SIPP accounts are currently offered on a Beta basis and are available only to a limited number of users for testing purposes. During this period, features, functionality, and availability may be subject to change or withdrawal without notice.
We will announce when SIPP accounts become available to eligible UK-resident clients of Trading 212 UK Ltd.
An Uncrystallised Funds Pension Lump Sum (UFPLS) allows you to withdraw a portion or all of your SIPP. Typically, 25% of each withdrawal is tax-free, and the remaining 75% is taxed as income.
💡 Example
For a UFPLS withdrawal of £10,000:
- £2,500 would typically be tax-free (25%).
- £7,500 would be subject to income tax at your marginal rate.
Taking an UFPLS is considered a trigger event, meaning the Money Purchase Annual Allowance (MPAA) rules will apply from the day after you take your first UFPLS payment.
What is an Emergency Tax Code?
Your first taxable income withdrawal from a pension is taxed using an emergency tax code. This can sometimes result in more tax being deducted than necessary.
HMRC will apply an emergency tax code because they typically won't have provided us with your up to date tax code for your pension income.
An emergency tax code often assumes that you'll be receiving the same level of payment regularly, which can lead to an over-deduction if it's a one-off payment. Please note this is a HMRC rule, not a Trading 212 Policy.