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Phil Thomas
Senior Technical Support Consultant

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Flexi-access drawdown

Published  23 February 2026
   4 min read

Flexi-access drawdown (FAD) replaced the capped and flexible drawdown options for individuals setting up a new drawdown plan from 6 April 2015.

Any existing flexible drawdown plans automatically became FADs on 6 April 2015.

Key facts

  • Flexi-access drawdown is only available from plans that allow drawdown.
  • There is no limit to the amount of income that can be taken.
  • If income is taken, the money purchase annual allowance limits the amount of future pension savings that can be made.

What is flexi-access drawdown?

Flexi-access drawdown is a pension product that allows an individual to access their pension savings, allowing them to withdraw as much or as little income as they wish, while choosing how the rest of the fund is invested.

Since April 2015, all new drawdown products offer flexi-access drawdown, replacing capped drawdown plans.

Flexi-access drawdown eligibility 

Flexi-access drawdown is only available from plans or arrangements if the scheme rules allow.

The normal minimum pension age rules apply.

Tax-free lump sum options

Normally, a pension commencement lump sum (PCLS) of up to 25% of the amount being crystallised can be paid when funds are designated to drawdown, subject to the permitted maximum, which is limited by the individual’s available lump sum allowance (LSA) and lump sum and death benefit allowance (LSDBA). If the plan has protected tax-free cash the normal rules apply and the full fund must be crystallised. The remaining fund will be designated to provide drawdown, which may be taken as a regular income or on an ad hoc basis as needed. 

Income from flexi-access drawdown

The amount that can be withdrawn from a flexi-access drawdown plan is not subject to any limits.

Any income withdrawn will be added to the individual’s taxable income in that year.

Taking tax‑free cash only does not normally trigger the money purchase annual allowance (MPAA); the MPAA is typically triggered when taxable income is taken from flexi‑access drawdown.

Can pension contributions be paid after starting flexi-access drawdown?

Individuals in flexi-access drawdown may continue to make pension contributions, however, if they take any income they will be subject to the money purchase annual allowance of £10,000. Any contributions in excess of this will be subject to the annual allowance charge which will effectively remove the tax relief on the contribution.

Using flexi-access drawdown funds to buy an annuity

Individuals with flexi-access drawdown plans may choose to buy an annuity with the proceeds of their flexi-access drawdown plan at any time.

They can also use some or the entire fund to buy a short-term annuity. This type of annuity cannot be paid for more than 5 years but it can decrease whilst in payment. 

What are the options on death?

On the death of the original planholder, the nominees will have the option to continue flexi-access drawdown as will their successors.

The remaining funds can also be paid as a lump sum or be used to buy an annuity.

As with all post 6 April 2015 death benefits, it is the age of the planholder at their date of death that drives whether there will be a tax charge. More information can be found in our article: Pension death benefits.

Income payments

Whether income tax is deducted from any income depends on the age of the planholder, nominee or successors when they die. 

  • If the planholder dies before age 75 no income tax will be deducted from the beneficiary's income payments - flexi-access drawdown or annuity.
  • If the planholder dies age 75 or over the income payments, flexi-access drawdown or annuity will be added to their other income in that tax year and be taxed accordingly.

Lump sums

  • If the planholder dies before age 75, the lump sum death benefits can be paid tax‑free up to the available LSDBA (assuming relevant conditions such as the two‑year period are met where applicable) and any excess is taxable at the recipient’s marginal rate.
  • If the planholder dies age 75 or over, the lump sum will be added to the recipient’s taxable income and taxed accordingly.

Frequently asked questions

They can usually take up to 25% of their pension pot as a tax-free lump sum They can do this all at once or in stages.

No, there are no limits. They can take as much or as little income as they want from their flexi-access drawdown plan.

Yes. Any income taken (after the tax-free lump sum) will be added to the individual’s other income and taxed at their marginal rate of income tax. 

Yes. But if they take any income from their drawdown plan, their annual allowance for new pension contributions drops to £10,000 (this is called the Money Purchase Annual Allowance).

Yes, they can use some or all of their flexi-access drawdown fund to buy an annuity at any time.

When an individual dies, their remaining pension can be passed on to their beneficiaries. The beneficiary can usually choose to keep it in drawdown, take it as a lump sum, or buy an annuity. If the individual dies before age 75, the money is usually paid tax-free. If they die at 75 or older, their beneficiaries will pay income tax on any money they take out.

Disclaimer

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.