This paper presents an integrated approach for reliability planning and risk estimation in active distribution systems. By incorporating the use of accurate reliability equivalents for different MV/LV networks and load subsectors, a probabilistic methodology is proposed to capture both power quality and reliability aspects in power system planning, which potentially avoids the underestimation of system’s performance at bulk supply points. A ‘time to restore supply’ concept, based on security of supply legislation, is introduced to quantify the effect of different network functionalities such as the use of backup supply or automatic/manual reconfiguration schemes. The range of annual reliability indices reported by 14 network operators in the UK is also used for the validation of reliability results, which allows estimating the risk of interruption times above the Regulator-imposed limits. Accordingly, conventional reliability assessment procedures are extended in this paper by analysing a meshed urban distribution network through the application of a time-sequential Monte Carlo simulation. The proposed methodology also acknowledges the use of time-varying fault probabilities and empirical load profiles for a more realistic estimation of customer interruptions. A decision-making approach is shown by assessing the impact of several network actions on the accuracy of reliability performance results.