Flexible Access Drawdown (FAD)

Draw a tax-free lump sum of up to 25% of the value of your pension pot and leave the bulk of your savings invested. Flexible Access Drawdown (FAD) gives you an income when needed and lets you vary your income as your financial circumstances change.

Pension Drawdown

Since April 2015, all new pension drawdown products have offered flexible-access drawdown. With flexible-access pension drawdown, your pension pot is invested, and you can draw an income from it as and when needed.

You can withdraw as much or as little from your pension as you want and choose how your money is invested.

It’s an easy way to unlock cash from your pension, and you can begin taking withdrawals from your 55th birthday (57 from April 2028).

Independent Financial Advice

Draw up to 25% of your pension tax-free, all at once or in stages.

Once you’ve drawn your tax-free lump sum, the rest of your pension remains invested. This allows your residual savings to grow.

You can vary your income and the frequency of your payments.

Your pension doesn’t die with you. You can nominate beneficiaries to receive the remainder of your pension fund when you die, e.g. your spouse, children or a charity.

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Frequently Asked Questions

The information provided in these FAQs does not constitute professional financial advice. We strongly recommend that you consult a professional adviser before proceeding with a financial transaction.

How much can you draw down from your pension each year?

There are no restrictions on how much you can draw from your savings in a Flexible Access Drawdown (FAD).

Calculating how much you can draw sustainably is vital so your savings don’t run out. First, we assess your appetite for investment risk. We then use our knowledge and experience to calculate a target investment return for your investments. This guides how much we believe your maximum sustainable withdraws could be. We then review progress regularly to make sure your plan’s on track.

How much can I draw from my pension without paying tax?

Generally, you can draw up to 25% of the value of your savings as a tax-free lump sum. Any additional withdrawals are taxed as income and subject to standard tax allowances and rates. Withdrawals from a pension are not assessable for National Insurance, just Income Tax.

Note that this tax treatment depends on your circumstances and may be subject to change in future.

What are the main risks with a drawdown pension?
  • Longevity Risk – The value of the investment could be severely depleted or even exhausted if the profits you earn are less than the amount you draw. This risk increases over time.
  • Mortality risk – If you live for longer than you expect to your savings would need to last for longer than you anticipate. 
  • Inflation risk – if inflation is higher than the profits from your investments the spending power of your savings will be gradually eroded.
  • Investment risk – investment returns aren’t guaranteed, so the value of your savings and the income they generate can go up or down and this could reduce the amount you can withdraw in the future.
What are the pros and cons of a flexible access drawdown pension?


  • You can draw your tax-free lump sum immediately and defer income to a later date.
  • Your income is flexible. You can increase, reduce, suspend or restart withdrawals when you want to.
  • You control how much risk you take with your money, e.g., a cautious, balanced or adventurous investment strategy.
  • Any profits you earn inside your drawdown pension are free from personal Income Tax and Capital Gains Tax.
  • You can choose to buy an annuity in the future. As you age, your annuity rate should improve if everything remains equal.
  • When you die, you can leave any money left in your pension to your loved ones.


  • A drawdown pension is complex, and it will need to be reviewed on an annual basis. You’re not legally required to have an adviser, but it might be easier to manage a drawdown pension if a professional helps you make decisions.
  • There’s no guarantee that your income will be as high as an annuity offers today.
  • The value of your investments and the income you can draw from your pension will vary. If your investments don’t perform well, this will affect how much you can draw down from your retirement in the future.
  • You might live for longer than you expect. Longevity increases the risk that your fund will be depleted.

This area is very complex, and the implications if the wrong decision is made are significant. We strongly recommend you consult a professional adviser before proceeding with a FAD.

Get in touch

Neil Jenkins owner of Fintegrity

Contact Neil Today

The Workers’ League House, 44-50 Royal Parade Mews, Blackheath, London, SE3 0TN