I was going to claim a small pot lump sum but the fund value has just gone over £10,000. What can I do?

Under the rules, a small pot lump sum must be £10,000 or less. If it’s over £10,000, you could take a flexible lump sum (HM Revenue & Customs refer to this as an uncrystallised funds pension lump sum or UFPLS). The UFPLS claim pack will make you aware of the difference between this and a small pot lump sum eg a UFPLS will reduce the amount you can pay into your pension each year to £10,000 (known as the money purchase annual allowance), whilst taking a small pot lump sum will maintain your £60,000 annual allowance.

Remember that if you take a UFPLS:

  • You need to have a minimum pension pot of £10,000 when you take your first lump sum (or £2,000 if you’ve already taken money before)
  • each lump sum you take must be a minimum of £2,000 (or the rest of your savings in your pension pot if lower)

Find out more about taking your pension pot all in one go through a small pot lump sum or UFPLS

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