The term ‘drawdown pension year’ was introduced with effect from 6 April 2011. It is largely a renaming of the terms ‘unsecured pension year’ and ‘alternatively secured pension year’ which applied before that date (FA 2011, Sch. 16, para. 89 and para. 93).
A limit is imposed on the amount of drawdown pension which can be drawn from the drawdown pension fund in any pension year (a ‘capped’ drawdown pension fund- the restriction does not apply where the member has elected for ‘flexible drawdown’ - see pension rule 5 at ¶378-300). This limit is termed the ‘basis amount’ (see ¶392-670).
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