Take your pension in smaller amounts over time
Explore the key information about taking a smaller amount from your pension.
Taking your pension money a bit at a time
You can take smaller lump sums when you need them. This option is sometimes known as a ‘partial uncrystallised funds pension lump sum’ (or UFPLS). We’ll explain how this works with People’s Pension and what to consider before choosing this option.
How to take smaller amounts with People’s Pension
You can start taking your pension money from age 55 (57 from 2028).
What you need to know:
- You’ll need to have saved at least £10,000 (or £2,000 if you’ve already started taking money).
- You can take only one amount per month.
- You’ll need to take at least £2,000 each time.
Other pension providers may have different rules.
Some people use this option to help with unexpected living costs, but it’s important to think about how taking money now could affect your future savings. With £20,000 of savings, you could withdraw £3,000 as a one-off and leave the remaining £17,000 to continue growing in your pension.
How much tax you’ll pay when you take your money
You’ll be able to take 25% of your money tax free, and the remaining 75% will be taxable. So, if you take £2,000, £500 will be tax free and £1,500 will count as taxable income.
Taking a larger amount at once could push you into a higher tax band for that year, meaning you might pay more tax on your income overall. And after you take the first smaller amount from your pension, the tax relief on your savings will be affected. Find out more about tax when you take your pension money.
Is taking smaller amounts right for you?
Explore guidance and information about all your options to see if this is the right one for you.
Other ways to flexibly access your pension money
If you have a smaller amount saved – for example, around £230,000 or less – you may be considering taking all your savings at once. Learn about taking all your money in one go.
With enough saved, you might be able to take your 25% tax-free amount and turn what’s left into a regular income. Read more about setting up a regular income.
How to take your pension money
You can go through the process in your online account. It takes about 15 minutes to complete.
It helps to have a few details to hand
- Details of any other pensions you’ve taken money from, and how much.
- Information about any means-tested benefits you receive.
- Whether you’ve registered for lifetime allowance protection.
- Your bank account details.
Just so you know
When you want to take money from your pension, we may need to carry out a few extra checks to keep your savings safe. This can include confirming your identity electronically or asking for supporting information. These steps help protect you from fraud, and having your details ready can save you time.
