SIPP accounts are currently offered on a Beta basis and are available only to a limited number of users for testing purposes. During this period, features, functionality, and availability may be subject to change or withdrawal without notice.
We will announce when SIPP accounts become available to eligible UK-resident clients of Trading 212 UK Ltd.
Flexi-Access Drawdown allows you to keep your pension savings invested while giving you the flexibility to take money from it gradually once you reach the minimum pension age.
For guidance on accessing your pension, we recommend:
- Booking a free Pension Wise appointment via MoneyHelper
- Seeking advice from a regulated financial adviser
📄 Note
Currently, our platform does not provide Flexi-Access Drawdown. This article is for educational purposes only, to help you understand what FAD is and how it works. It should not be treated as financial advice.
Tax-Free Cash (Pension Commencement Lump Sum – PCLS)
- When you reach the minimum pension age (currently 55, rising to 57 in 2028), you can usually withdraw up to 25% of the amount you move into drawdown as tax-free cash.
- This tax-free portion is limited by your available Lump Sum Allowance (LSA), which is currently £268,275 for most people (2025/26). If you have existing protections or previous lump sums, your allowance may differ.
📄 Note
Taking money above your available LSA may result in additional tax charges.
Drawdown Account
- The remaining 75% of your pension funds is moved into drawdown.
- These funds remain invested and can potentially grow further.
- Any future withdrawals from this account are subject to income tax at your marginal rate.
Example 1: Taking all your tax-free cash at once
- Pension Value: £100,000 (uncrystallised)
- Tax-Free Cash Withdrawal (PCLS): 25% of £100,000 = £25,000 (tax-free, up to your LSA).
- Remaining Invested in Drawdown: The other 75% (£75,000) is moved into drawdown for ongoing investment. Any future withdrawals from this £75,000 will be fully taxable.
This option suits those wanting immediate access to their full tax‑free amount.
Example 2: Taking your tax-free cash gradually
You don't have to move your whole pension into a drawdown at once. You can move smaller portions over time, taking 25% tax-free cash from each portion and moving the remaining 75% into drawdown.
- Initial Pension Value: £100,000 (uncrystallised)
- You decide to withdraw £10,000 tax free cash from your uncrystallised pot.
- Tax-Free Cash: 25% of £40,000 = £10,000 (tax-free).
- Moved to Drawdown: The remaining 75% (£30,000) is moved into drawdown. Withdrawals from this £30,000 will be taxable.
- Remaining in the pre-retirement pot: £60,000 (£100,000 - £40,000) remains in your original uncrystallised pension pot, still eligible for future tax-free cash withdrawals.
This flexible approach allows you to access a portion of your pension tax-free while keeping the rest invested to potentially grow further.
❗️ Important: Money Purchase Annual Allowance (MPAA)
Taking only your 25% tax-free cash Via FAD will not trigger the MPAA. MPAA is only triggered when you take your first taxable income withdrawal from your drawdown account, or if you take an Uncrystallised Funds Pension Lump Sum (UFPLS).
Need Further Guidance?
Choosing how to access your pension is a significant decision. For personalised advice or if you have any questions, we recommend consulting MoneyHelper for a free Pension Wise appointment or seeking professional financial advice.