UFPLS v Drawdown

shinytop

No. Hopefully the first example illustrates how tax free cash is tied to the taxable income. You can take tax free cash without taking taxable income but your options are more limited the other way around. To simplify massively, to generate X in taxable income from a currently uncrystallised pension you have to take at least X/3 in tax-free cash. But you can generate X in tax-free cash without taking any taxable income.

You can of course just put the surplus tax free cash into ISAs or other investments. In the above examples you could even put it back into a pension - people without any earned income can contribute £2,880 net and still get tax relief, and tax-free cash recycling rules won't apply as the numbers are too small.

thanks, that's very helpful, I'm starting to understand now (I think).

Why a £6,250 UFPLS?

umm did my sums wrong