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 already taken money before).
With this option you can usually take up to 25% tax-free cash up front either in chunks or in one go. Under HMRC rules, for every £1 you take as tax-free cash, £3 will be moved to a flexi-access drawdown account that we set up for you. Then, each time you take money out of your flexi-access drawdown account, you may pay income tax on the full amount of each lump sum. With flexi-access drawdown your money purchase annual allowance (MPAA) isn’t triggered when you take the initial 25% tax-free cash, it’s only triggered once you take your first withdrawal from your flexi-access drawdown account.
You can take one lump sum a tax month. For example, from 6 May to 5 June. We don’t charge you for taking lump sums.
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.
Any future contributions will go into your current pension pot with The People’s Pension, 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.