Pension Drawdown Service

Our free Pension Drawdown Service helps you make confident, stress free decisions to stay in control of your retirement income.

Your capital is at risk. Investments can go down as well as up and you may get back less than you originally invested. Read more on the risks


Moneyfarm has been voted Best Direct SIPP Provider in the YourMoney.com Awards

What is drawdown?

Pension Drawdown is a flexible option for accessing your pension in retirement. You can withdraw lump sums, generate a steady income or do both, as and when you choose.

You can typically withdraw up to 25% of your pension pot tax-free, whilst leaving the rest invested. This means your pension can continue to grow over time. As with all investments, there is a chance that your pension could fall in value.

Moneyfarm’s drawdown service allows you to access your pension anytime after the age of 55.

Why choose Moneyfarm’s Pension Drawdown Service?

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Free drawdown service

Pay no additional fees for accessing your pension in retirement

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Tax efficient

Withdraw up to 25% of your pension tax-free and minimise tax liabilities

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Flexible withdrawal

Access your pension savings, how and when you need

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Human guidance

Cut through the jargon by speaking with one of our investment consultants

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Hassle-free access

Let us handle everything, from withdrawals to relevant tax payments

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Inheritance Tax benefits

Pass on pension funds to your beneficiaries free of inheritance tax

How does drawdown work?

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Combine old pensions

Open a Moneyfarm Pension, and invest a lump-sum, set up a direct debit or transfer your old pensions for free

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Plan for retirement

Think about how much you’ll need in retirement, the amount you want to access and how frequently

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Understand your options

Speak with an investment consultant who will explain your options and guide you through the process

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Enjoy your retirement

Sit back and relax – Moneyfarm will handle the rest

Moneyfarm’s Pension Drawdown options

Pension Commencement
Lump Sum (PCLS)

Tax-free Lump Sum withdrawal(s)

  • Withdraw up to 25% of your pension pot tax-free, either as a single lump sum or in instalments
  • Does not trigger your money purchase annual allowance, which restricts how much you can save in your pension each year
  • Leave your remaining pension funds invested to grow

Flexi-Access
Income Drawdown

Adjustable Income

  • Access your pension funds as taxable income, in monthly, quarterly or annual instalments
  • Adjust the amount and schedule of your income payments, as required
  • Combine this option with a tax-free lump sum withdrawal (PCLS)
  • Leave your remaining pension funds invested to grow

Uncrystallised Funds Pension
Lump Sum (UFPLS)

Ad-hoc Lump Sum withdrawal(s)

  • Withdraw single or multiple lump sums, as and when you choose
  • You can usually take 25% of each withdrawal tax-free
  • Leave your remaining pension funds invested to grow

Moneyfarm’s free drawdown service

Our drawdown service is free. This means:

  • No additional charge to enter drawdown
  • No additional administration charges
  • No withdrawal charges
  • No fund switching charges

During drawdown, you will continue to pay the same standard pension management charge as before. Click here for Pension fee details.

Calculate your retirement income with Moneyfarm’s Pension calculator

Your Pension

To achieve your desired income, you may require a pension pot at retirement worth:

£1,689,814

In today's money:

£932,897

You should increase your contribution by:

£2,109

Personal contributions required may be less if you are entitled to the government top-up of 25%

Invest in a better future

£2,209
in total
each month

invested in a Moneyfarm Pension will give you the pension you deserve

Start investing
How we calculated these figures

All figures take account of inflation and show the buying power of your pension in today's money. Please see how to read these results below. If you have any questions, contact our Investment Consultants on 0800 433 4574 or email hello@moneyfarm.com. Find out more about your tax relief and pension allowances.

The figures here take account of inflation at 2% and show the buying power of your pension in today's money. If you have any questions, contact our Investment Consultants on 0800 433 4574 or email hello@moneyfarm.com. Find out more about your tax relief and pension allowance. This calculator aims to give you an indication of how much you may need to contribute to a pension to achieve your desired retirement income.The calculator should not be regarded as personal advice, nor is this a reliable indicator of future performance. One consensus is that you should aim for two - thirds of your final salary to maintain your current standard of living when retired.

This calculation assumes that your investments will grow by an annualised 5% during the accumulation phase - before your desired retirement age.Once retired, your investments will grow by an annualised 3%. The lifetime allowance is currently £ 1,055,000; if your pension exceeds the lifetime allowance you may be subject to additional charges from the Government.We assume you will receive the full single - tier state pension of £8,767.20 a year during retirement and that you will live to the age of 83.

The figures here are a guide and are not guaranteed. Your final pension fund and the income available will depend on factors including the growth your fund achieves, contributions you make in the future, charges, inflation, your retirement age, annuity rates at the time and the annuity options you choose.

As with all investing, your capital is at risk.

The inheritance tax benefits of pension drawdown

With Moneyfarm’s Pension, funds left in your pension wrapper can usually be passed on free of inheritance tax. Some consider this to be a key advantage of drawdown over most standard annuities.

With drawdown, your beneficiaries can keep the flexibility associated with your pension pot. This means they have the option to withdraw as a lump sum, remain in drawdown or purchase an annuity.

The tax treatment of your assets will depend on when you pass away.

Under 75 years old – Beneficiaries will usually receive payments free of tax. They will have to claim within two years, after which they may be taxed

Over 75 years old – Beneficiaries will receive payments as income and be taxed accordingly

Pension Drawdown – Tax Considerations

Moneyfarm leaves you with more time to enjoy your retirement by handling the payment of any relevant taxes for you.

When you access your pension as taxable income, any withdrawal beyond your tax-free personal allowance will be subject to income tax. No National Insurance will be due on your pension income.

To determine your tax rate, your taxable pension income will be added to any other relevant income you receive in that particular tax year. You can find full details on what counts as relevant income on the HMRC Website.

Moneyfarm handles your payment of relevant taxes, leaving you with more time to enjoy retirement
Important considerations
  • Tax charges will apply if you exceed your lifetime allowance.
  • Large withdrawals may move you into a higher tax band. You could consider spreading your withdrawals over different tax years to take advantage of personal allowances and income tax bands.
  • Tax rules can change and your benefit entitlement depends on your personal circumstances.
  • It is important to ensure that your tax code is up to date with HMRC before you make a withdrawal to avoid any additional tax being applied

Crystallised, Uncrystallised and the Lifetime Allowance explained

Typically, each time you access your pension savings, you trigger a Benefit Crystallisation Event (BCE).

This results in the value of the crystallised funds (the funds you have accessed) being tested against your Lifetime Allowance of £1.055 million. The pension funds you have not accessed are called uncrystallised funds, which have not yet been tested against your lifetime allowance.

If your total pension savings exceed the lifetime allowance when you decide to take benefits or a benefit crystallisation event, a tax charge applies, called the lifetime allowance charge.

Other Benefit Crystallisation Events listed by HMRC include reaching the age of 75, transferring to a qualifying recognised overseas pension scheme, and passing away. You may experience a number of these events in your lifetime.

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