But in 2011, the government revealed it wished to give the nation greater freedom to invest or spend their pension pots as they wished and created the option of flexible drawdown.
As the name suggests, flexible drawdown gives investors greater freedom, removing the cap on the income they can take – subject to certain conditions being met.
Flexible drawdown is a form of income withdrawal where an income is paid direct from your pension scheme. There is no limit on the amount that your pension scheme can pay you in any year.
You can take as much or as little as you like. If you want to, you can take out all the funds in your arrangement as one payment.
But just how flexible is this latest form of drawdown? Who should consider using flexible drawdown, what the pros and cons of this service are and how to go about taking cash using this facility are subjects tackled in this FTAdviser guide.
Supporting material has been supplied by Mike Morrison, head of platform marketing of AJ Bell; Adrian Walker, retirement planning manager of Skandia; Tim Stock, technical consultant of Wesleyan Assurance Society; and Alastair Black, head of customer income solutions for Standard Life.