Using DC savings, such as your Investment Builder pot
Find out what you can do with any DC savings you have with USS
What are the savings pots?
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.
See the value of your USS benefits
You can check if you have any Investment Builder savings by logging into My USS and checking your Investment Builder pot. If you don’t have DC savings, it will state this in My USS.
You can see your Investment Builder savings, and what you’ve built up in the Retirement Income Builder, at any time in My USS. Our Benefit Calculator can help you estimate the value of your future USS benefits and savings at retirement, so you can get an idea about different options you might want to consider and see if you’re on track.
Before making any decisions about what to do with your pension savings, you should seek guidance on the options and/or take independent financial advice to understand which options might be right for you. Find out more on our guidance page. You can also register for our Understanding DC – taking savings from the Investment Builder to find out more.
In most cases, you can start using your DC pot from age 55 onwards (rising to 57 in 2028 for certain members).
Options for using your defined contribution pension savings, like those in the Investment Builder
purchase an annuity to provide you with a guaranteed pension income. You can do this in addition to taking your pension from the Retirement Income Builder, to boost the income you’ll get when you retire.
You can use the Benefit Calculator in My USS to explore your options with your DB and DC savings and get an estimate of what they could give you in tax-free cash or annual income. Then you can consider how both your DB pension and DC savings might work together to suit your future plans. You can also look at DC only options if you wish to.
Read more about each option below.
Take your whole pot as tax-free cash when you take your USS retirement benefits
You can usually take up to 25% of the overall value of your benefits and savings as tax-free cash at retirement. As such, 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 and your available Lump Sum Allowance). 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 available to you.
However, you don’t have to take your Investment Builder savings at the same time as your Retirement Income Builder benefits. If you take them separately using one of the other options available to you, then up to 25% of your Investment Builder savings can still usually be taken as tax-free cash.
You should consider whether this option is appropriate for your needs by taking guidance or financial advice. You can access guidance and information on how to find a financial adviser that is right for you 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.
Take your Investment Builder pot as cash without having to take your retirement benefits
You can take some or 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 for certain members). There is no charge if you take this with USS. A minimum cash payment withdrawal must be £2,000 - if your whole Investment Builder pot is less than this you can take the entirety in one cash payment.
If you don’t want to use your whole Investment Builder pot at once, you could take up to four cash payments each year (known as a 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.
If your entire Investment Builder is under £2,000, you can take this all at once.
This is only available for Investment Builder pots, but you can move any MPAVCs you may have with Prudential to the Investment Builder at any time before you start taking 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, which limits the total amount of future DC pension savings that you and your employer can make each tax year.
Taking an UFPLS
First we recommend you seek independent guidance or financial advice before making any decisions, to make sure UFPLS is right for you.
Read our UFPLS factsheet before taking an UFPLS and see the important information at the bottom of this page.
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.
You can take up to 25% of your pot as a single, tax-free cash sum. The remainder is invested to give you a regular, income which is not taxed until you take that income.
You can adjust the income you take and when you take it – so unlike UFPLS where you access the amount that is part tax free and the part subject to income tax, with drawdown you could decide to just receive the tax-free cash part, and take the remaining 75% of the drawdown pot that would be subject to income tax, at a later date. Taking income triggers the MPAA and limits what you can contribute to Investment Builder or another DC scheme so until you take any income, the MPAA is not triggered.
You can mix and match - taking some cash and some pension when you want. This is called phased drawdown.
The flexi-access drawdown option is not available directly through USS and you would need to transfer your DC pot to an alternative drawdown provider.
MoneyHelper is the free guidance portal set up by the government. It has lots of information about finding a drawdown provider available for you to help make the right decision for you.
As a member of USS you have exclusive access to a drawdown product provided by LifeSight. Find out more about LifeSight.
You would not ordinarily be able to access LifeSight in an individual capacity but can do so as a member of USS. However, any services you decide to receive from LifeSight are not the responsibility of USS. USS’s role is limited to signposting members to the service provided by LifeSight. USS will not be liable for any loss or damage arising out of or in connection with your use of any of the services provided by LifeSight and/or your failure to access the services (including any guidance or recommendation that LifeSight may give you). USS is not responsible for the content of LifeSight’s website.
If you decide to use LifeSight, you can use the details on this website to contact them. You are also free to find a different provider that offers drawdown products, and you are under no obligation to use the services provided by LifeSight. If you choose to use LifeSight or another provider, you will need to enter into a separate agreement with them.
Before choosing LifeSight or any other drawdown provider, you should consider whether it 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.
USS may withdraw or suspend its signposting of members to the services provided by LifeSight at any time without prior warning to members and users of these services.
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. You can do this in addition to taking your pension from the Retirement Income Builder (defined benefit), to boost the income you’ll get when you retire.
An annuity still allows you to access your tax-free cash and then also buy a guaranteed income for either a short term or for life. The guaranteed income may be higher than the scheme if you have specific ill health that shortens your life expectancy.
You can tailor your income to your circumstances. For example, your USS (scheme) pension has a spouse or civil partner’s pension built in. This means if you die before they do, they will receive a pension for the rest of their lives, usually around half the standard pension as shown in your quote, increased in line with inflation (subject to certain caps). If you don’t need this, you could set up an annuity in your name only, which may then pay you a higher income as it would cease on your death without any future payments to your spouse.
You may lose valuable spouses benefits and inflation protection that come automatically with the scheme pension.
Unless you take out a short-term annuity, once set up the annuity cannot be cancelled or have its original basis changed.
The annuity option is not available directly from USS and you would need to transfer your DC pot to an alternative annuity provider.
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 the HUB Financial Solutions Limited website.
*The services provided by HUB Financial Solutions Limited are not free of charge.
The services provided by HUB Financial Solutions Limited are not free of charge. Any services you decide to receive from HUB Financial Solutions Limited are not the responsibility of USS. USS’s role is limited to signposting members to the independent third-party guided annuity service provided by HUB Financial Solutions Limited. USS will not be liable for any loss or damage arising out of or in connection with your use of any of the services provided by HUB Financial Solutions Limited and/or your failure to access the services (including any guidance or recommendation that HUB Financial Solutions Limited may give you). USS is not responsible for the content of HUB Financial Solutions Limited’s website.
If you decide to use HUB Financial Solutions Limited, you can use the details on this website to contact them. You are also free to find your own annuity, and you are under no obligation to use the services provided by HUB Financial Solutions Limited. You can also use a different provider that offers guidance and/or advice on annuity products. If you choose to use HUB Financial Solutions Limited or another provider, you will need to enter into a separate agreement with them.
Before using the HUB Financial Solutions Limited guided annuity service, you should consider whether it 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.
USS may withdraw or suspend its signposting of members to the services provided by HUB Financial Solutions Limited at any time without prior warning to members and users of these services.
Find out more about HUB Financial Solutions Limited, the service it provides to USS members and the costs that may be applicable.
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. You can see how your Investment Builder is invested by logging in to My USS.
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
review and 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 on the different funds available to invest your DC pot in.
Important information
You can transfer your Investment Builder savings at any time to one or more registered pension providers. Different pension providers offer different options with varied features, rates of payment, charges and tax implications.
There may be tax implications associated with accessing your pension savings from the Investment Builder, such as the Money Purchase Annual Allowance.
Your pension is taxable just like a regular income. The rate at which it is taxed depends on the amount of income you receive from your pension and other sources. Find out more in our pension tax section.
Subject to certain exemptions, if you apply to access or transfer your Investment Builder and/or MPAVC savings, or if you contact us about an application, we’re required by law to direct you to Pension Wise guidance. This is called the ‘Stronger Nudge’ and it’s the law for schemes like USS, that provide a defined contribution part to members.
Pension Wise is a government service from MoneyHelper that offers free, impartial pensions guidance about your defined contribution options.
We can’t proceed with your application, until you tell us that you’ve either received Pension Wise guidance or have opted out of receiving it by providing an opt out notification to us.
For more information and instructions on what to do next, see the Stronger Nudge notice.
We're not responsible for any services or products you receive from a third party. USS’s role is limited to signposting members to third parties and, where relevant, transferring your benefits in accordance with the Scheme Rules.
If you're considering a material financial decision in relation to your USS benefits, we recommend you seek financial advice.
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.