Pension drawdown

Other existing pensions with Aviva may offer pension drawdown. Contact us to check your pension or speak to our retirement experts about your retirement options and applying for pension drawdown. Find the right contact number for your pension.

Before you make any decisions about your pension, it's a good idea to get some expert advice. Pension Wise is backed by the government and offers free and impartial guidance to over 50s. You can also find an independent financial adviser at Unbiased. Or the Aviva Financial Advice Team can guide you on your options with its pension advice service. There will be a charge for advice.

There's a few other ways to take money from your pension. You can also buy an annuity, that gives you a guaranteed income for life, take all of it as a lump sum, leave it invested or even mix and match your retirement options. Read more about ways to take your money.

Yes, but once you’ve taken your tax-free 25%, you’ll be taxed on the remaining 75%.

It's worth bearing in mind that there are limits on how much of your pensions can be paid tax-free. The lump sum allowance is how much you can be paid from all your pensions tax-free during your lifetime and in 2025/2026 it’s £268,275. The lump sum and death benefit allowance is the tax-free limit for lump sum payments during your lifetime and on death – it’s currently £1,073,100. UK Income Tax is payable on any benefits taken above these limits.

By taking large amounts each year, you may end up putting yourself in a higher tax bracket and paying more tax overall than you would if you took out smaller amounts over a longer period. You could also lose access to some state benefits. You can play with some numbers and calculate your tax here using our pension withdrawal tax calculator.

Your pension is also meant to support you through your whole retirement. You’ll need to manage your money, so it doesn’t run out. 

You can still pay money into your pension in the future, up to your 75th birthday, but once you've taken out any taxable cash, you'll trigger the money purchase annual allowance (MPAA). This means you’ll be subject to tax charges if you contribute more than £10,000 in total to any defined contribution pensions in a tax year. You can read more about tax implications here.

An uncrystallised funds pension lump sum (UFPLS) allows you to take one or more lump sums directly from your pension, while drawdown allows you to take a flexible income from a drawdown pot, and leave the rest of your pension invested, taking any available tax-free lump sum you want to take when you create the drawdown pot. The biggest difference is how they’re taxed. When you move your money into drawdown, you can normally take 25% of the total amount you are moving out of your accumulation pot as a tax-free lump sum.  The rest of the money you have moved out of your accumulation pot (normally 75% of the total) is then available to provide taxable drawdown income. When you take an UFPLS, 25% of the payment is normally automatically free of tax - the rest is taxed as income.

The trustees of a SIPP will normally choose who receives the pension benefits left on your death. This choice is guided by your nomination, the terms and conditions and the scheme rules. Those beneficiaries can then choose to take the benefits flexibly as drawdown income.