Glossary · UK
What is Uncrystallised Funds Pension Lump Sum (UFPLS)?
A pension withdrawal where 25% is tax-free and 75% is taxed as income, taken without entering drawdown.
Full Definition
An UFPLS is a one-off (or repeated) withdrawal from a defined contribution pension where 25% of the amount drawn is paid tax-free and 75% is taxed at your marginal income tax rate for that year. It avoids the formality of designating funds into flexi-access drawdown. UFPLS counts towards your Lump Sum Allowance (£268,275 in 2025/26 for the 25% tax-free portion). Triggering an UFPLS containing taxable income activates the £10,000 Money Purchase Annual Allowance, limiting further DC contributions. UFPLS payments are often taxed using Month 1 emergency code initially — overpaid tax is reclaimable via P55 or P53Z.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.