Pension drawdown glossary
A way to cash in a pension worth £10,000 or less in one go. You can take up to three from personal pensions in your lifetime; different limits apply to workplace schemes. Usually 25% is tax-free, and unlike a UFPLS it does not trigger the Money Purchase Annual Allowance.
Source: HMRC Pensions Tax Manual PTM063700: small pension payments · Last reviewed 24 September 2026
See every term in the A–Z glossary. Definitions are general information for the 2026/27 tax year, not personal advice.
Important: The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and benefits depend on individual circumstances. This is not financial advice.