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“A simple way to invest, at a fraction of the cost of its rivals”

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What is flexible income (drawdown)?

Flexible income (drawdown) allows to you keep your pension savings invested when you reach retirement and take money out of your pension pot. You can usually take up to 25% of your pension savings tax-free upfront. The taxable part of your pension is then moved into a drawdown account.

You can withdraw as much or as little you want from your remaining pension. However, you do not have to take all of your full tax-free cash entitlement in one go.

How flexible income (drawdown) works

  • Work out how much you need to live on

    Your pension has to last a long time, so it's essential to consider your needs before you decide how to withdraw.

  • Withdrawing your money

    You tell us how you want to withdraw your pension:

    • tax-free lump sum – you can usually take up to 25% of your pension tax-free (up to a maximum of £268,275 across all your pensions)
    • regular or one-off income payments
  • Choose your investments

    When you take any tax-free money, we need to move money into your drawdown account. You'll need to decide how you want that money to be invested.

    Your can choose from our full range of funds. Or, to make things easier, we've created 4 investment pathways you can choose from. Each investment pathway is based on your retirement goal.

  • Adapt when you need to

    If your circumstances change, you can adjust your plan to your needs by speaking to us.

Our pension specialists are ready to discuss the process via pre-booked appointments if you are an existing client.

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A simple example

  1. If you have a pension of £100,000
  2. You decide to take the first 25% as tax-free cash which is £25,000
  3. The remaining £75,000 stays invested.
  4. For example, you could use this to take a regular income of £1,200 – which will be taxed as an income.

You can withdraw as much or as little you want from your remaining pension.

Our investment pathways

When you move money into drawdown, you can choose the option that best fits your plans.

What do you plan to do with the money in your drawdown account within the next 5 years?

Option 1

I have no plans to touch my money in the next 5 years

Your drawdown account will be invested in one of our Target Retirement funds. These aim to continue growing your savings while gradually reducing risk as time goes on.

 

Option 2

I plan to use my money to set up a guaranteed income (annuity) within the next 5 years

Your drawdown account will be invested in the U.K. Short-Term Investment Grade Bond Index Fund. This low-risk fund aims to preserve your retirement savings while giving you a small short-term return. We do not offer annuities but will transfer you to a new provider if you want one.

Option 3

I plan to start taking my money as a long-term income within the next 5 years

Your drawdown account will be invested in one of our Target Retirement funds. These aim to continue to grow your savings while gradually reducing risk as time goes on.

Option 4

I plan to take out all my money within the next 5 years

Your drawdown account will be invested in our Money Market fund. This low-risk fund aims to protect your retirement savings.

 

How much tax you might pay

You can usually take up to 25% of your pension tax-free. The maximum tax-free cash you can take from all your pensions is £268,275.

Any money you withdraw from the remaining 75%, in your drawdown account, will be added to any other income you have for that tax year.

You will pay tax on your drawdown income if you draw more than your personal allowance. How much depends on your total income for that tax year. HMRC has guidance on the tax you might pay.

Your first payment will likely put you on an emergency tax code. HMRC needs to provide us with your tax code before we can tax you correctly. You do not need to contact HMRC to change the tax code, but you can claim a refund on the tax you overpaid.

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Advantages and disadvantages of flexible income (drawdown)

You decide how much money to take and when to take it. You can set up an income that you can stop, start or change at any time.

Any money that you do not take now, you can leave invested so it has the potential to grow in a tax efficient way.

You can decide how you want your money invested.

We'll pay any money in your pension to your beneficiaries when you die. How much tax they'll pay on that money will depend on how old you are when you die and what your beneficiary’s tax situation is.

Stay in control of how much tax you'll pay by managing how much you take out of your pension.

If you do not trigger the Money Purchase Annual Allowance (MPAA), you might be able to carry forward unused allowances from previous years.

Compare your retirement options

 
Flexible income (drawdown)
Individual lump sums (UFPLS)
Annuity
Can I only take tax-free cash?
Will it trigger the Money Purchase Annual Allowance?
Only if you take income
Can I pass on this pension to a beneficiary if I die?
If my circumstances change could the pension adapt?
Which option can I carry on contributing to?
Do my investments remain invested?

How to apply for flexible income (drawdown)

1. Book a call

Log in to your account and book a call with our pension specialists to discuss your options. Submit a request for the withdrawal you want via your account.
 

2. Get an illustration

We'll create an illustration to show you how your withdrawal could impact your savings.



 

3. Review and agree

Review your illustration and book another call with our pension specialists to complete the final steps.


 

4. Receive payment

Once you've told us you are happy to proceed, we'll process your pension withdrawal to your bank account. You'll receive your pension withdrawal within 10 working days.

Already in drawdown with another provider?

It’s not too late - you can still transfer to us.

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Why choose us?

Low cost

Our account fee is just 0.15% of your investments and capped at £375 a year. With free withdrawals and no extra charges it means you keep more of your returns.

No minimum withdrawal amounts

Unlike some providers we do not have a minimum withdrawal amount, so you can take your tax - free cash in lots of smaller chunks if you want to.

UK-based support

Our pension specialists are on hand to help, no matter what the question.

Things to consider

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We are authorised and regulated by the Financial Conduct Authority.

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Covered

We are covered by the Financial Services Compensation Scheme.