Flexible income (drawdown)

The most flexible way to take income from your pension. If you have a pension pot of £30,000 or more this could be a good option for you.

We’ll take you through the transition from having a pension pot to receiving an income.

What’s flexible income?

Flexible income, also known as drawdown, allows you to take your pension income as and when you like.

You’ll have control over how much you take out. It can be anything between zero and the maximum limit set out by the government. From April 2015 there will no longer be a limit, although you may be restricted in how much more you can pay into your pension.

The rest of the money in your pension will remain invested so your pension has the potential to keep on growing.

The value of your investment can go up or down and may be worth less than what was paid in.


  • Tax-free lump sum

    Currently, once you reach age 55 you can take your tax-free lump sum. This is normally up to 25% of your pension. There are some exceptions which may mean that you can take your benefits earlier.
  • Income flexibility

    You can stop, start, increase or decrease your income at any time.
  • Convert to a fixed income - annuity

    You can buy a guaranteed income, also known as an annuity at any time. You can use some or all of your pot to buy a fixed income.
  • Carry on making payments into your pension

    If you're under 75, you can continue making payments (subject to government limits) and give your pension an opportunity to grow. Remember, as it's invested, the value could also go down and you could get back less than you invested.
  • Flexible benefit options after you’re gone

    Those left behind after your death will have options. These include buying a guaranteed income, continuing with a flexible income or taking a lump sum payment.

The flexible income you can take is subject to government limits.

When you take an income you have options:

  • you can take the maximum amount from your pension pot (subject to limits and tax).
  • you can take your tax-free lump sum (normally up to 25% of your pension) and then:
    • take an income from your remaining pot
    • wait before taking your retirement income - if you’re still working or have an alternative income you can keep your money invested in your pension until you’re ready.
  • you can take your tax free lump sum in stages as part of your income

To apply call   0845 279 8897

Call charges will vary.

You can choose a Standard Life flexible income if:

  • you have a pension pot of at least £30,000
  • you are a UK resident aged over 55 (57 from 2028).

There are some exceptions which may mean that you can take your benefits earlier.

Interested in flexible income? Call Standard Life Client Management on 0845 279 8897

Call charges will vary.

Income tax

The income you take from your pot will be taxed under the Pay As You Earn (PAYE) system. You can find out more on the HM Revenue & Customs (HMRC) website.

If you are taking income drawdown from a Self Invested Personal Pension (SIPP) and are below the age of 75 then you can continue to pay into your pension and get tax relief (subject to HMRC limits).

What are the risks?

  • Investment risk
    As your pension pot will remain invested, there’s a risk that your investments could go down in value.
  • Sustainability of income
    You need to consider the longer-term impact of making withdrawals from your pension pot because you could run out of money before you die.
  • Government income limits
    The maximum income you can currently take from your plan is set by the government to ensure the level of income available to you is sustainable, based on your plan value and your age. These limits are subject to change.

We have experts at Standard Life Client Management, a subsidiary of Standard Life plc, who can help you with your decisions on investments and level of income.

Call us on  0845 279 8897

Call charges will vary.


The charges for your flexible income or income drawdown depend on a number of factors. The good news is you only pay for the services that you use on our SIPP. You can get more information on this in the Key features PDF (331kb).

Can you wait for greater pension flexibility?

From April 2015, if you’re at retirement age, you’ll have much more choice when it comes to taking your retirement income.

Our range of retirement guides can help you understand your options now and in the future so you can make the choice that’s right for you.