People hiking

Personal Pension Drawdown

55 or over? Access 25% tax-free cash from your pension pot and invest the rest, to use for a flexible drawdown income

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.

  • Transfer your existing pension drawdown
    When you apply for our Personal Pension Drawdown, you can transfer your existing drawdown to have access to our digital platform to setup and manage regular withdrawals as well as make additional withdrawals whenever it suits you.

  • 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 for Pension Drawdown?
    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 drawdown 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.

  • What if I'm a member of a Legal & General Workplace Pension?
    If you’re a member of a Legal & General Workplace Pension, you may have the option to access drawdown in that scheme, which could be more suitable for your needs. Please contact us for more information and details on how to get a quote.

  • The income you draw down 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 in the future.

  • 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.


Legal & General Retirement Advice Service

Our advisers are regulated by the Financial Conduct Authority (FCA) to give advice on an independent basis.

Find out more

Investment pathways are a way for you to select the funds that you're investing in when you're in drawdown.

You choose one of four objectives for what you would like to do with your money within the next five 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 five years Multi-Index 5 Fund Download PDF
I plan to use my money to set up a guaranteed income (annuity) within the next five years Sterling Corporate Bond Index Fund Download PDF
I plan to start taking my money as a long-term income within the next five years Multi-Index 4 Fund Download PDF
I plan to take out all my money within the next five years Short Dated Sterling Corporate Bond Index Fund Download PDF

Pension Drawdown calculator

Our Pension Drawdown 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. You don't need to include any final salary pensions or your state pension.

I am
years old.
I have
£
saved in my pension pots.

Apply for Pension Drawdown online

Get a personalised illustration that takes into account your personal circumstances, such as the value of your pension pot and how you plan to use the money. If it's right for you, and you have your pension details and paperwork ready, then you can apply online today.

If you're 50 or over, you should consider having a free Pension Wise appointment, before you decide how to access your pension.

Before applying for Pension Drawdown, make sure you read the documents below.

Personal Pension Drawdown key features (PDF 2.86 MB)

Personal Pension Drawdown terms and conditions (PDF 2.25 MB)

People on laptop

Moving your current drawdown

You can now transfer your existing drawdown into our Personal Pension Drawdown.

Once completed, you'll have access to our digital platform to setup and manage regular withdrawals as well as make additional withdrawals whenever it suits you.

Retirement income products compared

Guaranteed income (Pension Annuity)

Fixed Term Retirement Plan

Cash-Out Retirement Plan

Flexible income (Pension Drawdown)

Can it provide a regular pension income?

Yes

Yes

Yes

Yes

Can I choose a guaranteed income each month?

Yes

Yes

Yes

No

Is my income guaranteed to last my whole life?

Yes

No

No

No

Can I change how much I get?

No

No

No

Yes

Am I exposed to market movements, up or down?

No

No

No

Yes

Retirement Advice Service

At retirement pension planning advice from our team of expert financial advisers.

Our advisers are regulated by the Financial Conduct Authority (FCA) to give advice on an independent basis. That means they won’t just include our products in the recommendation they give you – if there’s a better option available, they’ll let you know.

Common Pension Drawdown questions

Drawdown is a flexible way to access your pension when you're aged 55 or over (57 from April 2028). After taking your tax-free cash, you invest the remainder of your pension to access when you want. You enjoy flexibility over how and when you withdraw the remaining money.

You’re responsible for managing your money through your retirement, so should feel comfortable with doing this.

If you’re looking to transfer only part of your pension into drawdown, this is not something we currently offer so this product may not be suitable for you. We also can’t accept pension pots that you’ve already taken tax-free cash from.

Before choosing pension drawdown, it's important to understand the main taxation rules:

The first 25% of your pension pot is usually tax-free. All income or subsequent drawdowns will be subject to income tax.

To be able to access your tax-free cash, you'll need to do this at outset as you can't take your tax-free cash after you've moved your pension pot into drawdown.

This means that if you take large amounts out in a single tax year, you could end up in a higher tax bracket, and pay a higher rate of tax, than you would otherwise.

Alternatively, if you take the same amounts over a number of years, you could pay less tax.

For example, if you had £100,000 in your pension pot and took your 25% tax-free cash, you'd have £75,000 left. Depending on how you take this, you may pay more or less tax.

If you take it all as cash in the first tax year, then assuming you have no other taxable income, the tax you will pay will be: 
  Amount taken Tax paid 
Tax year 2023/24 £75,000 £17,432
Total tax paid   £17,432
If you spread your drawdown over two tax years, then assuming you have no other taxable income, the tax you will pay will be: 
  Amount taken Tax paid 
Tax year 2022/23 £37,500 £4,986
Tax year 2023/24 £37,500 £4,986
Total tax paid   £9,972

 

The amount of tax you pay on your income from the plan will depend on your individual circumstances.

Any tax you need to pay will be deducted from your withdrawals by your pension provider before the withdrawal is paid to you, just like an employer deducts tax before paying you a salary or wage. When you take your first withdrawal, you'll probably be taxed on an emergency tax code. If this results in you overpaying tax in that tax year, you should receive a refund after the end of the tax year, alternatively you may be able to claim it back directly from HMRC during the tax year. Tax rules may change in the future and are subject to your individual circumstances.

From 1 June 2022, the Financial Conduct Authority now requires pensions providers to refer customers to Pension Wise guidance and explain the nature and purpose of this guidance, when they decide to access their pension savings.

Pension Wise from MoneyHelper is a free and impartial Government pension guidance service.

Your decision about which options to choose is likely to be influenced by many factors, such as how much income or cash you need now and in the future. You should also consider your personal circumstances and the impact that your choices may have on taxation, State Benefits, Annual Allowances and any dependants.

Choosing between pension drawdown and an annuity is an important decision. There are several key areas you should look at when making your decision, including whether you want a guaranteed income for the rest of your life, or whether you want a more flexible approach. We have a suite of information available to help you understand your options.

Compare pension drawdown vs. an annuity
Use our retirement income calculator

No, if you can't complete your application then you won't be able to save it for later. You'll need to re-start the application. If you're ready to apply, you'll need details of your current pension provider, estimated value of your pension pot, and policy number, as well as your National Insurance number.

Flexi-access drawdown was introduced in April 2015 and replaces what was previously called flexible pension drawdown. The main difference is that with flexi-access there is no requirement to have a minimum income from other sources.

All drawdown products are now designed to offer flexi-access drawdown.

You’re responsible for managing your money through your retirement, so should feel comfortable with doing this.

If you’re looking to transfer only part of your pension into drawdown, this is not something we currently offer so this product may not be suitable for you. We also can’t accept pension pots that you’ve already taken tax-free cash from.

Next steps

Now that you've learned more about our Pension Drawdown and are happy that it is right for you, you can apply online. Or take a look at other products available as part of your shopping around. Other providers may have more appropriate products or be able to offer a higher level of retirement income.

Couple of laptop

Need some help?

Making well-informed decisions about how to finance your retirement is important so it’s worth shopping around and using available guidance and advice, before you buy:

Pension wise logo

Retirement guidance

Pension Wise from MoneyHelper

The government’s free and impartial service, offering guidance to make money and pension choices clearer.

To find out more or book an appointment online click below or call.

0800 138 3944

Monday to Friday 8am to 6.30pm.
Calls may be recorded and monitored.

Call icon

Speak with us

Our colleagues in Cardiff are always happy to answer your questions or help you apply for a quote.

0808 189 9551

Monday to Friday 9am to 5pm.
We may record and monitor calls.

advice text

Retirement advice

Retirement Advice Service from Legal & General

Our advisers are experts in retirement regulated by the Financial Conduct Authority , so you can trust them to provide impartial advice and a personal recommendation that’s right for you.

0808 304 9386

Monday to Friday 9am and 5pm.
Calls may be monitored and recorded.