Using flexi-access drawdown you usually take up to 25% tax-free lump sum up front either in small chunks or in one go. Under HMRC rules, for every £1 you take as tax-free lump sum, £3 moves to a flexi-access drawdown account. Each time you take money out of that account (either as lump sum withdrawals or a regular income) the full amount will be subject to income tax at the highest rate you pay.

If HM Revenue & Customs (HMRC) hasn’t given us with your tax code for the current tax year, your withdrawal will be taxed using a temporary (emergency) rate. In most cases, this will mean that too much tax will be taken and you’ll have to reclaim the overpayment from HMRC.

If you’re taking regular income, HMRC will provide us with your tax code after your first income payment which we will then use for future income payments.