At present, Freetrade only offers uncrystallised funds pension lump sums (UFPLS), but other options are available to consider when deciding how to access your pension funds.
- Use your pension fund to get a guaranteed income for life, also known as a lifetime annuity. The income is taxable, but you can choose to take up to 25% of your fund as a one-off tax-free lump sum at the outset.
- Use your pension fund to provide a flexible retirement income, also known as flexi-access drawdown. Normally you can choose to take up to 25% of your fund as a one-off tax-free lump sum. The rest of your fund is then held in your pension plan to draw out as taxed income as and when you like and whatever amount you like, including setting up regular payments, until it has all gone. You still have the option to get a lifetime annuity with the remaining pension fund at any time.
- Take a lump sum. You can take a lump sum from your pension fund when you like for any amount you like. Normally the first 25% of each lump sum payment will be tax-free and the rest will be taxed.
- Mix your options. Choose any combination of the above, at the same time or at different times, using different parts of your pension fund.
Currently you will have to transfer your Freetrade pension fund to another provider if you want to take money from your pension as an income, known as a drawdown, or to convert it to an annuity.
Before you withdraw money from your pension fund using UFPLS, you should think about whether it’s right for your personal circumstances, including the tax impact of taking UFPLS payments. If you’re not sure, please take advice from a suitably qualified financial adviser.
