Pension Commencement Lump Sum (PCLS)
This is an amount that can be drawn from a pension fund tax free; previously known as "tax free cash". This is typically 25% of the value of the pension fund although there are some scenarios where more or less than 25% may be drawn.
It is not necessary to draw the entire 25% tax free cash entitlement in one go; if a pension is sufficiently flexible, it is possible to draw the tax free cash in phases over a period of time.
See also Crystalisation.
2 November 2022 at 08:24:26
This glossary definition has been deliberately kept as simple as possible to give a brief outline of the term to assist with general financial knowledge. It is not intended to give a detailed explanation. Please refer to our Legal Declarations.