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Drawdown

What Is Flexible-Access Drawdown?

Drawdown, or Flexible-Access Drawdown (FAD), is an invested retirement product that lets you access your pension money as and when you need it, giving you the control to decide how much income you receive. This means you can leave some of your pension invested for longer, giving it the opportunity for further growth – while also receiving a pension income.

Drawdown offers you the flexibility to make changes to your plan as and when you require. You can change the level of income you receive, the frequency of payments and where your funds are invested.

As with all investments, there is a certain level of risk associated with drawdown. The value of your fund can rise or fall, but the objective is that you will enjoy healthy growth through the lifetime of the plan. Your Independent Financial Adviser (IFA) will work with you to understand your attitude to risk, and your fund will be invested in a portfolio which is appropriate for your objectives and circumstances.

More time for your money to grow


Leaving more of your money in your pension, taking only what you need when you need it, means you give the rest of your savings more time to grow. There is, as with any investment, the risk that you lose some of your investment, too.

You can take up to 25% of your pension pot tax-free. When you use flexible-access drawdown, you can choose to take a lump sum up to 25% of your pension fund value in one go. Or, you could choose to have 25% tax-free on each withdrawal.

For many people, this helps them set up a retirement income plan towards the end of their careers. They might, for example, use a 25% tax-free lump sum towards the purchase of a buy-to-let property that will provide a regular income for retirement. Others may choose to use a lump sum to pay off the rest of their mortgage to reduce living costs through retirement.