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Using DC savings, such as your Investment Builder pot

Find out what you can do with any DC savings you have with USS

Your Investment Builder and your Money Purchase AVC (MPAVC) pots, if you have them, are defined contribution (DC) pension savings. They work alongside your Retirement Income Builder benefits, the defined benefit (DB) part. You can take your DC savings in a variety of ways, giving you the flexibility to use them in a way that suits you. And you don’t have to wait until you retire to do so.

Before making any decisions about what to do with your pension savings, we recommend that you seek guidance and/or take financial advice. Visit the guidance and financial advice page, to find resources to support your planning and information on how to find a financial adviser.

In most cases, you can start using your DC pot from age 55 onwards (rising to 57 in 2028), but some of the options trigger the Money Purchase Annual Allowance, which limits the total amount of DC pension savings that you and your employer can make each year.

Options for using your defined contribution pension savings, like those in the Investment Builder

You could:

  • take your savings as tax-free cash (subject to limits).
  • leave them invested and withdraw up to four cash payments each year without having to retire.
  • move your Investment Builder savings to a drawdown product, where you can take money from it as and when you need, while it’s still invested.
  • use it to provide you with a guaranteed pension income by purchasing an annuity. You can do this alongside taking your pension from the Retirement Income Builder, to boost the income you’ll get when you retire.

It’s a good idea to get an estimate of the income you’ll get when you retire from the Retirement Income Builder, the defined benefit part, using our Benefit Illustrator. Then you can consider how your savings in both parts might work together and what options might be best for your future plans, whether that’s topping up your retirement income or something more flexible to suit you.

Read more about each option below.

Use your pot to buy a guaranteed income for life – known as an annuity – and take part of it as tax-free cash

An annuity gives you a regular guaranteed retirement income for the rest of your life. Watch the video to find out more.

Getting the right annuity for you

MoneyHelper, the free guidance and advice portal set up by the government, has lots of information about finding an annuity, including a market comparison tool.

As a member of USS, you also have access to the guided annuity service provided by HUB Financial Solutions Limited*. It’s designed to help you understand the annuity options available, and search the market to find the annuity you want. Find out more on their website.

*The services provided by HUB Financial Solutions Limited are not free of charge.

If you wish to get specific financial advice contact a financial adviser.

Use your pot to provide a flexible retirement income with flexi-access drawdown

Flexible retirement income, also known as flexi-access drawdown or just drawdown, is a way of taking money out of your DC pot to live on in later life. Watch our video to find out more.

Getting a drawdown product to meet your needs

MoneyHelper, the free guidance and advice portal set up by the government, has lots of information about finding a drawdown provider.

As a member of USS you have exclusive access to a drawdown product provided by LifeSight. Find out more about LifeSight and see the important information about LifeSight below.

To get tailored advice on flexi-access drawdown and other options for using your Investment Builder savings, contact a financial adviser.

Take your Investment Builder pot as cash

You can take all of your Investment Builder pot as a cash payment (known as an UFPLS) any time from age 55 onwards (rising to 57 in 2028). There is no minimum amount and no charge.

If you don’t want to use your whole Investment Builder pot at once, you could take up to four cash payments each year (partial UFPLS) of at least £2,000 each, and leave the rest invested, where it could continue to grow (the value of your pot could also go down). For each cash payment you take, the first 25% is normally tax-free and the rest counts as taxable income.

This is only available for Investment Builder pots, but you can move any MPAVCs to the Investment Builder at any time before taking any benefits from your MPAVC pot.

If you take a cash payment from a defined contribution (DC) scheme like the Investment Builder, it will trigger the Money Purchase Annual Allowance. Read our UFPLS factsheet to find out more about full and partial UFPLS.

Taking an UFPLS

  1. First we recommend you seek guidance or financial advice before making any decisions, to make sure UFPLS is right for you.
  2. Read our UFPLS factsheet before taking an UFPLS and see the important information at the bottom of this page.
  3. To take UFPLS, you’ll need to complete the relevant form.

Take your whole pot as tax-free cash

You can usually take up to 25% of the overall value of your benefits and savings as tax-free cash at retirement. And if you take both your Retirement Income Builder benefits and Investment Builder savings together, you can usually take all of your Investment Builder pot as tax-free cash (depending on the size of your pot). If your Investment Builder savings make up more than up 25% of the overall value of your benefits at retirement, you can still take some as tax-free cash and the rest can be taken using one of the other options on this page.

You don’t have to take your Investment Builder savings at the same time as your Retirement Income Builder benefits, and if you take them separately using one of the other options on this page, then up to 25% of your Investment Builder savings can still usually be taken as tax-free cash.

Find out more about taking your benefits and savings.

You should consider whether this option is appropriate for your needs. You can find out how to access guidance and financial advice on our guidance and financial advice page. You can also get financial guidance or advice from your own financial adviser or another appropriately qualified and authorised firm.

Leave your pot invested

You don’t have to take your Investment Builder pot at the same time as you start taking your Retirement Income Builder pension. You can leave any Investment Builder and MPAVC pots you have invested until you’re ready to use them. Your Investment Builder savings will continue to be managed by our team of experts, if we’re managing them for you.

If you leave your pot invested, make sure you:

  • review and update your investment choices in the Investment Builder to make sure they’re right for you
  • update your Target Retirement Age so we know when to move your investments, if we’re managing them for your, and when to get in touch about your options.

See our investment guide for more information.

See the value of your USS benefits

You can see your Investment Builder savings, and what you’ve built up in the Retirement Income Builder, at any time in My USS. To find out the value of any MPAVCs you may have, contact Prudential or log in to the Pru-Retire site.

Our Benefit Illustrator will then help you estimate the value of your future benefits and savings at retirement, so you can see if you’re on track.

Important information

The information contained on this page is for general guidance only and does not constitute advice. It is not a legal document and does not explain all situations or eventualities. USS is governed by a trust deed and rules and if there is any difference between this publication and the trust deed and rules the latter prevails. Members are advised to check with their employer contact for the latest information regarding the scheme, and any changes that may have occurred to its rules and benefits. For a glossary of our terms please see more information on our important information page.

Updated: 30 June 2022