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Compare pension drawdown plans and charges

Pension drawdown allows you to keep your pension invested while you withdraw a flexible income in retirement. Use our tables to compare drawdown fees and charges.

In this article
Why should I shop around for pension drawdown? How do pension drawdown charges work? Pension drawdown plans compared Pension drawdown companies: in detail

Why should I shop around for pension drawdown?

Income drawdown is becoming one of the most popular ways to generate an income from your retirement savings. 

In a drawdown plan, you keep your savings invested in the markets to keep growing, while taking a flexible income as you go.

Much like any financial product, it's vital that you shop around for the best value drawdown products. Fail to do so, and you could end up paying more in fees and charges than is necessary. 

In a 2018 investigation, Which? found that the difference between the cheapest and most expensive drawdown plans was a staggering £12,000 lost in charges over a 15 year period.

It is notoriously difficult to compare drawdown plans - but Which? has done the hard work for you, analysing the charges of dozens of drawdown providers and showing you how much drawdown might cost you during retirement.  

How do pension drawdown charges work?

One of the major barriers to a straightforward comparison of costs is the fact that companies have very different charging structures. 

You may incur five or six separate types of fee each year depending on the provider you choose. These could include:

  • set-up fees 
  • annual administration charges
  • platform charges
  • dealing commission to trade funds and shares

You will also need to pay charges for the investments you select in your drawdown pension plan.

Some companies charge flat annual fees, while others charge a percentage fee based on the amount you have in your pension. Some combine the two types of fee. 

It gets even more complex. Where percentage product or platform charges are levied in tiers according to value of your fund, there are two different approaches. 

Some providers have an ‘income tax band’ system, where, say, the first £50,000 of your pot has a fee of 0.45%, with the next £150,000 incurring a charge of 0.4% and so on.

The alternative tiered structure works on a ‘whole fund’ basis, with a charge at one rate, which will vary depending on the plan’s overall value. 

Pension drawdown plans compared

We've combed through the charges levied by 22 providers of pension drawdown - the most comprehensive analysis you can find. 

In this table, you can find:

  • Whether you need financial advice to access drawdown
  • Any fixed fees you might face
  • Relevant charges for pensions worth £100,000, £250,000 and £500,000. 

These figures were correct as of January 2018.

Pension drawdown companies: in detail

Our company profiles outline the charging structures for the main providers and how they performed in our two cost scenarios.

The calculations in our scenarios were based on initial pension pots of £100,000 and £250,000 invested in three popular investment funds:

  • Fidelity Moneybuilder Income (40%)
  • Henderson Cautious Managed (40%)
  • Schroder Income Maximiser (20%). 

We also assume that 5% of the pot is withdrawn each year and your pension pot grows by 4% a year.

 

Aegon pension drawdown: fees and charges

 

Aegon has a £75 annual charge covering administration of drawdown, whether you take regular or ad hoc payments.

Platform/product fee

Aegon's Retirement Choice drawdown plan charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • First £29,999.99 - 0.60%
  • Next £20,000 (£30,000 to £49,999.99) - 0.55%
  • Next £50,000 (£50,000 to £99,999.99) - 0.50%
  • Next £150,000 (£100,000 to £249,999.99) - 0.45%
  • £250,000 and over - 0.00%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £68,421 left after 15 years having paid £16,091 in charges.

A £250,000 pot on the same basis would leave you with £173,982 after 15 years having incurred £37,157 in charges.

 

AJ Bell Youinvest pension drawdown: fees and charges

 

The fee for a one-off income payment is £30 per year.

Platform/product fee

AJ Bell Youinvest’s Sipp charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • First £0 - £250,000 - 0.25%
  • Next £250,000-£1m - 0.10%
  • Next £1m-£2m - 0.05%
  • Value over £2m - No charge

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £72,280 left after 15 years having paid £12,066 in charges.

A £250,000 pot on the same basis would leave you with £181,304 after 15 years having incurred £29,494 in charges.

 

Alliance Trust Savings pension drawdown: fees and charges

 

To move into flexible drawdown, you need to have a Sipp with Alliance Trust savings. 

Its Sipp (Income) Account costs £23.75 + VAT per month, which equals £28.50 per month. That equates to £342 per year.

There are no other platform charges.

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £70,801 left after 15 years having paid £13,569 in charges.

A £250,000 pot on the same basis would leave you with £183,996 after 15 years having incurred £26,620 in charges.

 

Aviva pension drawdown: fees and charges

 

There are no charges for drawdown set-up and income withdrawals.

Aviva’s Advised Platform Sipp (called 'Pension Portfolio') charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • Up to and including £29,999 - 0.40% 
  • £30,000 to £249,999 - 0.35%
  • £250,000 to £399,999 - 0.25%
  • £400,000 and over - 0.15%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £71,398 left after 15 years having paid £12,967 in charges.

A £250,000 pot on the same basis would leave you with £178,794 after 15 years having incurred £32,105 in charges.

 

Barclays Smart Investor pension drawdown: fees and charges

 

here is an annual Sipp fee of £150 and drawdown fee of £120.

Platform/product fee

Barclay Smart Investor's Sipp charges a single percentage fee on your entire pension pot. This is currently 0.2% per annum. 

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £69,533 left after 15 years having paid £14,917 in charges.

A £250,000 pot on the same basis would leave you with £179,379 after 15 years having incurred £31,482 in charges.

 

Bestinvest pension drawdown: fees and charges

 

Bestinvest’s Sipp charges a percentage fee, which reduces depending on the size of your pension pot. 

The bigger the pension, the lower the fee charged on all the money you hold. 

It works like this:

  • Up to £250,000 - 0.3% a year 
  • £250,000 - £1m - 0.2% a year
  • Over £1m – 0%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £72,220 left after 15 years having paid £12,109 in charges.

A £250,000 pot on the same basis would leave you with £180,647 after 15 years having incurred £30,153 in charges.

 

Charles Stanley Direct pension drawdown: fees and charges

 

There is a payroll charge for taking annual income from the Sipp of £60.

Platform/product fee

Charles Stanley Direct’s Sipp charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • Up to £250,000 – 0.25%
  • A platform charge reduction to 0.20% on the balance of fund holdings above £250,000.
  • A further platform charge reduction to 0.15% on the balance of fund holdings above £500,000.
  • A further platform charge reduction to 0.05% on the balance of fund holdings above £1m.
  • No charge on fund holdings in excess of £2m.

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £71,747 left after 15 years having paid £12,618 in charges.

A £250,000 pot on the same basis would leave you with £180,771 after 15 years having incurred £30,046 in charges.

 

Close Brothers pension drawdown: fees and charges

 

There is an annual drawdown admin fee of £90.

Platform/product fee

Close Brothers' Sipp charges a single percentage fee on the total value of its fund, which is 0.25% per annum. 

This is deducted monthly, and applies to unit trusts and OEICs, equities, investment trusts, exchange traded funds, Gilts and any other exchange traded securities.

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £72,847 left after 15 years having paid £11,384 in charges.

A £250,000 pot on the same basis would leave you with £184,011 after 15 years having incurred £26,468 in charges.

 

Fidelity pension drawdown: fees and charges

 

Platform/product fee

Fidelity's Sipp charges a percentage fee, which reduces depending on the size of your pension pot.

The bigger the pension, the lower the fee charged on all the money you hold.

It works like this:

  • £0 to £7,499.99 - 0.35% with monthly Regular Savings Plan, £45 a year without.
  • £7,500 to £249,999.99 - 0.35%
  • £250,000 to £1m - 0.20%
  • No further Service Fee is charged for assets held above £1m

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £71,597 left after 15 years having paid £12,758 in charges.

A £250,000 pot on the same basis would leave you with £178,993 after 15 years having incurred £31,896 in charges.

 

Halifax Share Dealing pension drawdown: fees and charges

 

There are annual Sipp and drawdown fees of £180.

There are no annual platform fees.

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £67,259 left after 15 years having paid £17,435 in charges.

A £250,000 pot on the same basis would leave you with £175,339 after 15 years having incurred £36,081 in charges.

 

Hargreaves Landsdown pension drawdown: fees and charges

 

Hargreaves Lansdown's Sipp charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • £0-£250,000 - 0.45%
  • £250,000 to £1m - 0.25%
  • £1m to £2m - 0.10%
  • Over £2m - 0%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £71,434 left after 15 years having paid £12,889 in charges.

A £250,000 pot on the same basis would leave you with £178,584 after 15 years having incurred £32,222 in charges.

 

Interactive Investor pension drawdown: fees and charges

 

There are annual Sipp and drawdown fees of £120.

There are no platform fees.

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £71,277 left after 15 years having paid £13,244 in charges.

A £250,000 pot on the same basis would leave you with £184,703 after 15 years having incurred £26,043 in charges.

 

James Hay pension drawdown: fees and charges

 

There is an annual Sipp admin fee of £175 (waived where more than £200,000 is maintained in qualifying investments) and an annual drawdown fee of £150.

Platform/product fee

James Haye’s Sipp charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • First £300,000 - 0.25%
  • On next £300,000 – 0.20%
  • On next £400,000 - 0.15%
  • On next £500,000 - 0.05%
  • Over £1.5m - 0.01%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £68,293 left after 15 years having paid £16,215 in charges.

A £250,000 pot on the same basis would leave you with £178,698 after 15 years having incurred £32,140 in charges.

 

LV pension drawdown: fees and charges

 

LV Full’s Sipp charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • First £75,000 – 0.55%
  • Next £275,000 – 0.35%
  • Next £650,000 – 0.20%
  • Over £1m – 0.10%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £69,111 left after 15 years having paid £15,387 in charges.

A £250,000 pot on the same basis would leave you with £175,656 after 15 years having incurred £35,452 in charges.

 

Old Mutual Wealth pension drawdown: fees and charges

 

Old Mutual’s Collective Wealth Retirement Account charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • First £25,000 - 0.50%
  • £25,000 to £100,000 - 0.35%
  • £100,000 to £500,000 - 0.30%
  • £500,000 to £1m - 0.25%
  • £1m+ - 0.15%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £71,493 left after 15 years having paid £12,848 in charges.

A £250,000 pot on the same basis would leave you with £180,170 after 15 years having incurred £30,609 in charges.

 

Prudential pension drawdown: fees and charges

 

Prudential’s Retirement Account charges a percentage fee, which reduces depending on the size of your pension pot.

The bigger the pension, the lower the fee charged on all the money you hold.

It works like this:

  • £0-24,999 - 0.65%
  • £25,000-£49,999 - 0.55%
  • £50,000-£99,999 - 0.45%
  • £100,000-£249,999 - 0.40%
  • £250,000-£499,999 - 0.35%
  • £500,000-£749,999 - 0.30%
  • £750,000-£999,999 - 0.275%
  • £1m or above - 0.25%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £70,334 left after 15 years having paid £13,979 in charges.

A £250,000 pot on the same basis would leave you with £177,159 after 15 years having incurred £33,448 in charges.

 

Royal London pension drawdown: fees and charges

 

Royal London Pension Portfolio Income Release plan charges a percentage fee, which is not a separate fee – it’s built into the price of the investments you choose.

Then, it applies a discount based on how much you have in your pension. The discount applies to your entire pension pot.

It works like this:

  • £0-£31,500 – 0.10% per year
  • £31,500-£63,100 – 0.50% per year
  • £63,100-£189,000 – 0.55% per year
  • £189,000-£631,000 – 0.60% per year
  • £631,000+ - 0.65% per year

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £71,352 left after 15 years having paid £13,215 in charges.

A £250,000 pot on the same basis would leave you with £179,542 after 15 years having incurred £31,715 in charges.

 

Scottish Widows pension drawdown: fees and charges

 

Scottish Widows’ Retirement Account Sipp charges a percentage fee, which reduces depending on the size of your pension pot.

The bigger the pension, the lower the fee charged on all the money you hold.

It works like this:

  • £0-£29,999 – 0.90%
  • £30,000-£49,999 – 0.40%
  • £50,000-£249,999 – 0.30%
  • £250,000-£499,999 – 0.25%
  • £500,000-£999,999 – 0.20%
  • £1m+ - 0.10%

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £70,488 left after 15 years having paid £13,998 in charges.

A £250,000 pot on the same basis would leave you with £176,221 after 15 years having incurred £34,996 in charges.

 

Selftrade pension drawdown: fees and charges

 

There are annual Sipp and drawdown fees of £118.80 and £180 respectively.

Platform/product fee

Selftrade’s Sipp charges a percentage fee in tiers.

It works a bit like income tax bands – each percentage fee applies to different amounts held in the Sipp, rather than a single percentage fee applied your entire pension.

It works like this:

  • 0.3% on the first £50,000, then
  • 0.25% for values between £50,000 and £250,000, then
  • 0.15% for values over £250,000

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £68,467 left after 15 years having paid £16,157 in charges.

A £250,000 pot on the same basis would leave you with £177,491 after 15 years having incurred £33,585 in charges.

 

Standard Life pension drawdown: fees and charges

 

Standard Life’s Active Money Sipp charges a percentage fee, which reduces depending on the size of your pension pot.

The bigger the pension, the lower the fee charged on all the money you hold.

It works like this:

  • Fund under £100,000 - 0.6% of the SIPPZone value a year
  • £100,000-£249,999 - 0.55% of the SIPPZone value a year
  • £250,000-£499,999 - 0.45% of the SIPPZone value a year
  • £500,000+ - 0.4% of the SIPPZone value a year

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £68,710 left after 15 years having paid £15,805 in charges.

A £250,000 pot on the same basis would leave you with £173,076 after 15 years having incurred £38,144 in charges.

 

The Share Centre pension drawdown: fees and charges

 

There are annual Sipp and drawdown fees of £172.80 and £234 respectively.

There are no platform fees.

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £70,120 left after 15 years having paid £14,454 in charges.

A £250,000 pot on the same basis would leave you with £183,381 after 15 years having incurred £27,433 in charges.

 

Zurich pension drawdown: fees and charges

 

The annual platform fee used in our illustration was 0.45% - this is the charge for a typical scheme but varies on a scheme by scheme basis.  

In our research, if you started with £100,000 with this company, taking out 5% each year and the fund growing annually by 4%, you’d have £70,671 left after 15 years having paid £13,726 in charges.

A £250,000 pot on the same basis would leave you with £176,677 after 15 years having incurred £34,314 in charges.

We've made some assumptions into our calculations – in relation to the timing and sequence of charge deductions, the growth applied to the funds, and so on. The same methodology was used for all providers to be fair and consistent.

The final fund totals will be slightly different in practice, but the like-for-like comparisons between the providers illustrate the potential impact of cost differences.