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Important information - What you do with your pension is an important decision that you might not be able to change. You should check you're making the right decision for your circumstances and that you understand all your options and their risks. The government's free and impartial Pension Wise service can help you and we can offer you advice if you’d like it. The information on our website isn’t personal advice.
What is pension drawdown?
Drawdown is one of the most flexible ways to access your pension, available from age 55. You can usually take up to 25% as a tax-free cash lump sum and keep the rest invested for later. You’re in control of how much income you take (which is taxable), and can make withdrawals whenever you want to.
You have the freedom to choose your own investments, and if they perform well you could receive a growing income throughout retirement. Any money left over when you die can be passed on to your loved ones, often tax free.
Tax rules can change, and the benefits will depend on your own circumstances.
What are the risks?
Compared with other options like an annuity, which provides a guaranteed income for life, there’s more risk with drawdown.
Investments can fall and rise in value, so your income won’t be secure, and you might get back less than you originally invested.
You'll need to think carefully about the income you’ll need when you’re older. You could run out of money if your investments don’t perform as you’d hoped or you take too much income too soon.
These risks mean drawdown won’t be right for everyone, and you'll need to regularly review where you're invested and how much income you're taking.
Pension drawdown charges
Drawdown is free to set up. And you can start, stop or change your income withdrawals whenever you want, free of charge.
Our yearly charge for holding investments is never more than 0.45%. Some investments will have their own annual charges, so please check these first before you invest.
It’s free to buy and sell funds. Other dealing charges depend on the type of investment and how often you trade.
How to apply for pension drawdown
Drawdown is available through the HL Self-Invested Personal Pension (SIPP). You can view our charges here.
Apply online or by post
You should understand the risks and benefits of drawdown before you start, and our drawdown calculator can help to make sure it's right for you.
When you're ready, you can choose how you want to apply.
Transfer an existing drawdown pension
If you're looking for a better service and greater value for money, you could consider transferring to another drawdown provider.
Before you transfer, check you won’t lose valuable guarantees or need to pay high exit fees.
Why choose pension drawdown with HL?
We’re award-winning - We've won over 200 awards, including Best Buy Pension 2026 from the Boring Money Awards.
Trusted by over 2 million clients - We're a financially secure FTSE-listed company , regulated by the FCA.
Help choosing investments- With the latest news and insight from our team of experts.
Manage your pension with ease - 24/7 access online and with the HL app.
Support on hand- Manage the account yourself or take personal advice if you need it.
Pension drawdown FAQs
Typically a drawdown pension is held in trust. This means it doesn’t form part of your estate, so it won’t be subject to inheritance tax. Because the pension is held in trust, you normally need to nominate a beneficiary. If you die before the age of 75, the value of your drawdown pension will be passed on completely tax free. If you die after the age of 75, the value will be taxed at your beneficiary’s marginal rate.
You don’t have to move your entire pension value into drawdown. You can choose to move your pension into drawdown in stages, moving a portion of your pension value each time. This is known as phased drawdown.
Each time you move a part of your fund into drawdown you can usually take up to 25% tax free. You can then draw a flexible income from the rest at any point which is taxable. You choose how much income to take, if any, and can start, stop or vary the amount you withdraw. The rest of the fund stays invested as you choose, so it can rise and fall in value and you could get back less than you invest. Income is not secure and could fall if you take too much out, your investments don’t perform as you hope or you live longer than expected.
The emergency tax code will normally be applied to your first income payment (unless you have a valid P45). This could mean the incorrect amount of tax is deducted initially. In this case, you may need to reclaim any overpaid tax directly from HMRC.
Guidance, help and advice
Guidance from Pension Wise
Pension Wise is a free, impartial government service for anyone aged 50 or over, with a UK based personal or workplace pension.
It can help you understand what type of pension you have, how you can access your savings and the potential tax implications of each option. But it isn’t financial advice.
Have a question?
Our Bristol-based helpdesk are here for you six days a week. Our friendly and knowledgeable team are ready to answer your questions no matter how big or small.
Call us on 0117 980 9926.
Opening hours
Monday - Friday: 8am - 5pm
Saturday: 9.30am - 12.30pm
Alternatively, view our drawdown FAQs.
Retirement Advice from HL
Not sure if drawdown is right for you, or unsure where to invest? Our financial advisers can give advice on your pensions and work with you to:
Feel confident about when and how to take your pension
Match all your investments to your personal goals and income strategy
Help you plan for later life and Inheritance Tax
Retirement essentials
How to choose the best pension drawdown provider for you
A checklist to help you find the provider that best meets your needs.
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We look at four reasons why people choose to leave their current drawdown provider and how they might benefit from transferring to Hargreaves Lansdown.
Annuity vs. drawdown: or can I have both?
Discover what retirement option could be right for you. Plus, we reveal how you could combine your options to benefit from security and flexibility.