Pension Commencement Lump Sum (PCLS)

Withdrawing from a pension
Key pension facts
Tax

Once you crystallise your pension and start drawing benefits from it, the first thing you can do is normally take out 25% of the money in your pension pot as a tax-free lump sum. This lump sum is known as the Pension Commencement Lump Sum (PCLS) and can be taken if you plan to take an annuity or flexi-access drawdown with the remainder of your pot.

Note that if you take Uncrystallised Funds Pension Lump Sum (UFPLS) there is technically no PCLS but taxation ultimately works similarly because the first 25% of each lump sum you withdraw is tax-free under UFPLS.

See also our retirement planning blog post.

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