That means, when you go into drawdown, you could take the first 25% of your pension tax-free. That means you’d be entitled to 25% of it tax-free, so that’s £25,000. So, for example, imagine that your pension contained £100,000. Taking your tax-free lump sumįrom age 55 (rising to 57 in 2028), you’re able to access the first 25% of your pension funds as a tax-free lump sum. Naturally, there are a few pension drawdown rules that you may want to keep an eye on if you choose this method for your retirement. The Pension Freedoms legislation massively changed the game when it came into effect, providing savers with more flexibility and choices over how they can access their pension pot. In the past, the only way to access your retirement savings was typically to purchase a pension annuity, a type of insurance product that then provides a guaranteed income for life. Pension drawdown has been a popular option for many retirees since the introduction of the Pension Freedoms legislation in 2015. Pension Freedoms created more flexibility for retirement income You can only use pension drawdown if you have a defined contribution pension, not a defined benefit (or “final salary”) pension.
Meanwhile, you can leave the rest of your pension fund invested, allowing your money to continue potentially generating returns in the stock market. You can do this from age 55, rising to 57 in 2028. When you put your pension into drawdown, it means that you can take income from it as and when you need it. Pension drawdown, also sometimes referred to as “income drawdown” or “flexi-access drawdown”, is a method of withdrawing part of your pension funds while leaving the remainder of your money invested. So, while the upfront monthly cost of the SIPP can seem off-putting, there may be savings to be made when it comes to drawdown fees. Each trade then typically costs a fee, starting from £7.99.Ĭrucially, as you pay a monthly fee for your SIPP, interactive investor won’t charge a fee to move funds into drawdown. The SIPP that interactive investor provides gives you access to a range of assets, from shares and funds to investment trusts and more.Īs you can see in the table above, you will pay a flat fee of £12.99 service fee to hold the account. One of the largest investment platforms in the UK, interactive investor announced the launch of its new self-invested personal pension (SIPP) in March 2022.Īs of May 2022, interactive investor has £55 billion of assets under management, making it the UK’s largest flat-fee investment provider. Yes – see provider site for types of accepted transfers. £7.99 per trade for a range of investments. Best Performing Drawdown Pension Providers.Best CFD Trading Platform for Beginners.
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