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Flexi-Access Drawdown vs Capped Drawdown

When you take income from your Self-Invested Personal Pension (SIPP), you will usually choose a drawdown option, a way of keeping your savings invested while taking income from them. There are two types that members will often hear about: Flexi-Access Drawdown and Capped Drawdown.

Flexi-Access Drawdown

This is the modern and most common form of drawdown since pension freedoms were introduced in April 2015

There is no limit on how much income you can take each year.
You can take regular income or one-off lump sums.
The first time you take a taxable income from flexi-access drawdown, you trigger the Money Purchase Annual Allowance (MPAA), which reduces how much you can contribute to pensions tax-effectively in future.
Flexi-access drawdown is the only type that can be set up today for new drawdown arrangements.

Capped Drawdown

This was the earlier style of drawdown used before April 2015:

It imposed an annual cap on how much income you could take based on factors such as age and gilt yields.
You cannot set up new capped drawdown plans anymore.
If you go above the cap, your plan automatically converts to flexi-access drawdown (and may trigger MPAA).
Members with existing capped drawdown can choose to stay within the cap or convert to flexi-access drawdown.

Key Differences

Feature	Flexi-Access Drawdown	Capped Drawdown
Set up today	✅ Yes	❌ No
Income limit	❌ No cap	✅ Annual cap
MPAA trigger	Yes (on taxable income)	Only if cap exceeded
Flexibility	High	Restricted

Which is right for me?

Since April 2015, many SIPP members who are accessing their pensions have opted for flexi-access drawdown due to its flexibility. If you had a capped drawdown plan before April 2015, you can keep it or move to flexi-access if your circumstances change.

Always consider tax and retirement income needs and speak to a qualified and regulated financial adviser who can help you to understand which option is better for you.