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Pension Drawdown

A flexible way to take money out of your pension and access your 25% tax free cash

What is a Pension Drawdown?

A flexible income

A Pension Drawdown is a flexible way of taking money from your pension savings as and when you need to. You can use it to take up to 25% cash tax-free from your pension savings, and leave the rest invested until you need it.

If you're comfortable keeping some of your pension pot invested and can manage your pension savings to make sure you have enough money in retirement, pension drawdown could be a good choice for you. To help you do this, you'll need to review your pension savings regularly, so you know how much income you can take and make your savings last as long as you need them to.

  • Up to 25% of your pension pot can usually be taken tax-free
  • You can take money out when it suits you
  • Money left in your savings after you die can be passed on to your beneficiaries
  • Leaving your money invested gives it more chance to grow
  • You can keep paying into your pot, although a reduced annual allowance may apply
  • You can use your pension savings to buy a guaranteed income in the future

  • The income you take from your savings through pension drawdown is taxable
  • The more money you take out, the quicker your pension savings will run out
  • As with any investment, there's a chance that your pension savings could go down in value
  • If you die age 75 or over, your remaining pot will be taxed at the receiving beneficiary’s marginal tax rate
  • A reduced Annual Allowance will apply once you start to take an income from your pension (but won't apply if you're just taking tax-free cash)
  • If you die before you reach age 75, any benefits paid will normally be free of income tax regardless of whether they're taken as a lump sum or regular income, provided they are within your remaining Lump Sum and Lump Sum Death Benefit Allowance.

To find out more about your Annual, Lump Sum and Lump Sum Death Benefits Allowances, please read our Taking Money from My Pension guide PDF: 1287KB.

It's important to shop around before making a decision

When comparing what different providers can give you, take a look at all of the fees and charges. They could make a big difference to how far your pension savings go. Also, you may have preferential rates agreed by your employer on your behalf. You can find your Legal & General scheme charges in your pension maturity pack.

Fees and costs to look out for:

  • Platform, service or administration fees (either a percentage of your pension savings, a fixed fee, or both)
  • A separate fee for taking income
  • Fund management charges (a percentage of your pension savings)
  • A fixed fee each time you trade shares
  • A fee to transfer out in the event you decide to change provider

The fund management charges in drawdown can vastly differ from provider to provider and are sometimes hidden in the detail beyond the service and administration fees. They will also depend upon the investments you choose.

At Legal & General we only charge two of these fees: an administration fee (percentage) and a fund management charge.

Apply for Pension Drawdown

You can apply for a Legal & General Pension Drawdown with the form that was included in your pension maturity pack. 

You will need to have received your pension maturity pack within the last 12 months. If you received yours before that, or if you need a replacement pack, you can ask for a new one by logging into your account and clicking on your pension details.

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Need some help?

There are different retirement income products to choose from and the rates they offer can vary. Shop around to make sure you get the best deal for your situation and use available guidance and advice services before you apply. Other providers may have more appropriate products or be able to offer a higher level of retirement income.

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Retirement guidance

Pension Wise from MoneyHelper

You can get guidance from the government's free and impartial service to help make your money and pension choices clearer.

The availability of appointments can vary between a few days and several weeks, so if you need guidance, it's a good idea to book an appointment slot now:

0800 138 3944

Monday to Friday 9am to 5pm.
Calls may be recorded and monitored.

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Get financial advice

We provide a retirement advice service, which can help you review what you have and need before giving you expert advice about how to make the best use of your hard earned pension savings. We will also let you know more about the costs of the service.

0808 304 6861

Monday to Friday 9am to 5pm. Calls may be recorded and monitored.

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Get financial advice

Financial advisers can give you professional advice for pension planning.

You usually need to pay for their service and in return they recommend how to make the most of your pension given your circumstances.

To find and compare financial advisers please visit their website below.

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