What is a Flexi-Access Drawdown?

Flexi-Access drawdown allows you to draw a taxable income each year directly from your fund, leaving the remainder invested. Its advantages include control in respect of the on-going investment and the timing of an annuity purchase, income flexibility and improved death benefits.

It is generally intended for those individuals who:

  • Understand and accept the risks associated with investment combined with annuity deferral, or
  • Have already secured their long term retirement income requirement and the pension fund now under consideration can be considered as surplus to that requirement.

+ Pros

Flexi-Access drawdown can provide regular income or income as and when it is required, helping to plan your income tax efficiently. The remaining fund can also be passed to your beneficiaries upon your death and subsequently following the death of your beneficiary, passed on again to future generations. This type of scheme is therefore considered an advantageous generational wealth planning tool.

As the funds remain invested, you can benefit from growth in the market

Cons

As your pension remains invested, there is a risk that your fund value can rise as well as fall. It also means that once you have exhausted the funds inside the scheme, you would not receive any further income and so planning how long your fund will last you is very important when determining the level of income required.