With over 205,000 individuals entering pension drawdown in 2021–22, a 24% rise from the previous year, more UK retirees are opting to keep their pension savings invested while taking flexible income.

According to the Financial Conduct Authority (FCA), this shift reflects growing demand for Self-Invested Personal Pensions (SIPPs) that offer not just control, but cost-efficiency and transparency during retirement³.

Choosing the best SIPP for drawdown is a decision that can significantly shape your retirement lifestyle. The right provider should combine low fees, wide investment access, and tools to manage risks like market volatility and longevity. Poor drawdown planning, such as high withdrawal rates or unsuitable investments, can erode your retirement pot far faster than expected.

At EveryInvestor, we analyse the UK SIPP landscape using FCA guidelines, provider data, and consumer reviews. Our recommendations are independently researched and fact-checked to help you make informed, confident choices for your retirement income strategy.

What Is a SIPP Drawdown and How Does It Work?

A SIPP (Self-Invested Personal Pension) drawdown allows you to access your pension savings flexibly while keeping the remaining funds invested.

This approach gives you control over how much you withdraw, when, and how the rest of your pension pot continues to grow, or shrink, depending on markets⁴

Why It Matters in the UK

In the 2023/24 financial year, a record 278,977 UK pension holders accessed drawdown for the first time, a 27.9% increase from 218,183 the previous year⁵. This surge demonstrates that more retirees are choosing flexibility over locked-in annuities.

How It Works

1. Age Eligibility: You can normally start drawdown from age 55 (increasing to 57 in 2028) once you’ve crystallised your pension pot⁶.
2. Tax-Free Lump Sum: You’re entitled to withdraw up to 25% of your pension tax-free, the so-called Pension Commencement Lump Sum, subject to your Lifetime Allowance/Allowance Regulations⁷.
3. Flexible Withdrawals: The remaining 75% can be withdrawn at your discretion. Any withdrawals are taxed at your marginal income tax rate⁸.
4. Retained Investments: The balance stays invested, offering potential growth, but it also exposes your retirement pot to market fluctuation .

Benefits vs Considerations

• Advantages: Offers adaptability, adjust withdrawals based on needs, tax bands, or market shifts.
• Risks: Investment volatility may shrink your pot. If you withdraw excessively, there’s a risk of outlasting your savings .

Key SIPP Drawdown Rules and Risks

Drawing down your SIPP offers income flexibility, but not without rules and risks.

Here's what UK pensioners need to know:

1. Age & Eligibility

You can begin drawdown from age 55 (rising to 57 in 2028) once you have crystallised your pension pot⁹

2. Tax-Free Lump Sum

You may take up to 25% of your pension pot tax-free (the Pension Commencement Lump Sum), with the remainder taxed at your marginal UK income tax rate.

3. Flexible Withdrawals

Drawdown lets you take ad hoc or regular income payments without needing to purchase an annuity. This offers flexibility but shifts income control entirely to you¹⁰.

4. Investment Control vs Market Risk

The remaining SIPP pot stays invested. While this allows for growth, you're exposed to inflation, market downturns, and sequence-of-returns risk.

Key Risks

• Longevity Risk: Drawing too much too early may exhaust your pot before the end of life.
• Inflation Risk: The value of fixed withdrawals may erode quickly in an inflationary environment. CPI reached 3.5% in April 2025¹¹.
• Sequencing Risk: Withdrawing during a market downturn can reduce long-term income potential.

5. Fees and Charges

Watch for platform, dealing, and fund charges. For example, FCA guidance flags pathway funds that exceed 0.75% in fees.

6. Regulatory Updates

Pension freedoms, tax thresholds, and access age are evolving. Staying informed using FCA reports and MoneyHelper updates is key to compliance and effective planning.

7. Investment Pathways

Introduced in February 2021 by the FCA, these are default asset strategies for non-advised drawdown customers.

Four pathways align with typical retirement goals and help customers choose appropriate portfolios. Uptake reached nearly 50% in early 2023, although some providers breached the 0.75% fee cap.

How Do Drawdown Pensions and SIPPs Compare?

Both drawdown pensions and Self-Invested Personal Pensions (SIPPs) allow you to take flexible income in retirement. The key difference lies in the level of investment control and provider structure.

Traditional Drawdown Pensions

• Offered by major pension providers, insurers, and workplace schemes.
• Typically restrict investment choices to a pre-selected range of funds.
• Designed for simplicity, often with default investment pathways.
• May suit retirees who want some flexibility but prefer a more hands-off approach.

SIPPs for Drawdown

• Offered by specialist platforms such as AJ Bell, Hargreaves Lansdown, and Vanguard.
• Provide access to a broader range of investments including shares, ETFs, investment trusts, and funds.
• Give you or your adviser full control over asset allocation and withdrawal strategies.
• Ideal for investors comfortable making or managing complex investment decisions.

Which Is Right for You?

• If you prefer guided fund options with minimal effort, a traditional drawdown pension may suffice.
• If you value full control and are willing to actively manage your portfolio or work with an adviser, a SIPP offers more flexibility and potentially lower costs depending on platform fees.

🆚 Drawdown Pension vs SIPP: Side-by-Side Comparison

Feature	Traditional Drawdown Pension	SIPP (Self-Invested Personal Pension)
Investment Range	Limited to provider-chosen funds, typically 100–200 options12	Thousands of assets—UK/global shares, ETFs, trusts, funds
Control Level	Mostly guided; providers may auto-switch to lower-risk as you age	Full control to buy, sell, and allocate; suitable for active investors
Fees	Fixed or tiered percentage (e.g., 0.35–0.45%), plus dealing charges	May include platform fee (0.25–0.45%), dealing charges, fund OCFs; can be cheaper for large pots
Complexity	Easier to manage with minimal decision-making	Requires active monitoring or adviser support
Flexibility	Usually allows variable withdrawals, but fund choices are narrow	Drawdown available with full flexibility: ad hoc, scheduled, or via pathways
Tax Relief & Access	25% tax-free cash, income taxed at marginal rates; access from age 55 (57 from 2028)	Same tax treatment; can draw via Flexi-access drawdown
Pathways & Guided Options	Mostly provider default pathways	Must choose pathway manually or via adviser; FCA-regulated options available
Best For	Low-effort retirees preferring set-and-forget income	DIY investors or those using advisers seeking greater control

According to the Financial Conduct Authority (FCA), around 48% of non-advised retirees enter drawdown without comparing providers, which can lead to unsuitable outcomes. Choosing between a standard drawdown product and a SIPP can significantly affect your income sustainability and retirement satisfaction.

What Makes a Good SIPP for Drawdown?

Choosing the right SIPP for drawdown is about balancing cost, flexibility, and control while aligning with your retirement income goals.

Here are the key features to look for when comparing providers:

1. Investment Options

A top-tier SIPP should offer access to a broad investment universe, including:

• UK and global equities
• ETFs and index funds
• Investment trusts and fixed income products

Look for platforms offering 1,500+ listed assets, with the ability to self-select or use pre-built portfolios.

2. Low & Transparent Fees

Fees can significantly erode your pension pot over time. Consider:

• Platform/admin fees: Should ideally stay under 0.35% annually.
• Fund OCFs: Seek funds with ongoing charges below 0.75%.
• Dealing charges: Watch for share trading fees (£5–£10 typical in the UK).

Some providers like Vanguard cap total platform fees at £375/year, making them attractive for larger pots.

3. Withdrawal Flexibility

A good SIPP should allow:

• Ad hoc or scheduled income withdrawals
• Partial lump sums without fees
• Easy changes to income levels as your needs evolve

4. Provider Reputation

Choose FCA-regulated providers with:

• A track record of reliability
• Strong Trustpilot ratings (4.0+ is a solid benchmark)
• Transparent communication and support during key pension milestones

5. Customer Support & Advice Access

Whether online or over the phone, reliable customer service is key for managing drawdown changes, fund switches, or queries.

Bonus points for offering optional advice or digital guidance tools for DIY investors.

6. Online Tools & Account Management

Look for:

• Intuitive dashboards
• Income forecasting tools
• Secure document storage and withdrawal tracking

AJ Bell and Hargreaves Lansdown, for example, offer robust platforms with rich retirement planning functionality.

📌 Pro Tip: Always review the Key Features Document (KFD) before committing to a SIPP. This outlines fees, terms, investment access, and drawdown mechanics in regulated format.

How to Choose the Right SIPP for Income Drawdown

Selecting the right SIPP for drawdown depends on your personal retirement goals, comfort with investing, and the size of your pension pot.

The best choice balances cost, flexibility, investment access, and support tools to help you manage income sustainably throughout retirement.

1. Fees and Charges

Keeping costs low is essential for protecting long-term returns. Compare:

• Platform Fees: Aim for charges under 0.35%. Vanguard offers 0.15%, capped at £375 per year¹³.
• Fund Costs (OCFs): Choose funds with ongoing charges below 0.75%, especially passive options.
• Dealing Charges: Expect £5–£10 per trade. AJ Bell, for instance, charges £9.95 for shares and £1.50 for funds¹⁴.

2. Drawdown Flexibility

You need the freedom to manage income on your terms. Look for:

• Fee-Free Withdrawals: Providers like Vanguard and AJ Bell don’t charge for withdrawals.
• Partial Access to the 25% Tax-Free Lump Sum: Choose platforms that let you phase tax-free cash over time.
• Flexible Income Management: Ability to take ad hoc or scheduled withdrawals without penalties¹⁵.

3. Investment Options

More choice means more control. The best drawdown SIPPs offer:

• 1,000+ UK and global funds, ETFs, shares, investment trusts¹⁶.
• Pre-built portfolios for passive investors.
• Investment pathways for those who prefer structured, FCA-compliant routes.

4. Online Tools & Support

A user-friendly platform is crucial for managing income in real time. Prioritise providers offering:

• Interactive dashboards
• Income forecast calculators
• Secure access to documents and withdrawal history

AJ Bell and Hargreaves Lansdown are consistently praised for their intuitive platforms¹⁷.

5. Provider Reputation

Trust and service quality matter for long-term peace of mind. Look for:

• FCA-regulated firms with strong financial backing
• Trustpilot scores above 4.0
• Recognition from Boring Money, Which?, or Times Money Mentor

Comparison Table: Leading Drawdown SIPP Features

Provider	Platform Fee	Withdrawal Fees	Investment Access	Tools & Interface
Vanguard	0.15% (max £375/year)	None	~75 core funds and ETFs	Clean, basic functionality
AJ Bell	0.25% custody (max £10/mo), £9.95 trades	None	Thousands of shares, funds	Strong tools, starter portfolios
Aviva	Up to 0.40% tiered + £7.50 trades	None	Wide range of in-house & external funds	Mobile-friendly portal

Choosing Based on Your Profile

• Passive Investor: Vanguard suits those who want low cost and simplicity.
• Engaged DIY Investor: AJ Bell offers excellent flexibility and a broad asset range.
• Adviser-Assisted or Hybrid Investor: Aviva blends optional guidance with good self-management tools.

Decision Checklist: What to Look for in a Drawdown SIPP

Question	Ideal Outcome
Is the platform fee under 0.35% or capped annually?	Keeps ongoing costs manageable, especially for larger pots
Can you make withdrawals for free, whenever needed?	Avoids unnecessary drawdown charges
Does the platform offer enough investment choice?	At least 1,000+ assets including ETFs and funds
Are online tools intuitive and useful for income planning?	Makes managing retirement income easier
Does the provider have a 4.0+ Trustpilot score or expert recognition?	Indicates service reliability and trustworthiness
Do they offer support or investment pathways if you need guidance?	Helps those less confident with DIY investing

With these criteria, you can shortlist a drawdown SIPP provider that meets your goals, budget, and comfort level.

Best Pension Drawdown Providers in the UK

Selecting the right provider for pension drawdown can make a significant difference to your income flexibility and long-term retirement outcomes.

Below is a detailed overview of leading UK platforms, evaluated on fees, tools, investment options, and overall value:

1. Vanguard

• Fees: 0.15% platform fee, capped at £375 annually
• Drawdown Perks: No fees for withdrawals; full access to core and ETF funds under their LifeStrategy range
• Best For: Low-cost, passive investors seeking simplicity and transparency

2. AJ Bell Youinvest

• Fees: Custody – 0.25% (max £10/month); Dealing – £9.95 per share trade, £1.50 for fund trades
• Investment Range: 5,000+ assets (shares, ETFs, funds); starter portfolios available
• Tools: Comprehensive dashboards, income forecasting, investor guidance
• Best For: Active DIY investors who value flexibility and a wide asset range

3. Aviva

• Fees: Tiered platform fee up to 0.40%; Share dealing – £7.50 per trade
• Drawdown Support: Flexible withdrawals with optional annuity module
• Platform Strengths: Well-designed app and portal, ideal for hybrid adviser-led setups
• Best For: Those seeking occasional advice with solid self-service functionality

4. Hargreaves Lansdown

• Fees: c.0.45% annual service charge; Share dealing ~£11.95
• Assets & Services: 2,500+ funds, 4,000+ shares and ETFs; award-winning service and research
• Best For: Investors valuing high-quality advice and sophisticated self-management tools

5. Fidelity

• Fees: 0.35% platform fee; competitive dealing rates
• Investment Options: Extensive fund range plus exclusive Fidelity multi-asset portfolios
• Tools: Portfolio analysis, income tools, and adviser optionality
• Best For: Balanced investors seeking strong platforms with solid fund performance

Quick Comparison Table

Provider	Platform Fee	Withdrawal Fees	Assets Available	Tools & Guidance
Vanguard	0.15% (max £375/yr)	£0	~75 core funds/ETFs	Basic dashboard
AJ Bell	0.25% (max £10/mo)	£0	5,000+ assets	Advanced planning tools
Aviva	≤ 0.40% (tiered)	£0	Wide fund range	App + annuity support
Hargreaves Lansdown	≈ 0.45%	£0	6,500+ assets	Extensive research & advice
Fidelity	0.35%	£0	Full fund range + portfolios	Portfolio tools + adviser

Picking the Right Provider for You

• For passive, fee-conscious investors: Vanguard offers simplicity and value.
• For hands-on investors: AJ Bell excels in flexibility and asset variety.
• For hybrid models or occasional advice: Aviva and Fidelity blend tech and support.
• For premium support and research: Hargreaves Lansdown remains a strong all-rounder.

How We Ranked the Best SIPPs

To help you confidently choose the best SIPP for drawdown, we assessed providers using a structured, criteria-driven approach.

Each provider was evaluated across key dimensions that matter most for retirees managing flexible income.

🔍 Our Evaluation Criteria

1. Fees and Charges
   We compared:
   • Platform and custody fees
   • Fund Ongoing Charges (OCFs)
   • Withdrawal, dealing, and admin charges
     SIPPs with transparent, low-cost pricing scored highest, particularly those with fee caps or minimal drawdown costs.
2. Investment Access
   Providers were rated based on:
   • Number and diversity of available funds, shares, ETFs, and trusts
   • Availability of pre-built portfolios and investment pathways
   • Access to global markets and sector-specific investments
3. Drawdown Features
   We examined:
   • Flexibility in how and when income can be drawn
   • Ease of partial lump sums and income scheduling
   • Availability of tax-free cash access and pathway investments for non-advised clients
4. Platform Usability
   We reviewed:
   • Quality of online dashboards, calculators, and mobile tools
   • Speed and ease of withdrawals, fund switches, and tax documentation
   • User experience and portal design
5. Customer Satisfaction
   Public reviews, Trustpilot scores, and independent awards were factored in. We prioritised providers with:
   • Consistently high user feedback
   • Reliable customer support
   • Strong reputations with regulators and financial reviewers
6. Independent Recognition
   We cross-checked our findings with:
   • Which? recommended lists
   • Boring Money’s Best Buy Pensions
   • Times Money Mentor’s retirement product rankings

Why This Matters

Many drawdown customers enter retirement without comparing SIPP providers, often missing out on better tools, lower fees, or more flexible withdrawal options.

By using this multi-factor analysis, we aimed to spotlight SIPPs that offer value, transparency, and ease of management throughout retirement.

Do You Need Advice for SIPP Drawdown?

While it's not mandatory to seek professional advice when accessing your SIPP through drawdown, guidance from a qualified financial adviser can offer significant value, particularly if you're unsure how to manage income sustainably, invest wisely, or minimise tax liabilities.

Why Advice Can Be Beneficial

Is Advice Worth the Cost?

Advice fees vary, typically:

• Fixed consultation: £500–£1,500
• Ongoing management: 0.5%–1% of assets per year

While this reduces your pot slightly, the value of optimised tax efficiency, risk management, and peace of mind can outweigh the cost, especially for pots over £100,000.

When to Consider Professional Advice

You should strongly consider advice if:

• You have a pension pot over £50,000
• You’re unsure how much income to draw
• You want to reduce the risk of outliving your savings
• You’re unfamiliar with investment selection or risk management
• You’re approaching a tax threshold (e.g. basic to higher rate)

What Alternatives Exist to SIPP Drawdown?

While SIPP drawdown offers flexibility and investment control, it’s not the only way to access your pension. Depending on your risk appetite, income needs, and personal preferences, you may want to consider other options.

1. Annuities: Guaranteed Income for Life

An annuity converts your pension pot into a guaranteed income, typically for life or a fixed term.

Key Features:

• Certainty: You receive a fixed or inflation-linked income regardless of market performance.
• Security: Ideal for cautious retirees who want to eliminate longevity risk.
• Types: Includes lifetime annuities, enhanced annuities (for health conditions), and fixed-term options.

Things to Consider:

• Once purchased, annuities are irreversible.
• Poor rates in low-interest environments.
• Less flexibility for changing income needs.

2. Uncrystallised Funds Pension Lump Sum (UFPLS)

UFPLS allows you to take lump sums directly from your pension pot without moving into drawdown.

Key Features:

• 25% of each withdrawal is tax-free, the rest is taxed as income.
• No need to set up a drawdown arrangement.

Things to Consider:

• Can result in inefficient tax treatment if large sums are withdrawn in one year.
• Not all providers support UFPLS.

3. Full Lump Sum Withdrawal

You can also withdraw your entire pension pot in one go, though this is usually discouraged for most savers.

Risks Include:

• Tax hit: Only 25% is tax-free, the rest may push you into a higher income tax band.
• No future growth: Once funds are withdrawn, they’re no longer invested tax-efficiently.
• Longevity risk: Your money may not last throughout retirement.

When Might Alternatives Make Sense?

Scenario	Best Option
You want secure, fixed income	Annuity
You have a small pot or short-term need	UFPLS
You have other income and want cash quickly	Lump Sum
You want income control and investment growth	SIPP Drawdown

Final Tip

Always speak with a regulated financial adviser before choosing an option. The tax treatment, longevity impact, and product rules can vary significantly, and once locked in, some choices cannot be reversed.

Common Questions

In Conclusion

Choosing the right SIPP for drawdown is a crucial part of planning a sustainable and flexible retirement. It affects how you access your income, manage your investments, and preserve your pension pot over time.

While drawdown offers greater control than traditional annuities, it also comes with more responsibility. You need to monitor investment performance, adjust your income when necessary, and stay informed about fees, tax rules, and market conditions. The risks, such as outliving your savings or experiencing losses during market downturns, are real but manageable with proper planning.

By comparing providers carefully, understanding your financial goals, and using the right tools, you can select a SIPP that suits your needs. Whether your priority is cost-efficiency, investment choice, or long-term stability, a well-informed decision will give you greater confidence in your retirement strategy.

If you are uncertain about how to proceed, regulated financial advice can help you make sense of your options and tailor your approach. With the right support and provider, a SIPP drawdown can offer both the flexibility and security you need to retire on your own terms.