Income drawdown - frequently asked questions

A Yes, he can. Although it has not been possible to start a new capped drawdown plan since 6 April 2015, it is possible to transfer in drawdown an existing capped drawdown plan to a new provider without the plan converting to a flexi-access plan.

HMRC Pensions Tax Manual PTM104000: Transfers: Transfer of drawdown pensions

A: This is only possible if the original scheme offers income drawdown.

If Guy doesn’t have the option of income drawdown under the original plan, then funds have not been made available for the payment of a relevant pension under that scheme. Any lump sum paid will not be TFC but an unauthorised payment and subject to a tax charge.

HMRC Pensions Tax Manual PTM063210: Pension commencement lump sum conditions

A The capped drawdown will automatically convert to a flexi-access drawdown (FAD), so the restrictions on the amount of income that can be taken will be removed.  The money purchase annual allowance will also be triggered which restricts the total amount of money purchase contributions made to all plans to £4,000 in a pension input period before a tax charge is applied.

The money purchase annual allowance explained

HMRC Pensions Tax Manual PTM062750: Payment of excessive drawdown pension

A No, new income drawdown plans set up after 6 April 2015 will be flexi-access drawdown plans.  However, it is possible to start a new capped drawdown plan after 6 April 2015 but only so that an existing capped drawdown plan can be transferred into it.

HMRC Pensions Tax Manual PTM104000: Transfers: Transfer of drawdown pensions


The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.

All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.