UFPLS Pension taken in March

Dekkoblue

Hi, I'm thinking of taking my annual UFPLS withdrawal of £16500, in March 2027, and I'm hoping to avoid the P55 Tax reclaim by taking the money after 7th March rather than after April 6th, using nearly my whole years Tax free Allowance.

I wont have any other income for the year, as i can subsidise my income until March 27 with my ISA.

I have been told this is possible if taken after the 6th March, as its 12/12 of the tax year.

Does anyone have experience of this?

I'm With Interactive Investor, and they do have a proper Tax code for me, as i have taken a few small Ufpls payments last tax year (25-26).

Will this strategy work on a ongoing basis?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6670899/ufpls-pension-taken-in-march

What is this "proper" code?

Is it the standard emergency code of 1257L, on a cumulative basis?

Dekkoblue

Yes, 1257L Cumulative

mrklaw

hoping this is a smooth and simple solution as I’m considering the same just to avoid the emergency tax faff. Only wrinkle being not having a year’s income in an ISA and hesitant to redirect any pension contributions to do that as I want that sweet tax relief..

NoMore

https://forums.moneysavingexpert.com/discussion/comment/82021190#Comment_82021190

do you need to take it as a lump sum ? If you take it as a regular monthly income instead the tax will be sorted out very quickly.

TBH people seem way too concerned about lump sum tax for what in affect would be a little admin to claim some tax back. Changing your strategy to be less tax efficient because of this to me is just insane.

bjorn_toby_wilde

Insane is probably overstating it, but yes, it’s not a lot of hassle to reclaim through your personal tax account.

I took a UFPLS on 10th March and was taxed on the emergency tax code so that wheeze didn’t work for me. I took a small further payment on 30th and by that time HMRC had supplied a tax code and the provider refunded the overpaid tax from the first UFPLS.

mrklaw

so a few months cash buffer to cover admin delays and set up FAD autopay if I can figure it out?

Dekkoblue

Thanks for the reply's. I find it easier to manage my expenses yearly, rather than monthly, so thats the motivation.

I noticed one other post above had the emergency tax code applied on the UFPLS withdrawal on March 10th.

This is why I'm asking for anyone else who has tried this approach, and has it worked for them?

I know i can use FAD, and it does work, it is relatively easy to set up, but one yearly payment without the tax reclaim would be perfect for me.

I am told it is possible, but again i need to find people who actually use it successfully, as this idea may only be a myth.

Thanks again.

NoMore

It should work, the problem is guaranteeing it will work with any particular provider.

You can only try it and be prepared to accept you may have to wait to get the tax back if it doesn't work as expected.

Dekkoblue

https://forums.moneysavingexpert.com/discussion/comment/82021655#Comment_82021655

Yes, I think its begining to look like its going to be a try and see.

Dekkoblue

https://forums.moneysavingexpert.com/discussion/comment/82021659#Comment_82021659

If I could find two or three individuals who use this method sucessfully, with different providers, i would feel much more confident in trying it.

I realise it could fail, and I'm then back to reclaiming the tax using a P55, at least I suppose i tried.