To access your pension savings via flexi-access drawdown, you must be 55 or over and have a minimum pension pot of £10,000 (or £2,000 if you’ve designated once already from that account). Using flexi-access drawdown you have to take your maximum tax-free cash at the start – normally 25% of your pension pot. The remaining 75% will be moved into a separate account.
You can only take one lump sum per tax month. No charges are currently applied for taking lump sums from your pension pot. However, the right is reserved to impose charges for taking more than 4 lump sums in a tax year from The People’s Pension. You’d be notified in advance if any such charges were to be introduced.
Some pension providers will allow you to move some of your pension to flexi-access drawdown. However, with The People’s Pension you have to move all your pension savings to one side to be used for flexi-access drawdown. This is known as ‘designating’.
If you’re still going to be working after you start taking money from your pension pot, you might want to continue saving into a pension to make the most of your employer’s contributions. Or even if you’re not going to be working, you might want to continue making your own contributions.
Once you’ve set up your flexi-access drawdown account, any future contributions will go into a new pension pot with The People’s Pension or join the pension savings you already have with us. So, it’ll be separate from your money in your flexi-access drawdown account – you’ll be able to keep an eye on both balances through your Online Account. All of your savings, including monies held in flexi-access drawdown, will be taken into consideration when calculating your rebate on your management charge.