RPSM09103610 - Technical Pages: Member benefits: Drawdown pension: Flexible drawdown declaration
This guidance has been written from the members’ perspective.
Flexible drawdown pension: Making a declaration
What information do I need to give my scheme administrator if I want to use flexible drawdown?
Can I take flexible drawdown more than once under the same arrangement?
Can my flexible drawdown declaration cover more than one arrangement?
I made a flexible drawdown declaration covering multiple arrangements in one of the registered pension schemes in which I have money purchase arrangements. Do I have to make a further declaration if I transfer to this scheme a drawdown pension or funds from an arrangement from which I have not yet taken any benefits from another of the schemes of which I am a member?
I have funds in money purchase arrangements in more than one registered pension scheme. The same person administers each scheme. Can I make a single flexible drawdown declaration covering all these arrangements?
I made a valid flexible drawdown declaration which my scheme administrator accepted and so I started to receive my pension as flexible drawdown, Do I have to make a further declaration if I transfer this pension to another registered pension scheme?
I have supplied a flexible drawdown declaration which my scheme administrator accepted and so I started to receive my pension as flexible drawdown. My scheme administrator has since told me that the declaration may be invalid - are there any tax consequences as a result of an invalid declaration?
What information do I need to give my scheme administrator if I want to use flexible drawdown?
[Regs 2 & 3 The Registered Pension Schemes (Prescribed Requirements of Flexible Drawdown Declaration) Regulations - SI 2011/1792]
To qualify for flexible drawdown you must give a declaration to your scheme administrator. This declaration must be signed and dated and contain the following information.
- Your full name and address,
- Your National Insurance number, and
- details of each pension source that allows you to meet the £20,000 minimum income requirement.
The details you need to give your scheme administrator about your pension income for each source of pension income are
- the name and address of the person paying the pension, and
- the total amount of pension income payable in the tax year in which the drawdown declaration is made.
The declaration must also contain statements from you that confirm that
- the flexible drawdown conditions are met
- the contents of the declaration are correct and complete to the best of your knowledge or belief, and
- if you have previously made a flexible drawdown declaration this declaration was accepted by the relevant scheme administrator
If you do not give a complete, signed and dated declaration containing this information to your scheme administrator you do not qualify for flexible drawdown. Any drawdown pension will be capped drawdown. Under the Regulations there is no facility for making a declaration on-line as it has to be signed in writing.
If you are not entitled to a National Insurance Number for any reason, you must tell your scheme administrator this. If you have a unique tax reference number then you should give this to the scheme administrator. An alternative process will then be applied and your declaration can still be valid. Your scheme administrator should be able to provide you with information about this alternative process. This alternative is only for the relatively few instances where you may not be entitled to a national insurance number. It does not cover the situation where you have forgotten or lost your number.
Can I take flexible drawdown more than once under the same arrangement?
Yes. You can arrange your affairs so that you designate funds into drawdown pension at different times. Flexible drawdown works at arrangement level. So, if you are designating funds under the same arrangement where you are already using flexible drawdown you do not need to complete another flexible drawdown declaration.
Can my flexible drawdown declaration cover more than one arrangement?
Yes, provided you meet the other conditions for flexible drawdown and the declaration is valid and accepted by the scheme administrator of the scheme in which the arrangement is held.
Where a declaration has been accepted it must result in you becoming eligible to receive flexible drawdown pension. This means you must have designated sums or assets in an arrangement as available for the payment of drawdown pension. Together with the flexible drawdown conditions, this means that a multiple arrangement declaration can only apply to arrangements where you have made a designation and will be taking flexible drawdown. And the declaration should make it clear which arrangements it covers.
A multiple arrangement declaration will not cover:
- arrangements where no designation has occurred at the time you make your declaration
- arrangements set up after you have made the declaration (whether or not this is to receive a transfer)
- arrangements you have in a different registered pension scheme with the same scheme administrator.
And you must remember that the scheme administrator has to be prepared to accept a multiple declaration, they are not required to do so.
I made a flexible drawdown declaration covering multiple arrangements in one of the registered pension schemes in which I have money purchase arrangements. Do I have to make a further declaration if I transfer to this scheme a drawdown pension or funds from an arrangement from which I have not yet taken any benefits from another of the schemes of which I am a member?
Yes, if the transferred funds are put into a new arrangement in the receiving scheme. See previous question. But if the transferred funds are put into one of the arrangements covered by your declaration, a further declaration isn’t needed.
I have funds in money purchase arrangements in more than one registered pension scheme. The same person administers each scheme. Can I make a single flexible drawdown declaration covering all these arrangements?
No. You may be able to make a single declaration covering all the arrangements you have in one scheme. But you will need to make separate declarations for each scheme in which you have an arrangement.
I made a valid flexible drawdown declaration which my scheme administrator accepted and so I started to receive my pension as flexible drawdown, Do I have to make a further declaration if I transfer this pension to another registered pension scheme?
No. The second scheme administrator can continue to pay your flexible drawdown pension as though it is the same pension so you do not need to make another declaration.
I have supplied a flexible drawdown declaration which my scheme administrator accepted and so I started to receive my pension as flexible drawdown. My scheme administrator has since told me that the declaration may be invalid - are there any tax consequences as a result of an invalid declaration?
If a flexible drawdown declaration turns out to be invalid, for example due to it containing incorrect information or not being signed, then any pension actually drawn will have to meet the requirements for capped drawdown. This means that any amount paid in excess of the capped drawdown limit will not be drawdown pension and may be an unauthorised payment.
You may be subject to a penalty if you fraudulently or negligently give incorrect information on your declaration. Please see RPSM12100000 for more detail.
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