What is Pension Drawdown?

Pension Drawdown lets you access 25% cash tax-free from your Defined Contribution pension pots and leave the rest invested, giving you the flexibility to choose how and when you withdraw the rest of the money.

Leaving your money invested gives it more chance to grow, though, as with any investment, there's a chance it could go down in value too.

If you're comfortable keeping some of your pension pot invested, and that you can manage your pension pot to make sure you have enough money in retirement, pension drawdown could be a good choice.


  • Access your tax-free cash

    After you transfer into the pension drawdown we’ll pay the tax-free cash sum.

  • A flexible income

    You're in control of how much you take and when. You could choose to take a regular and/or occasional income, or no income at all.

  • Simple investment choices

    Choose one of four objectives for what you would like to do with your money within five years and the objective you choose will be linked to an investment solution.

  • Pension Wise free guidance appointment

    Pension Wise is a government service from MoneyHelper that offers free impartial pension guidance. Available if you're 50 or over, you should consider having a free Pension Wise appointment, before you decide how to access your pension.

  • Am I eligible?

    You must be aged 55 or over and have a Defined Contribution pension. We can't accept pensions that are already in drawdown so you must not have accessed the tax-free cash from your pension yet. We can only accept transfers of your full pension pot.

  • I’m happy to apply for pension drawdown online

    You can only apply for pension drawdown online, we’re unable to process applications over the phone.

  • I want control over my pension

    If you're happy to choose one of four objectives which will be linked to an investment solution, this option may be right for you.

  • I want a flexible income

    If you don’t need a guaranteed income and want to have the flexibility to dip into your pension when it suits you, this product may be right for you.

  • Your income is taxable

    After you've taken your tax-free cash, any income you take will be subject to income tax. The amount of tax you pay on income from the plan will depend on your circumstances, and may change based on your income tax rate.

  • Your state benefits could be affected

    This plan could affect your entitlement to any means tested state benefits.

  • The value of your pension pot is not guaranteed

    The value of your pension pot isn’t guaranteed and will depend on several things such as how much you pay in and when you choose to take your money. It’s also important to note the value of your pension pot can go down as well as up. Further details on the potential risks can be found in the Key Features Document.

  • You may run out of money

    You should regularly review the amount you are withdrawing. Because your income isn’t guaranteed, if your investment returns do not meet your expectations, if you live longer than expected or if you take too much money out too quickly then you could run out of money.

  • There are some costs involved

    There are charges for managing your account and charges applied to the investments you hold. We have a service charge of 0.25% of the value of your Pension per year. There is also a Fund Management Charge which differs from fund to fund. More detail on charges can be found below and in the Key Features Document.

  • Transferring your pension may affect your guaranteed benefits

    Before you transfer a pension to us you should check if you have any valuable benefits with your existing provider. We don’t accept Defined Benefit Pensions, those with Guaranteed Annuity Rates, With Profits or Guaranteed Minimum Pensions.

  • If you would like to continue to contribute to your pension, this option may not be suitable

    Your whole pot will be transferred to drawdown and your current pension will be closed. If you’d like to transfer only part of your pension so you can continue contributing, another provider may be able to offer this. Taking an income from your pension could limit the amount you can contribute to pensions in the future.

Investment pathways are a way for you to select the funds that you are investing in when you are in drawdown. You choose one of four objectives for what you would like to do with your money within the next 5 years and the objective you choose will be linked to an investment solution. When you choose your investment pathway, you won't be locked in and can change it at any time. There's also more detail on the objectives themselves within the application.


Objectives Investment Key Investor Information Document
I have no plans to touch my money in the next 5 years Multi-Index 5 Fund Download PDF
I plan to use my money to set up a guaranteed income (annuity) within the next 5 years Sterling Corporate Bond Index Fund Download PDF
I plan to start taking my money as a long-term income within the next 5 years Multi-Index 4 Fund Download PDF
I plan to take out all my money within the next 5 years Short Dated Sterling Corporate Bond Index Fund Download PDF

Pension Drawdown Calculator

Our calculator helps you see how much income you could receive with pension drawdown, and allows you to compare this with the income you could receive from a pension annuity. Don't include any final salary pensions or your state pension.

I am years old and I have saved in my pension pots


Total pension pot
Tax-free cash 25%
Remaining pension pot

The example below gives you an idea of the income our pension drawdown product might provide. It assumes you take the maximum 25% tax-free cash sum available but you can choose to take less. The result is an example only and is not advice. The actual income you can get will depend on your individual circumstances.

Flexible income you can take when you want, it's not guaranteed

Annual income
Investment return
  • You decide the amount of income and when it’s paid
  • The value of your pension can go up or down and you could get back less than you paid in
  • Income isn't guaranteed, you could run out of money

The 'Annual income' figure shows the amount before any tax has been deducted. You can change it using the drop-down – the more you take, the less time your money will last. You can see the effect of three different rates of return on the size of your pot by using the 'Investment return' drop-down.