Flexible drawdown.

Flexible drawdown was introduced on 6 April 2011 and automatically became flexi-access drawdown on 6 April 2015.

The following rules applied until 5 April 2015:

Unlike capped drawdown – which aims to ensure retirement funds are not prematurely exhausted - flexible drawdown allowed clients to draw upon their fund without restriction provided they had sufficient income - the Minimum Income Requirement (MIR) - from other sources such as:

  • basic and secondary State Pension
  • lifetime annuity bought with funds from a UK Registered Pension Scheme
  • RPI-linked annuities
  • Scheme Pension from either a UK Registered Pension Scheme or non UK relevant scheme
  • overseas pension payment equivalent to a lifetime annuity or Scheme Pension.

Other forms of income such as interest, rents and dividends, or investment-linked annuities without a guarantee, were not classed as acceptable sources of income.

From 27 March 2014 the MIR was reduced from £20,000 per annum to £12,000 per annum.

If the MIR was met, clients could withdraw sums from their plan at levels and times to suit their circumstances. The withdrawals were assessable income for tax purposes.

Please note: If clients made any contributions within a tax year, they would not be able to take flexible drawdown until the following tax year.

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