FAQ
Is the 25% tax-free lump sum included?
By default Oakspan takes 25% tax-free cash at retirement, capped at the £268,275 lump sum allowance. Turn the switch off to model UFPLS instead.
By default, yes. The switch Take 25% tax-free cash at retirement is on. At the retirement age you set, Oakspan crystallises the pot, pays out 25% as a pension commencement lump sum, and leaves the other 75% invested for drawdown.
That lump sum is capped at the lump sum allowance of £268,275 for 2026/27. If 25% of the pot would be more than that, the model pays £268,275 and flags the cap. The excess stays in the invested fund. Protected lump-sum rights above the allowance are not modelled.
Leaving the switch off: UFPLS
Turn the switch off and Oakspan does not take a lump sum at retirement. Each withdrawal is treated as an uncrystallised funds pension lump sum: 25% tax-free and 75% taxed as income. The results label changes from a lump sum at retirement to “modelled as UFPLS instead”.
That is a simplification. The calculator does not track a running total of UFPLS tax-free amounts against the lump sum allowance across many years, and it does not model a mix of a partial lump sum plus later UFPLS. If your plan is more tangled than one of those two patterns, treat the tax-free figure as a sketch.
Why it changes how long the pot lasts
Taking the cash up front shrinks the invested pot, so the same income runs out sooner. It can still be the right choice if you have a debt, a house project or a cash reserve you would rather hold outside the pension. Leaving the money invested keeps more capital compounding, but the income you later draw is taxable except for the UFPLS slice.
The normal minimum pension age is 55, rising to 57 from 6 April 2028. Oakspan will still run a projection if you set an earlier retirement age, and it will warn you. Most schemes cannot pay the lump sum before that age.
Compare both switches on the calculator. The allowance itself is listed on the 2026/27 rates page.
Keep reading
- Previous: Does the calculator include the State Pension?
- Next: What tax year do the figures use?
- Try the numbers on the private pension calculator.
- Read the pension guide and the 2026/27 rates.