Flexible Drawdown

"Flexible drawdown" is HMRC's own historic term for the pre-6 April 2015 drawdown option, distinct from the post-2015 "pension freedoms" regime, which HMRC and the Pension Schemes Act 2015/Taxation of Pensions Act 2014 instead call "flexi-access drawdown". As HMRC's Pensions Tax Manual explains, "flexible drawdown is a form of 'income withdrawal' where the pension is paid direct from the pension scheme" with no annual limit, but a member could only qualify for it by first satisfying a Minimum Income Requirement: "for flexible drawdown declarations made between 6 April 2011 and 26 March 2014, this amount was £20,000. For flexible drawdown declarations made on or after 27 March 2014, the amount was £12,000." Flexible drawdown sat alongside "capped drawdown" (which had no minimum income test but capped annual withdrawals) as the two pre-2015 drawdown options.

The pension freedoms introduced from 6 April 2015 abolished both the Minimum Income Requirement and capped drawdown limits, and HMRC's manual records that the transition was automatic: "as of 6 April 2015, the member's flexible drawdown pension fund automatically converted into a flexi-access drawdown fund, the funds ceased to be member-designated funds and become newly-designated funds", and "flexible drawdown funds in existence immediately before 6 April 2015 are from that date automatically treated as flexi-access drawdown funds, which have different rules. No new flexible drawdown funds can be set up from that date." A glossary or advice document referring to "flexible drawdown" as the current mechanism for accessing a defined contribution pension flexibly from age 55 is describing the wrong regime by name — the correct current term is flexi-access drawdown, and "flexible drawdown" should now only be used to describe the pre-2015 arrangement (or funds that automatically converted from it).