Using flexi-access drawdown you usually take up to 25% tax-free cash up front either a bit at a time or in one lump sum. Under HMRC rules, for every £1 you take as tax-free cash, £3 moves to a flexi-access drawdown account. Each time you take money out of that account you’ll pay tax on the full amount of each lump sum at the highest rate you pay.

If HM Revenue & Customs (HMRC) hasn’t supplied 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 deducted and you’ll have to reclaim the overpayment from HMRC.