Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Drawdown definition

What does Drawdown mean? In pensions practice, pension drawdown means taking income from a money purchase (defined contribution) pension while keeping the remaining fund invested. In England & Wales, Scotland and Northern Ireland, the statutory form is flexi‑access drawdown, defined in the Finance Act 2004 (as amended) and HMRC rules; capped drawdown persists only for existing arrangements. members can normally take a pension commencement lump sum (often up to 25% subject to current limits) and then choose variable withdrawals; income is taxed at the member’s marginal rates. First flexible access usually triggers the money purchase annual allowance for future contributions. On death, beneficiaries...

Pension drawdown (flexi-access and grandfathered capped) from 6 April 2015: scheme powers, tax allowances post-2024, death benefits, reporting, member issues and FCA rules

Published by a LexisNexis Pensions expert

Practice notes

THIS PRACTICE NOTE APPLIES TO MONEY PURCHASE ARRANGEMENTS FROM 6 APRIL 2015

From 6 April 2015, new pension flexibilities expanded the retirement choices for DC members and others with ‘flexible benefits’ (in essence, money purchase and/or cash balance entitlements). As part of those reforms, drawdown became more broadly accessible. For background on the changes implemented on 6 April 2015, see Practice Note: Pension freedoms—an introduction [Archived].

This Practice Note concentrates on the legal framework for drawdown arrangements set up on and after 6 April 2015. It also addresses how pre-April 2015 drawdown is treated from that date. For the rules governing drawdown before 6 April 2015, see Practice Note: Drawdown between 6 April 2011 and 5 April 2015 [Archived].

What is drawdown?

The label ‘drawdown pension’ (often called ‘flexible income’) replaced ‘unsecured pension’ and ‘alternatively secured pension’ used up to 5 April 2011. Drawdown pension describes the method of paying benefits that allows members to set their own yearly income from a pension arrangement...

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Web page updated on 21/05/2026

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