What is an Uncrystallised Funds Pension Lump Sum?

Due to changes in pension legislation regarding the pension freedom rules, it is now possible to take your entire pension pot as a lump sum.

+ Pros

This options provides you with a one off lump sum where you can choose what you wish to do with your funds. This could be towards anything you want, a holiday, paying off the mortgage etc.

Cons

Whilst it may sound nice to take all your money out, there are certain things to consider like, where is your income in retirement going to come from as you have taken all the funds out? Depending on the size of your pension pot, any amount over the tax free element will be added to your income for that year and taxed at your highest marginal rate so you may not get back what you think.