Pension Drawdown

A Pension Drawdown is a product designed to pay you an income of your choosing after the deduction of the Tax Free Cash portion for your retirement.

As an invested product the fund can increase or decrease in value. Earlier versions are known as Capped Drawdown and the latest version is known as Flexi Access Drawdown.

What you need to know

  • You need to be age 55 or over to have one.
  • To create a Flexi Access Drawdown plan, you will have to transfer an existing Personal Pension or Pensions, SIPP, AVC, FSAVC or Final Salary Scheme Transfer Value to name but a few into a new Flexi Access Drawdown we will set up for you with a leading insurance company.
  • Upon creating the Flexi Access Drawdown Plan you will receive 25% of the total initial transfer in value or values collectively as Tax Free Cash immediately.
  • You could transfer a frozen final salary scheme full transfer value into a Flexi Access Drawdown if you are age 55 or over and receive the full 25% value of the transfer value as Tax Free Cash and leave the balance to grow and not take an income if you wish.
  • The balance after Tax Free Cash you have many income choices and options from £0 income upwards. Complete flexibility. If income is chosen you can have it monthly, quarterly, Half Yearly, Yearly in advance or in arrears. All income is taxed under PAYE at your highest rate as per your tax code on the HMRC system.
  • If you draw an income that is too high you could deplete the fund in the long run.
  • Tax efficient for high earners.
  • You can have access to the core fund for ad hoc drawings. These are taxed as income so a large sum could place you into a higher tax band than you are currently.
  • You can leave the fund to your husband / wife, children if you pass away.
  • A Flexi Access Drawdown is an invested product like a personal pension and the value of the fund can decrease as well as increase.
  • Our Proposition is to review all of your past pensions that you have

Speak to someone today

If you would like to speak to someone directly today,
please give Howard a call.

Available Monday - Friday 9am to 6pm

Our Transparent Process


Obtain your Signed Permission

Pensions are complicated and in our 32 years of experience need two face to face meetings at your home.

The first meeting so you know who you are dealing with, how we operate and to discuss what you have pension wise. We will run through our process and complete all of our initial paperwork at that meeting. We will also obtain all necessary permissions from you to get all the information and paperwork we require from each scheme concerned.

Agreement / Paperwork

Following the initial meeting we will contact all of your pension providers and obtain the necessary information and paperwork we require. Upon receipt we will prepare the necessary reports, receiving scheme paperwork if applicable and suitability report for our advice prior to our second meeting.

Second Meeting

At the second meeting we will run through each of your schemes and our findings and the reason to transfer or not as the case may be and complete the necessary paperwork to complete the process. Following this we will prepare and submit all applications as necessary from our office and follow this through to a conclusion keeping you up to date as we go.

Ongoing Review

Following completion of the process you will be able to log into the providers website and see your values at any point plus we will keep an eye on things as per our servicing agreement.

Be advised that we do not cold call, we do not mail shot, we do not pester people, we do not force people to make decisions they do not want to. Everyone who we see is as a result on an enquiry led by them, meaning that the potential client has made the decision to look at and in most cases transfer their Final Salary Scheme or Personal Pension, or SIPP into a new arrangement be this a new Personal Pension or Annuity or Flexi Access Drawdown arrangement. Whilst we are not order takers, the point of this declaration is that we do not force or push people into making such decisions. We still go through a lengthy advice process to check viability, attitude to risk, product and fund selection and point out all of the pitfalls and benefits either way. In some cases we do not agree and this is pointed out to clients. We do not transact insistent client business.

Contact us to discuss your finances

We specialise in all aspects of personal finance and will personally call you back to discuss your requirements and help you make the best choices for your individual circumstances.

No hidden fees. No pressure sales. Let's secure your future together.

Covid-19 Update - We can now offer remote meetings and electronic signatures. Please choose this option in the form. We can still offer in person meetings if required.

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Funding your Flexi Access Drawdown plan

When setting up a new Flexi Access Drawdown plan the existing money in your current pension plan(s) is used to fund it. The source of these funds can be from a single personal pension that you have or from multiple personal pensions that you have and or as a transfer in from a previously held final salary scheme.

It is very worthwhile looking at all of your different pension pots and seeing if it is beneficial to combine all of them or some of them and do some serious retirement planning.

Some reasons you should use us to transfer your pension(s).

  • Very Competitive Transfer Fee Structure
  • Access to our initial advice and ongoing advice review process
  • Only the best product providers used
  • Flexibility of product and fund selection
  • Extensive Industry Experience
  • We are totally Independent, Directly Authorised Advisers.
  • We are friendly and talk plain English and no waffle.
  • No pressure selling from us.

Reasons for a Flexi Access Drawdown

By reducing work and taking the maximum tax free cash, supplementing your income from a drawdown you are enabling yourself to have a phased retirement process.

If you feel this could be for you...

  • Do you know what the pension policy or policies are going to give you at retirement money wise?
  • What is the single or multiple pension policy that you have? Is it a personal pension or past frozen company pension? Maybe the source is a past opt out of SERPS scheme you did but have forgotten about. We can find out.
  • We need to know all aspects of each plan that you have to see if transferring them is the best thing for you.
  • If you want the Tax Free Cash, based on our discussions with you we can set up the best way for you to achieve this policy wise.
  • If you have multiple policies, depending upon values you may not want all the Tax free Cash at once so we can help sort this out for you too and stage the plans to give you maximum flexibility when getting Tax Free Cash.
  • Your new plan can be set up with your attitude to risk taken into account and will be subject to regular reviews by us and you. Existing personal pensions if not transferred can be looked at and managed by us too.
  • Have you applied for a state pension forecast yet? This is free, yes free. We can help with that.
  • If you wish to look at accessing Tax Free Cash and or getting you pensions in order then we can help. Contact us via the contact us button.
  • Do you know what the pension policy or policies are going to give you at retirement money wise?
  • What is the single or multiple pension policy that you have? Is it a personal pension or past frozen company pension? Maybe the source is a past opt out of SERPS scheme you did but have forgotten about. We can find out.
  • We need to know all aspects of each plan that you have to see if transferring them is the best thing for you.
  • If you want the Tax Free Cash, based on our discussions with you we can set up the best way for you to achieve this policy wise.
  • If you have multiple policies, depending upon values you may not want all the Tax free Cash at once so we can help sort this out for you too and stage the plans to give you maximum flexibility when getting Tax Free Cash.
  • Your new plan can be set up with your attitude to risk taken into account and will be subject to regular reviews by us and you. Existing personal pensions if not transferred can be looked at and managed by us too.
  • Have you applied for a state pension forecast yet? This is free, yes free. We can help with that.
  • If you wish to look at accessing Tax Free Cash and or getting you pensions in order then we can help. Contact us via the contact us button.

Background Information

Some people are currently in earlier style Capped Drawdown plans in which they have reviews every three years and the income they receive is altered accordingly. There are many benefits in being in a Capped Drawdown plan such as no annual allowance reduction when drawing an income, however if you require more income than the plan will give then one can switch to a Flexi Access Drawdown plan and increase your income. Be advised if you do this you cannot switch back into a Capped Drawdown Plan later.

New Capped Drawdown Plans are no longer available. All that is available is Flexi Access Drawdown plans currently.

A Flexi Access Drawdown Plan at retirement is the recipient plan for all of your personal pension policies pre retirement (assuming that you did not wish to purchase an annuity) and this is where you will receive your Tax free Cash otherwise known as Pension Commencement Lump Sum (PCLS) and your income or access to the main fund or collective fund (collective meaning if funds from more than one pension plan were transferred in at the time).

The aim of the drawdown fund is to achieve capital growth if no income is taken, cover the cost of the income and achieve some capital growth if income is taken and also to provide both income flexibility and since the introduction of pension freedoms in 2015 access to the actual fund if necessary, but this will erode the fund and reduce the long term income.
Please note. If you are age 55 or above and still contributing into a pension scheme but wish to use a previous scheme to be put into a flexi access drawdown plan in order to obtain the Tax Free Cash and no income, this is fine. If you draw an income from the scheme or core fund beyond the Tax Free Cash is will affect your annual allowance details below and may will impact how much you are able to contribute into your current scheme and receive tax relief for.

The Government announced pension freedoms in the 2014 Budget to start in the 2015/16 tax year. It means anyone aged 55 and over can take the whole amount as a lump sum, paying no tax on the first 25% and the rest taxed as if it were a salary at their income tax rate.

The annual allowance is a limit on the amount that can be contributed to your pension each year, while still receiving tax relief. It's based on your earnings for the year and is capped at £40,000. The annual allowance is currently capped at £40,000 although a lower limit of £4,000 may apply if you have already started accessing your pension. The annual allowance applies across all of the schemes you belong to, it’s not a ‘per scheme’ limit and includes all of the contributions that you or your employer pay or anyone else who pays on your behalf.

The Money Purchase Annual Allowance (MPAA)

The Money Purchase Annual Allowance was introduced on 6th April 2015 and was set at £10,000 gross p.a. The government has now reduced the MPAA to £4,000 gross p.a. which applies to contributions made from 6th April 2017. If you have taken flexible benefits which include income, such as an ‘Uncrystalised Funds Pension Lump Sum (UFPLS)’ or flexi-access drawdown with income, and you want to continue paying contributions to a defined contribution pension scheme, you will have a reduced annual allowance of £4,000 pa towards your defined contribution benefits. The reduced allowance will apply if you have withdrawn more than the 25% tax free pension commencement lump sum (PCLS). The reduced amount is known as the ‘money purchase annual allowance' (MPAA) and includes both your own contribution and any other contribution paid on your behalf, such as an employer or a third party. You cannot bring forward any unused annual allowances from the previous three tax years to warrant a higher contribution than £4,000 towards your defined contribution benefits.

As long as you only access the TFC and no income you will not be affected by the reduction. Therefore in summary, if you are contributing collectively more than £4,000.00 into a current personal pension, employer scheme, final salary scheme or combination then you can still transfer all of your schemes at age 55 or above into a flexi access drawdown and take the 25% tax free cash and this will not affect any current arrangement. If, however you also drawdown cash or income in excess of the 25% then your annual allowance will drop to £4,000 which will then have tax implications for you if the current pension contributions are more than £4,000. If you are not making any pension contributions and are not likely to then this annual allowance cap lowering in this instance will not affect you.

What are the risks?

  • The value of funds can increase as well as decrease in an invested contract.
  • Drawing income from an invested contract will deplete the fund if too much is taken and or if investment return is not sufficient to cover the income. A large market swing (seen in March 2020) could decrease your pension fund significantly, in some cases 25-30% until market recovery.
  • Smoothed funds are allocated a specific growth rate which is reviewed on a monthly and quarterly basis by the provider.
  • If the market moves up or down by 10% over a 5 day consecutive period the core fund may be adjusted in value up or down in value which would either increase or decrease the value of your holding overnight. You would still receive your specified daily growth rate and this can be altered at the fund reviews by the provider.
  • Pure Cash Fund is available but it offers no growth.
  • There is a 28 day notice period to switch out or into a smoothed fund for fund stability when fund switching.
  • There is no such notice period if you are taking income from your pension.