Flexi - Access Drawdown
What is Flexi-Access Drawdown (FAD)?
A Flexi-Access Drawdown (FAD) pension is a method of withdrawing benefits from your pension fund without purchasing a lifetime annuity.
Holders of money purchase pension plans can defer taking their pension in the form of an annuity and instead make withdrawals directly from the pension fund. This will first require the funds to be moved into a Flexi-Access Drawdown plan or converted to Flexi-Access Drawdown. [Any flexible drawdown plans that were in place before 6 April 2015 automatically became Flexi-Access Drawdown plans on 6 April 2015. Capped Drawdown Plans in existence before 6 April 2015 can be converted to Flexi-Access Drawdown].
The main purposes of drawdown pensions can be summarised as follows:
- Deferral of annuity purchase, thus avoiding being locked into low annuity rates which may apply at the time of retirement.
- The drawdown pension option enables the policy holder to buy an annuity at a time that is best suited to them and hopefully when annuity rates are more favourable or provides an opportunity to avoid purchasing an annuity altogether where appropriate.
- The option enables investors to retain control over their pension investments and allows them to continue to be invested in the markets.
- It postpones the decision of deciding which type of annuity to lock into, for example providing a contingent pension for a wife or husband and selecting a level or increasing pension.
- With flexi-access drawdown the amount of income that can be taken from the fund is not subject to any specific limits and therefore this method offers great flexibility. This can be useful for tax planning or where other sources of income are available.
Find out more in our Flexi-Access Drawdown Guide
Independent Financial Advice
Speak to a fully qualified and independent
Invest Southwest adviser today.
Call 01823 353970
Why choose Invest Southwest for Flexi-Acess Drawdown Advice?
- We have a team of fully qualified and independent financial experts
- We are highly recommended by our clients
- We deal with a wide range of products
- Our initial consultation is FREE
Call 01823 353970 to find out more
"You are always very courteous and professional and explain things in an easy to understand way. You answer my many questions thoroughly and quickly and with a lot of patience. We are very satisfied with the service you deliver and would have no hesitation in recommending you."
Mrs W, Ilminster, Somerset
Latest Pensions Articles
It’s your retirement – don’t do it a disservice
The Institute for Fiscal Studies (IFS) has warned that 90% of ...
How up to date are you with your pension?
Here are a few things to consider. How much ...
HNWIs cutting pension contributions
Research has highlighted that in an effort to alleviate daily ...
The best (retirement) gift for your child?
With the cost of children’s birthday presents and ...