With flexi-access drawdown you can take some of your money (usually up to 25%) as a tax free cash lump sum.
The rest is used to pay you a taxable income. Either over a period of time or all at once.
Once you take a taxable income your annual allowance for future pension savings falls from £40,000 to £10,000. If you just take tax free cash it stays at £40,000 until you take a taxable income too.
Please remember the value of your investments and any income from them can go down as well as up and you may get back less than the amount you originally invested.
Before you choose a SIPP, make sure you understand its aims and risks. Alliance Trust does not give advice. If you are unsure whether our SIPP is suitable for you, of the risks and commitments of investments and or of how much income to take and when, you should seek professional financial advice specific to your particular circumstances.