Pension drawdown
The flexible way to take retirement income
Important information - the value of investments and the income from them can go down as well as up so you may get back less than you invest. Eligibility to invest in a SIPP and tax treatment depends on personal circumstances and all tax rules may change in the future. You cannot normally access money in a SIPP until age 55 (57 from 2028). It’s important to understand that pension transfers are a complex area and may not be suitable for everyone.
Many people find the prospect of entering drawdown a little daunting. It needn't be. At Fidelity we're here to guide you through it.
Pension drawdown allows you to take the income you want, whenever you need it - giving you total flexibility over your retirement savings. And, as the money you don't drawdown stays invested, it has the potential to continue to grow and provide for your future although this isn't guaranteed. It'll keep benefitting from tax efficiencies too. It can also be passed onto your loved ones when you die.
Take what you want, when you want
You’ve worked hard to save for your retirement. Perhaps you've got it all mapped out. Or perhaps you're looking forward to going with the flow. Either way, if you're looking for flexibility when accessing your pension savings, you might want to think about pension drawdown.
But drawdown is just one of the ways you can take an income from our award-winning Self-Invested Personal Pension (SIPP). And because we understand it's a big decision, we're here to support you and make the necessary arrangements - either through our online service or with the help of our retirement specialists.
Reasons to choose drawdown with Fidelity
Income flexibility - you choose how much to take from your pension, and when to take it, as your circumstances change. This includes taking up to 25% as tax-free cash, either as a lump sum or in stages, as long as this amount is not higher than your remaining lump sum allowance.
No drawdown fees - you don’t have to pay to draw down your pension from Fidelity's award-winning SIPP. There’s no set up, one-off withdrawal or annual drawdown fees. All you pay is our usual service fee for our SIPP and the fund/investment charges based on what you choose, set by the companies and funds you decide to invest into.
Easy access to your money online - you can take taxable income payments or tax-free cash or lump sums online. Find out how to withdraw your money.
Specialist support - Fidelity's retirement specialists are just a phone call away when you need them. They can make the complex world of pension drawdown easier to navigate by clearly taking you through your income options and demystifying your lifetime and money purchase annual allowances. They can also help you set up regular income payments.
If your pension isn't already in a Fidelity SIPP, you'll need to transfer it to us before you enter drawdown. Your pension account value must be at least £50,000. If you've already started taking drawdown from your pension from another provider, you can still transfer it.
Ready to access your pension? Help is at hand
When the time comes to access your pension, you’ve got options. If you’re already a customer, you can read about how to take tax-free cash, lumps sums or regular income here. On the other hand, if you’d like to talk to someone, there’s no fee for our comprehensive guidance service. It’s ideal if you want to make your own decisions. But if your needs are quite complex, or you really want a personal recommendation, then advice might suit you better. Any advice you receive is personalised to your needs, making this a service you pay for.
Bring your pensions together into Fidelity’s SIPP
Call out retirement team
Pension Wise
Things to consider with pension drawdown
There's lots to consider when planning retirement, and we offer a wealth of guidance in the pensions & retirement section of our website. From retirement and legacy planning, to allowances and choosing investment options.
- You can usually take up to 25% of your pension pot as a tax-free lump sum
- You have the option of taking this cash from your pension at any point from age 55 (57 from 2028)
- The rest of your money stays in your pension for you to manage
- Flexibility of taking money when you need it and making further contributions if you wish
- If you manage your money carefully and regularly review how any income is reducing your pension pot, you can help to ensure that your money lasts as long as possible
- You can choose where to invest your pension to meet your needs
- Your pension can be passed onto your beneficiaries when you die
- Your pension often sits outside your estate and doesn't normally count towards your estate's value (although this is due to change from 6 April 2027). This means your pension won't usually count towards your inheritance tax allowance and can be a great way to leave something to loved ones. It's important to have your beneficiary and expression of wish forms up to date. If your death occurs after your 75th birthday, the benefits paid will be subject to your beneficiaries income tax rate.
- Once you've taken the 25% tax-free lump sum that you're usually allowed to withdraw, all income is taxed the same as any earnings you have. You should ensure you understand what tax rates might apply to you
- You could run out of money if you take too much income from your pension pot
- Your pension pot could go down dramatically if you don’t regularly monitor how your funds are performing
- You need to decide which funds your pension pot is invested in as the performance of any funds will affect how long any income will last
- Bringing your pensions together can make it much easier to plan for your retirement – and help you look after your money in the years ahead.
- It could open more investment options or more types of retirement income, if your current provider has limited options available.
- It could also save you money as costs can vary significantly between providers. And, over a long retirement, small changes in price can lead to a big difference in how much you have.
Important Information: It’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our SIPP transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances, we strongly suggest that you seek advice from one of Fidelity's advisers or an authorised financial adviser of your choice.
- The annual allowance is the limit on how much you can save into your pensions each tax-year while still benefiting from tax relief on your contributions.
- Once you begin taking taxable money from your pension, generally you'll be subject to a reduced annual allowance that limits the tax relief that you can receive on future contributions.
- If the value of your pensions is close to £1,073,100, or likely to reach this by the time you retire, then you need to know about the Lump Sum Allowance as well as the Lump Sum and Death Benefit Allowance
Our guide has everything you need to help you weigh up your options and see if drawdown is right for you. By downloading the guide, you'll also receive monthly retirement emails packed full of hints and tips to help you make smarter decisions.
Our award-winning approach
We don’t like to blow our own trumpet, but it's nice when someone else does. We’re also proud to recognised by Which? as a Recommended Provider for our Self-Invested Personal Pension (SIPP) and Pension Drawdown.
Pension drawdown FAQs
Drawdown allows you to leave your money in your pension pot and take regular income or lump sums from it as and when you want. It's often referred to as income drawdown. Any money left in your pension pot remains invested, which may give your pension pot a chance to grow, but it could go down in value too.
It can depend on your pension provider, but if you choose to apply with us, we'll use the Fidelity SIPP as your pension account. You won't normally be able to start drawdown until you are 55 (57 from 2028). When you're close to reaching your selected retirement age, we'll send you a pack which will provide you with lots of useful information about your available options - which includes accessing our online drawdown service and talking to a retirement specialist.
If you have any questions about retirement planning in general, the income options or want to apply for drawdown, you can find out more here or call our retirement team on 0800 41 41 61.
You can usually access money from your personal pensions - including those set up by your employer - when you reach 55 (57 from 2028).
You’ll need enough money to live off throughout the whole of your retirement. Your retirement could last for 30 years on more (depending on when you retire and how long you live). Therefore, you’ll need to carefully plan how and when you access your money, and how much you take.
How long your pension income will last will depend on how much you've saved over the course of your life, how much you withdraw each time you take income, how your investments perform over time and how long you need the money.
You can find out more about how long you may need your pension to last on ons.gov.uk or you can explore our retirement calculators to see how much you may need.
Depending on the type of pension you have and your current circumstances, you can flexibly take whatever level of income you want – and change it when you need to. Each of the main options usually allow you to take up to 25% of your pot tax-free.
Our pension drawdown calculator can help you understand how much income you could take and how long your pension might last if you opt for a flexible retirement income (drawdown).
Yes. When deciding how you want any money you're moving into drawdown to be invested you have the option of choosing one of our Investment Pathways. These are investments designed around four clear targets for retirement income, ranging from ‘I have no plans to touch my money in the next five years’ to ‘I plan to take out all my money within the next five years’. You can find out more about the Fidelity Investment Pathways here.
Yes, you can still make pension contributions and you can still receive tax relief on these contributions. However, once you begin withdrawing taxable money from your pension you may be subject to the money purchase annual allowance (MPAA). The MPAA reduces the amount that can be contributed to your money purchase pensions in any one tax-year while still benefiting from tax relief to £10,000 (compared to the standard annual allowance of £60,000).
Important information: This information and our guidance tools are not a personal recommendation for any particular product, service or course of action. Pension and retirement planning can be complex, so if you are unsure about the suitability of a pension investment, retirement service or any action you need to take, please contact our retirement team on 0800 41 41 61 or refer to an authorised financial adviser of your choice.
