Uncrystallised means pension savings you haven’t yet moved into drawdown or used to buy an annuity. A UFPLS takes money straight out of them, and each payment is normally split the same way: 25% tax-free and 75% taxed as income. Whatever you leave stays invested.

That fixed split is the difference from flexi-access drawdown, where the tax-free cash and the taxable income are separate decisions. The first UFPLS payment cuts what you can pay into a defined contribution pension to £10,000 a year. For most people the tax-free quarter is capped at £268,275 across all their pensions, and anything above that is taxed as income instead.