"How does flexi-access drawdown work with People’s Pension?"

To access your pension savings via flexi-access drawdown, you must be 55 or over and have a minimum of £10,000 in your pension (or £2,000 if you’ve already taken money before).

With this option you can usually take up to 25% tax-free lump sum up front either in chunks or in one go. Under HMRC rules, for every £1 you take as a tax-free lump sum, £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 (either as lump sum withdrawals or by setting up regular income), 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 lump sum, it’s only triggered once you take your first withdrawal from your flexi-access drawdown account.

You can take one withdrawal per tax month, either as a lump sum withdrawal or regular income. For example, from 6 May to 5 June. We don’t charge you for taking lump sums or regular income.

If you’re still going to be working after you start taking money from your pension savings, 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 with 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 money held in flexi-access drawdown, will be taken into consideration when calculating your savings reward on your management charge.