Flexi-access drawdown.

From 6 April 2015, any client wanting to vest funds and start taking benefits, including income drawdown, has to opt for flexi-access drawdown. At the same time flexible drawdown automatically became flexi-access drawdown.

When designating funds for drawdown, the client can normally take 25% of those drawdown funds as a tax-free pension commencement lump sum (subject to their available lifetime allowance) and then take drawdown income from the balance, which remains invested. The drawdown income is assessable income for tax purposes.

Once the client has taken their first flexi-access drawdown income payment from any pension scheme, the money purchase annual allowance of £4.000 will apply to them.  

For the treatment of funds on death, please see Death benefits.