Pension drawdown lets you take a regular income from your pension pot while the rest of your fund continues to grow.
We explain how pension drawdown works and outline our top pick of providers below.
- What is pension drawdown?
- Who are the top pension drawdown providers?
- How do we rate pension drawdown providers?
Read more: Best ready-made personal pensions
This article may contain affiliate links that can earn us revenue*
What is pension drawdown?
Pension freedom rules introduced in April 2015 allow people aged 55 and over to take money from their pension, rather than buying an annuity, which provides you with a guaranteed income for life.
Pension drawdown offers more flexibility and control over your pension savings. But you need to be clued up and disciplined to ensure you don’t withdraw too much, or invest it badly, and run out of money in retirement.
We go into lots more detail in our guide on pension drawdown.
Our top-rated pension drawdown providers
AJ Bell
Best for low cost and a wide choice of investments
AJ Bell’s self-invested pension plan has been awarded a five-star rating from Times Money mentor, but it gets four stars for its drawdown product. The provider misses out on five stars because it charges £100 + VAT each year for taking regular income drawdown payments.
Here are the main features:
-The SIPP allows trading in shares, funds, investment trusts and ETFs
-Maximum platform fee charged is 0.25%
-£150 to purchase an annuity
-Free to set up drawdown
Capital at risk. The tax treatment of your investment will depend on your individual circ*mstances and may change in the future.
Need advice?
Fees can really cut into your investment returns, so make sure you understand what you are paying. There are lots of pensions options, if you are unsure it’s always best to consider speaking to a financial adviser. Kellands* is offering all of our readers a free hour-long session* with one of its independent financial advisers. They can get a good idea of your financial goals, and help you take the first step to achieving them.
Is a drawdown pension worth considering?
Unbiased connects you to a qualified financial adviser to demystify your pension options.
Important information
Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
