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What is Flexi Access Drawdown?

These work a bit like annuities in that they give you an income to live on during retirement. Where they differ is that you can’t always guarantee the income will last you for the whole of your retirement, but they can be a lot more flexible.

How do they work?

Once you’ve taken your tax-free lump-sum, you re-invest the rest of your pension pot in a flexi-drawdown fund and take income from it whenever you want. Anything you don’t take stays invested and benefits from any growth.

Income from a flexi-drawdown is taxed in the same way as income you’d get from employment.

You can move to a better performing fund at any time, and you can use income in your fund to buy another pension product, including an annuity, for added security.

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

Tax treatment varies according to individual circumstances and is subject to change.

Things to think about

  • If you spend too much in the early years, you might run out of money.
  • Flexi-drawdown funds are based on investments – these can go down as well as up.
  • They can be quite complicated products, so you really need to understand what you’re buying.

If you’d like to talk to us about an annuity purchase, please complete the form on the right-hand side of this page. Alternatively, give us a call if you prefer on 01244 47010  or send us an email to: 

Tom Lenton

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