Compare our best income drawdown pensions

Choose an income drawdown pension provider to draw an income from your pot during your retirement.

  • Compare deals from leading income drawdown plan providers
  • See charges and fees at a glance
  • Apply in minutes

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Compare income drawdown pensions from leading providers

You'll only find results from genuine companies. Our data experts check each company before we add them to our comparisons.

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How to compare income drawdown pensions

1

Consider your decision

An income drawdown allows you to get access to your pension funds from age 55, however you need to check carefully whether this is the best option for your circumstances. Your pension plan may offer a drawdown option however if not you can transfer your plan to another provider offering the best income drawdown pension.

2

Run a pension comparison

Have a look through your options to find the best income drawdown pension plan, importantly terms, starting sums and fees can vary between providers so check any conditions attached to the plan then pick a deal that offers the lowest cost and highest return for your pension plan.

3

Compare your options

You may be able to get the best income drawdown pension plan for your needs by applying online and some lenders and brokers only ever operate digitally, so to make sure you find the competitive income drawdown pension plans comparing quotes on the internet is a must. Once you've decided on the provider you want, simply apply.

Income drawdown pension deals

Income drawdown is complex and not suitable for everyone. Your income will be affected by the value and performance of underlying assets; make sure you understand the risks and costs before you go ahead and transfer.

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Hargreaves Lansdown Pension
Hargreaves Lansdown Pension
Minimum pension fund needed
£1,333.33 or £1,000 if you've taken a tax free lump sum
You can take payments
Monthly, quarterly, half yearly or annually
Transfers allowed from
Final salary, defined contribution & capped drawdown pensions
Choose from over 3,000 funds, shares and more with expert research and ideas to help you. Transfer previous pensions to HL and manage them all in one place – cashback available when you transfer – terms apply. Risk of loss.
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What is a drawdown pension?

A drawdown pension is complex and isn't suitable for everyone. Your income will be affected by the value and performance of underlying assets. So make sure you understand the risks and costs before you go ahead.

Pension drawdown is an option offered by pension companies. It lets you turn your pension fund into an income when you reach the age of 55 or over. This gives you money to live on during your retirement.

When you get access to your pension fund, you can move it into a flexi access drawdown pot. This means you keep most of your money invested and withdraw a monthly sum that covers your monthly expenses.

Our comparison table will help you choose a product, and you could use a pension drawdown calculator to help.

What types of drawdown pension are there?

When you're looking for the best drawdown pension, there are two main kinds of drawdown pension products to choose from.

  • Pension drawdown. This was launched in 2015 when the pension drawdown rules changed. With this kind, there's no limit on the amount of drawdown funds you can take out of your pension savings. Any pension drawdown arrangements set up after 6 April 2015 are called flexi access drawdown.

  • Capped drawdown. This was available until April 2015. It means there are limits on the amount of income you can take out of your drawdown funds. The pension drawdown rules used to be a lot more restrictive. If your arrangement is a capped drawdown one, then you could stick with it, or convert to flexi access drawdown.

Do you need to transfer to get an income drawdown?

No, you don't need to transfer. But, if your pension company doesn't offer income drawdown, you can transfer your pension to another company that does.

You might face charges if you transfer your pension fund to another company. This could mean you have a smaller fund to get an income from.

How to compare pension drawdown options

Our pension drawdown comparison will help you to compare pension products. You could also use a drawdown calculator to help you.

Click 'view details' at the side of each listing to find out more about each drawdown pension product. You'll be able to find out about the best drawdown pension providers and find out about drawdown pension charges.

Pension drawdown is complex, so you might also like to use our broker form to get pension advice.

Which are the best performing drawdown pensions?

This depends on your pension provider and what kind of flexible drawdown options they offer. You'll also need to take pension drawdown tax rules into account.

Check with your provider, but your pension drawdown options might include:

  • Taking some as an income and leaving the rest invested (you can choose the amount you take and leave)

  • Withdrawing up to 25% tax free from your pension, then taking the rest as an income

  • Withdrawing up to 25% tax free from your pension, then splitting the rest between an annuity and income drawdown.

If you choose to take a large income drawdown from your pension fund from the start of your retirement, you might run out of money later in life. A drawdown calculator may be helpful for your calculations.

Another option is to delay using your pension, which means it could carry on growing, tax free. This might be an option if you've already got enough money to live off. You could carry on making pension contributions and getting tax relief on them during this time.

There's lots of choice in terms of what you can do with your pension when you reach the age of 55 or retire. You can even mix and match the options. But remember that not every pension provider will offer all the options, so you'll have to check carefully.

Use our broker form to get pension advice and to discuss the best performing drawdown pension providers.

What are the pros and cons of a drawdown pension?

Pros

  • Get access to tax-free cash immediately
  • Ability to vary your income depending on your needs
  • More control over your investment
  • Benefit from investment growth in a tax-efficient way

Cons

  • Returns are not guaranteed
  • Large early withdrawals maybe unsustainable for the future
  • Flexibility typically leads to more administration costs
  • Investment/ fund performance directly affects your level of income

Income drawdown or an annuity?

You can choose whether to go for an income drawdown pension or an annuity. Or, you could choose to have both.

But there are a few things to think about before you make any decisions.

What are pension drawdown tax rates?

You'll get the initial 25% of your pension tax free. Then, as your pension is considered an income, anything after that is taxed as per the income tax structure.

This means that, in England, Wales, and Northern Ireland:

  • The first £12,570 is tax-free (unless you have income from anywhere else)

  • You'll pay 20% tax on the next £37,500 after that

  • You'll pay 40% tax on anything above £50,000

  • You'll pay 45% tax on anything above £150,000.

You could use an income drawdown calculator or even a pension drawdown tax calculator to help you work out how much tax you'll pay if you take money out.

Inheritance on pension drawdown explained

A drawdown pension can be a good option in terms of inheritance for your family, compared with an annuity. The amount of tax that would be owed on a drawdown pension has gone down in recent years.

Most of the time, with an annuity, you can usually only pass it to your spouse or dependents aged 23 and under. With a drawdown pension, you can leave it to anyone you choose. They don't need to be a dependent.

With income drawdown, if you die before you're 75, you can make arrangements for it to be passed on to a nominated person, tax free. It can either be taken as a lump sum or as a regular income.

If you're over 75 when you die, you can still make arrangements for it to be passed on to a nominated person, but it won't be tax free. It'll be taxed according to their income. A drawdown pension calculator is a good way to work out what they'd get, if you know what their income is.

Income drawdown pension FAQs

About our pensions that offer income drawdown comparison

Explore private pension and retirement guides

See our full set of pensions guides here.

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How to choose an annuity

If you want your pension fund to pay you a regular income when you retire then an annuity could be for you. Here is how each type of annuity works and what options you have.

Find out more on how to choose an annuity
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How to set up your workplace pension

If you do not have a workplace pension in place for your employees by your staging date you could face a hefty fine. Here is how to set up a pension suitable for your entire workforce.

Read more on how to set up your workplace pension
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How to withdraw your pension

Here is how to find out what age you can withdraw from each type of pension and what you need to do to claim them.

Read more about withdrawing your pension

Why compare pensions with money.co.uk?

Comparing private pensions could save you money. Our multiple award-winning comparison service makes sure you get the lowest rates possible based on your individual circumstances. Our aim is to provide you with the most up-to-date information, as well as useful tools and calculators so to help you make life's most important decisions and take control of your money.

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Last updated: 22 February, 2022