Help Centre/Tutorials/How to set up your withdrawal strategy

How to set up your withdrawal strategy

2 min read

Summary

Set your withdrawal method (PCLS or UFPLS) and account withdrawal order from the Withdrawals tab.
The engine optimises withdrawals to stay within lower tax bands where possible.
The right order between ISAs and pensions can make a meaningful tax difference over a full retirement.

Steps

1. Go to the Withdrawals tab on your dashboard.

2. Choose your withdrawal method — PCLS (take your tax-free lump sum first) or UFPLS (spread the 25% tax-free portion across every withdrawal).

3. Set your withdrawal order — which accounts to draw from first. Drawing from ISAs before pensions, or vice versa, can make a significant tax difference.

4. Check the tax-optimised order shown on the Withdrawals tab — it lists the sequence the engine draws from (tax-free lump sum, then pension up to your Personal Allowance, then ISA, then remaining pension, then GIA, then cash) so you can see which tax band each pound is likely to land in.

Example scenarios

"Should I draw down my ISA or my pension first?"

Set the withdrawal order to ISA-first, then switch it to pension-first and compare how the sequence changes. The better order depends on your other income and tax bands in a given year — there's no single right answer, so it's worth trying both.

"I want to compare PCLS against UFPLS"

Switch the withdrawal method between PCLS and UFPLS and see how the description of each step changes. PCLS front-loads your tax-free allowance, so early withdrawals look more favourable; UFPLS spreads it out, which can smooth your tax position across more years.

Frequently asked questions

What's the difference between PCLS and UFPLS?

PCLS draws your tax-free lump sum allowance first, so every withdrawal after that is fully taxable. UFPLS spreads the 25% tax-free portion across every withdrawal instead. See Withdrawal strategies: PCLS vs UFPLS for the full breakdown.

Does the withdrawal order actually make a difference?

Yes — drawing from ISAs before pensions, or vice versa, can meaningfully change how much tax you pay over the course of retirement, since the two are taxed differently.