax relief on.
If you take money out in this way, you may only be able to receive tax relief on up to £10,000 a year. If you exceed this figure, you may need to pay tax to HMRC. This is known as the money purchase annual allowance (MPAA).
If you think you’ll want to continue topping up your money purchase pension pot with more than £10,000 a year after you retire, then you may want to consider other options.
Download our MPAA factsheet
Find out more about the money purchase annual allowance and how it could affect you.
The value of investments can go down as well as up, so you may get back less than you invest. Tax treatment and eligibility to invest in a pension depend on personal circ*mstances. All tax rules may change in future.
This information is not a personal recommendation for any particular product, service or course of action. Pension and retirement planning can be complex, so if you are unsure about the suitability of a pension investment, retirement service or any action you need to take, please refer to an authorised financial adviser.
The minimum age you can normally access your pension savings is currently 55, and is due to rise to 57 on 6 April 2028, unless you have a lower protected pension age.
Our Workplace Investing Service Centre can explain what retirement income options are available within your existing pension plan and which are not. They can also refer you to our team of Workplace Investing Service Centre who can provide information on alternative options like retirement advice. Call us on 0800 3 68 68 73, Monday to Friday, 8am to 6pm.Find out more.
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This information is not a personal recommendation for any particular investment, you are responsible for deciding whether an investment is suitable for you. In doing so, please remember that past performance is not a guide to future performance, the performance of funds is not guaranteed and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circ*mstances and tax rules may change in the future. You should regularly review your investment objectives and choices and if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser.
This website is issued by FIL Life Insurance Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales No. 3406905, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP. Fidelity, Fidelity International, the Fidelity International logo and the F symbol are trademarks of FIL Limited.
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