What is Flexible Drawdown?

Flexible Drawdown

  • With flexible drawdown there is no limit on the amount of drawdown pension you can take each year. You can take as much or as little as you like. There is also no need for your pension fund to be reviewed to work out your maximum possible pension.

However not everyone can take flexible drawdown. You must be getting a minimum amount of secure pension income every year (currently £20,000) to qualify for flexible drawdown. This can include the State Pension and any pension annuity or eligible scheme pension.

  • It does not include any form of personal Purchase Life Annuity, capped drawdown pension or salary/earnings.

Your “Annual Allowance” for contribution purposes is reduced to NIL in the year you make an election for flexible drawdown and each subsequent year. This means that you are not allowed to make pensions contributions or have them made on your behalf in the year of election and each subsequent year. Once you have entered flexible drawdown you cannot revert back to capped drawdown.

  •  If you are already in capped drawdown and you meet the conditions for flexible drawdown pensions you can change from capped to flexible drawdown at any time. Not all schemes allow for flexible drawdown, capped drawdown or phased drawdown. Our SSAS does. If our SSAS is not a suitable pension vehicle for you we can recommend alternatives.

We at PML can guide you through the “at retirement” planning process. Contact us for advice.


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