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Phil Thomas
Senior Technical Support Consultant

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Flexi-access drawdown

Published  20 March 2025
   10 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.
  • 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.

Who can use flexi-access drawdown? 

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

The normal minimum pension age rules apply.

What tax-free lump sum can be paid?

Normally a tax-free lump sum of up to 25% of the crystallised fund is payable (if required) each time crystallisation takes place. 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. 

How much income can be taken from a flexi-access drawdown plan?

The amount that can be withdrawn from a flexi-access drawdown plan is not subject to any limits.

Any income amounts withdrawn will be added to the individual’s taxable income in that year.

Can an individual pay pension contributions after taking income from a flexi-access drawdown plan?

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.

Can a flexi-access drawdown plan be used 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 plan holder, 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 plan holder 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 plan holder, nominee or successors when they die. 

  • If the plan holder dies before age 75 no income tax will be deducted from the beneficiary's income payments - flexi-access drawdown or annuity.
  • If the plan holder 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 plan holder dies before age 75 the lump sum will be paid tax-free. 
  • If the plan holder dies age 75 or over the lump sum will be added to the recipient’s taxable income and taxed accordingly.

Further information

HMRC Pensions Tax Manual - PTM062730: Member benefits:flexi-access drawdown 

Capped income drawdown and review dates

Capped income drawdown involves taking a pension directly from a fund instead of buying an annuity. There is, however, a limit on the maximum amount of income that can be withdrawn during a year and this limit is reviewed on a frequent basis.

Read more  about Capped income drawdown and review dates

Pension death benefits

In this article we explain what death benefits can be paid from money purchase and defined benefit pension scheme and how they are taxed.

Read more  about Pension death benefits

Protection of scheme specific tax-free lump sum

Individuals who didn't opt for primary or enhanced protection but had the right to more than 25% of their benefits value on 5 April 2006 as a tax-free lump sum, may still have the higher percentage paid when they take their benefits. This is called scheme specific protection.

Read more  about Protection of scheme specific tax-free lump sum

Money purchase annual allowance

This article explains what the money purchase annual allowance (MPAA) is, what triggers it and the impact on defined benefit schemes.

Read more  about Money purchase annual allowance

Case study

Uncrystallised fund pension lump sum, drawdown, scheme specific tax-free cash and the strange case of the permissive statutory override

Read more  about Case study

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.