DB Pension and UFPLS

Employee123

I have a DB pension that can be taken at 55 which will pay a lump sum and an annual income of £8000.00 which I intend to take in the 2025/2026 tax year. What is the maximum I can also take from my DC pension before I start to pay tax. Personal allowance of £12570.00 less £8000.00 leaves £4570.00 of personal allowance. Would the maximum UFPLS i can take be £4570.00 + 25% tax free so £5712.50 giving a tax free income for the year of £13712.50?

Mark_d

looks correct to me

Albermarle

No it is not correct.

A UFPLS payments is 25% tax free and 75% taxable .
If the taxable part is £4570 , then the tax free part will be one third of that = £1523.
So in total you can take a UFPLS payment of £1523 + £4570 = £6093.