What is a flexi-access drawdown arrangement?

• A. A plan that guarantees fixed monthly payments for life.
• B. A drawdown option allowing flexible withdrawal from a pension pot while keeping funds invested.
• C. A scheme to annuitize the entire pot immediately.
• D. A tax wrapper that locks funds until retirement.

Answer: (B)

Flexi-access drawdown is a way to take money from a defined contribution pension pot flexibly while leaving the remaining funds invested. Instead of converting the whole pot into a lifetime income with fixed payments, you can withdraw varying amounts at varying times and keep the rest invested to potentially grow with the market. You can usually take 25% of the pot tax-free at the outset, and the rest is taken as taxable income as you draw it down, or left invested to grow and drawn later. The key idea is control and flexibility: income can be adjusted to your needs, and investments remain exposed to market performance.

This distinguishes it from options that guarantee fixed monthly payments for life (an annuity), or from immediately annuitizing the entire pot, or from a tax wrapper that locks funds away until retirement.