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Capped drawdown allows the investor to keep their funds invested past retirement age although in doing so the value of the pension fund can fall as well as rise, and benefits are not guaranteed.

With capped drawdown, investors are able to choose how much income to draw each year and in what way (regular or lump sum), subject to a cap. The Government prescribes a table of rates which is used to set the maximum amount of income the investor can receive.

The income limit is reviewed every three years and then every year after the investor turns 75, with the income payments being adjusted if necessary. At each review, we supply an updated illustration showing the possible future benefits, which you will be able to review with your client. If the investor stays in capped drawdown, their annual allowance and ability to use carry forward will not be affected (unless they trigger the money purchase annual allowance in another pension scheme).

No new capped drawdown arrangements can be set up after 5 April 2015. However, existing arrangements will remain in capped drawdown, and we can accept capped drawdown transfers into our plans.

Investors may make further contributions to their SIPP after they have entered capped drawdown if they have not crystallised the whole of the fund.  

For more information and prices, please see our literature library.

Illustrations for capped drawdown are available from   

Go back to our Drawdown page.



This information is intended for investment professionals and should not be relied upon by private customers or any other persons.