Pensions Advice

Flexi-Access Drawdown

With Flexi-Access Drawdown there are no limits on the amount of income you can take each year.

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Here’s what you’ll be able to do:

  • Take up to 25% of your retirement pot tax-free. and any income taken from drawdown will be treated as earned income at your marginal tax rate
  • Choose and draw down an income that suits your needs – and change this any time you want. Any income taken from drawdown will be treated as earned income at your marginal tax rate
  • There is no need to take an income if you do not require one.
  • Take an additional cash withdrawal anytime you like.
  • Your pension pot remains invested, giving it the potential to keep on growing.
  • When you die, you can pass on what’s left in your pot to your loved ones, inheritance tax free. See diagram below.
  • Buy a guaranteed income (annuity), anytime

Individuals in flexi-access drawdown may continue to make contributions to their pension; however, if they take any income the maximum amount you can pay into pensions will be reduced to £10,000 a year.

Because your pension pot remains invested, you need to be comfortable taking the risk that if investments don’t perform well enough they might not be able to sustain the amount of income you need. High levels of withdrawal may erode the value of the fund.

When you die, you can pass what’s left in your plan to a dependant but it may be subject to a tax charge

Death Benefits

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Remember that flexi-access drawdown does not provide a guaranteed income for life and may not be suitable for everyone.

pension drawdown calculator

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