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Is This the Best Way to Take Your Pension Income? | Phased Drawdown vs UFPLS

Dianne Sullivan

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A lot of people say phased drawdown is just another way of doing UFPLS.
And on the surface… it does look very similar.
In this video, I walk through how phased drawdown actually works, where it can replicate UFPLS, and — more importantly — where the differences really matter.
Because this isn’t just a technical detail.
The way you take income from your pension can have a long-term impact on:
how much tax you pay
how your investments grow
and how much flexibility you have later in retirement
We cover:
How UFPLS works in practice
What “phased crystallisation” (phased drawdown) actually means
Why the two approaches can look the same — but behave differently
The key trade-off around tax-free cash and timing
Why your pension staying uncrystallised for longer can matter
This is one of those areas where small decisions can have a surprisingly big impact over time — so it’s worth understanding properly before you choose an approach.

timestamps
0:00 intro
0:39 The problem with UFPLS
1:38 Phased Crystallisation
3:12 PHASED DRAWDOWN IS NOT SAME AS TRUE AUTOMATED UFPLS
6:06 TIMING OF TAX-FREE CASH
7:39 PLATFORM LIMITATIONS
9:02 SIMPLE COMPARISON

20 Comments

@rh3223 5 months ago

Brilliant, always the best information presented with clarity and a total lack of YouTube hyperbole. Thankyou.

@MrKlawUK 5 months ago

it would be good to get a list of providers that do provide more flexible tools. these days transferring is pretty simple - I’d be happy to set up a SIPP with a provider that offers automatic regular UFPLS (as long as it has decent fund choice and fees of course) and then transfer my main pot into that prior to retirement

@nonsuch9301 5 months ago

Why on earth does it have to be this complicated ?

@TheBubblewrapboy 5 months ago

Excellent explanation 👍

@abih724 5 months ago

I’m here from Lauren The Insider. You are exactly the right help at the right time for me! I’m so glad to have found your channel. Thank you for sharing this information.

@jamesuk3896 5 months ago

The clearest explanation I’ve heard, thank you.

@MsWoodgnome 4 weeks ago

That was excellent. I didn't understand it 4 monthsago but now I have tried to get some pension money from a provider it makes pefect sense. Well done on your non financial advisor advice!

@MrKlawUK 4 months ago

so closest to UFPLS is likely to be:
- crystallise a year’s income need.
- set up a regular payment from the crystallised portion in drawdown (taxed as income)
- put the PCLS into an ISA and draw a portion each month alongside the drawdown. Likely manual but fast if the ISA has good online servicing
- if the ISA is held in S&S with same profile as your pension it would still grow equivalent to an automated UFPLS although I assume most would keep it in cash for stability as its needed for income

@SuperCatbert 5 months ago

Well done for explaining this so well

@guywilkinson 5 months ago

Thank you Diane, I will have to watch that a 3rd time after I have checked out my provider.

@paulrea7673 4 months ago

I wish I could make an appointment with this lady , she makes so much sense

@dannywest8172 5 months ago

Very helpful video. I am close to drawing mu pension and all advice from you will make my decision easier.

@JulianSiedlecki-de2nn 3 weeks ago

Interesting, but like many other commentaries this is explained in isolation without regard to the other tax vehicle, ISAs
If you crystalize £80k then you receive £20k tax free. The observation is that one has fixed the £20k tax free, however, if that £20k is then put in an ISA and maybe even invested in the same fund, then it also would continue to grow (or shrink) tax free.
Also in an ISA it can simplify IHT with the new pension/IHT rules coming in next tax year. Also may reduce the tax tax burden for the beneficiaries.

@FingerstyleFumblings 5 months ago (edited)

My experience with doing UFPLS has convinced me to only use FAD in future. The problem is more with HMRC than with the pension provider (ii in this case). The taxable part of the UFPLS was taxed as if it were monthly income (which I expected), but after reclaiming the tax from HMRC I was then given a BR tax code (not expected). Consequently, all further drawdown withdrawals had 20% tax deducted, ignoring my remaining personal allowance and resulting in an overpayment of tax for TY25/26 which I won't get refunded for several months yet 😞.

My conclusion is that automating a regular monthly FAD withdrawal is best because HMRC treats it like regular income from a job and the personal allowance is applied via the normal 1257L tax code. I still have to manually manage periodic crystallizations to take additional PCLS and ensure sufficient drawdown funds, but that can be less frequently e.g. yearly.

@rogergale3297 3 weeks ago

Brilliant advice as always....thank-you

@Rick-w5c1f 5 months ago

Why do the government and pension providers make it so complicated and difficult to gain access to what is in effect your money? :(

@yungee3921 5 months ago

I mean, I guess that's why they use the relatively obscure word "crystalisation", ie it is now a fixed and inflexible locked-in structure.

@sid35gb 3 months ago

If you’re affected by the pension age change in 2028 then phased flexi access drawdown is your only option because UFPLS will be blocked until you hit 57. Having looked at this I only want to do quarterly crystallisation with the exception of the period where I’m affected by the pension age changes in 2028 where I will have to crystallise more to cover the period where uncrystallised funds are blocked. So phased works for me and reduces complexity.