What is a pension drawdown?
A pension drawdown, otherwise known as a flexi-access drawdown (FAD), is one way you can take your pension. It gives you access to your pension savings while your remaining funds stay invested.
One of the ways you can approach a flexi-access drawdown is to take an initial tax-free lump sum of up to 25% of your pot, before moving the remainder of your pension into funds. You can decide which funds you invest in based on your investment objectives and the level of risk you’re comfortable with.
As with all investments, an annual review is recommended to make sure your investments are on track or still suit your financial goals. You also have the option to take a regular income which can be adjusted depending on your fund performance or take additional cash lump sums.
When you pass away, your nominated beneficiary will have the flexibility of choosing how they take the remaining benefits from your flexi-access drawdown.