SIPP income drawdown

One of the advantages of drawdown is that you can choose how much income you want to withdraw at any time.

You can choose to make regular withdrawals, or take larger sums as and when you need them. 

As with any other pension, any income you take will be subject to income tax (not including the initial tax-free lump sum). This may include higher-rate tax if you go over the threshold in the tax year. 

If you die before the age of 75, the remaining pension can be passed on tax-free to any beneficiary, as a lump sum or drawdown pension.

If you die after the age of 75:

• The pension can be drawn down or passed on at the beneficiary's marginal tax rate
• Alternatively, it can be paid into a trust as a lump sum, minus a 45% tax charge. 

Learn more about Income Drawdown Death Benefits.

Yes, you can continue to contribute - although your annual allowance is reduced to £10,000 once you start taking a taxable income from your pension.

This is known as the Money Purchase Annual Allowance (MPAA).

You don't have to move your whole pension into drawdown. You can choose to move it into drawdown gradually, leaving the rest invested.

Alternatively, you could move part of your pension into drawdown and use the rest for something else – such as UFPLS or an annuity.

You must be at least 55 years old to apply for pension drawdown. From 2028, the age increases to 57.

As long as you are over 55, you do not have to be retired to begin receiving drawdown income. For example, you can use it to supplement your income if you wish to go into semi-retirement.

If your SIPP is partially crystallised so that you hold both drawdown and non-drawdown funds, your SIPP fund will be notionally split between the drawdown and non-drawdown part, so that a value is assigned to each part without physically assigning specific assets to each part.