Get an adjustable income


You can get an income from your pension pot that’s adjustable. This means you get a regular income but can change it or take cash sums if you need to.

  • You get 25% of your pot as a single, tax-free cash sum.
  • The other 75% is invested to give you a regular, taxable income.
  • You can adjust the income you take and when you take it.

This option is also known as ‘flexi-access drawdown’.

You’ll probably need to be involved in choosing and managing your investments. The value of your pot can go up or down.

Not all pension providers offer this option. If your current provider doesn’t offer it, you can transfer your pot to another provider but you might have to pay a fee.

Estimate how much you could get



The income you get from the investment is taxable. Your provider will pay you the income with any tax due already taken off.

You pay tax when you take money from your pot. This is because when you’re paying into your pension you get tax relief on your contributions.

Example You have a pot of £80,000 and take a tax-free lump sum of £20,000. This leaves you with £60,000 to invest. You get an income of £3,000 a year from your investment. If you pay 20% tax you’ll get £2,400.

If you take the 25% tax-free lump sum, you must get an adjustable income with the rest or use one of the other options.

You can move your pot gradually – you don’t have to move it all at once. Each time you move a sum, 25% is tax free.

If you choose this option, you can leave your money to someone when you die but they may have to pay tax on it.

Book a free Pension Wise appointment to find out more about what you can do with your pot.

How adjustable income works

You will need to decide how much you take out every year and how long your money needs to last.

Your provider will ask you how you want to invest your remaining pot when you move into income drawdown. You will either need to choose your own investments, i.e. ones that match your attitude to risk and objectives for your money, or some providers will offer you to choose from simple ready-made investment options which are linked to your retirement plans (these are called Investment Pathways). 

A financial adviser can help you to create an investment plan for your money. They can advise you on how much you can take out to make the money last as long as possible. They’ll charge you a fee for this.

Your provider is likely to charge you fees for managing your investments and whenever you get a payment.

If your provider goes bust you’ll be covered by the Financial Services Compensation Scheme.

Continue to pay in

If you have more than one pension pot, you can take an adjustable income from one and continue to pay into others. You may have to pay tax on contributions over £4,000 a year (known as the ‘money purchase annual allowance’ (MPAA)).

This includes your tax relief of 20%. For example, to get a contribution of £4,000 you would only have to pay in £3,200.

You may still be able to pay into the pot you take your adjustable income from but you won’t get tax relief on these payments.

Financial advice

If you’re interested in this option you might want to get financial advice first. A financial adviser can help you to compare adjustable income products and work out which is best for you.


Beware of pension scams contacting you unexpectedly about an investment or business opportunity that you’ve not spoken to them about before. You could lose all your money and face tax of up to 55% and extra fees.

Next steps

  • Ask your current provider if they offer flexi-access drawdown and what they charge in fees – if they don’t offer it, you can transfer your pot but you might be charged a fee.
  • Check if your pot has any special features that could mean you get a better deal, e.g. a guaranteed annuity rate.
  • Get financial advice if you’re interested in getting an adjustable income.
  • Shop around – ask providers what products they offer to suit your circumstances.
  • Get some estimates from other providers on how much your pot could grow and what the fees are – usually you just have to fill in a short form on their website. If you’re looking for products that offer simple ready-made investment options, you can use our investment pathways comparison tool to help you.
  • Make sure you know how much tax you’ll pay on any money you’re planning to take out.