There are two ways that you can take your Account as cash.
- You can take the entire value of your Account as a cash lump sum (known as an Uncrystallised Funds Pension Lump Sum (UFPLS)). Although the first 25% of this sum will be tax-free, the rest will be taxed. You will need to check the value of your Account and other taxable earnings (salary, other pensions etc.) in that tax year, as it may mean that you end up with a very large tax bill. You can use the Spending Planner tool, available in your online LifeSight Account, to help you estimate this. The Spending Planner tool lets you model different retirement scenarios, including taking your cash lump sum, to help you understand how best to provide an income in retirement.
- A partial UFPLS is where you can choose to keep your Account invested in the Scheme and access your cash lump sum over two consecutive tax years (up to the age of 75).
If you choose one of these two options, the maximum amount you can pay into any pension arrangement and receive tax relief on will be reduced (see Contribution limits for more information). If you decide to take your Account as cash, you will need to carefully consider if you will have enough other sources of income to fund your retirement.