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Can I decide how I take my pension benefits and how much?

A Liberty SIPP offers full flexibility on how you take your pension. There are two ways you can take retirement income once you reach age 55, flexi access drawdown (FAD) and uncrystallised funds pension lump sums (UFPLS).


Flexi Access Drawdown (FAD) is a brand new way to take retirement income from a pension. It gives you full flexibility on how much you would like to take per month, per year or ad-hoc. One of the main benefits of FAD is that you can keep your pension invested whilst drawing down income.

You can split flexi access drawdown into 2 parts:

  1. Tax free cash (usually 25%);
  2. Taxable income (usually the remaining 75%).

When you start drawdown you get the option to take 25% completely tax free. This is usually paid out to you when you commence drawdown. This is known as the Pension Commencement Lump Sum (PCLS).

After you have taken your lump sum you have the option to take as much of the remaining 75% as you’d like – but you will pay your marginal rate of tax on each income payment. If you took a large amount of taxable income in a single tax year it could push you up to a higher rate of income tax, especially if you haven’t fully retired and are still working.


Another new option for taking money out of your pension will be the ability to take flexible lump sums from all or part of your pension pot that hasn’t been used for drawdown. These will be known as Uncrystallised Funds Pension Lump Sum (UFPLS).

They will work like this…

This works differently to flexi access drawdown as each UFPLS payment has an element which is tax free (25%).


Please note the value of investments, and any income from them can go down as well as up and you may not get back your original investment. We do not offer advice about the suitability of our products or any investments held within them. Should you require financial advice you should consult a suitably qualified financial adviser


Making sense of YOUR pension

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