Why large pots need a different approach
With a large pension in drawdown, the platform's charging structure is the single biggest controllable cost. Percentage fees that look trivial on a small pot become enormous on £250,000 or £500,000. A flat-fee platform can save thousands of pounds a year, money that stays invested and extends how long your pot lasts.
| Platform | Charge | Annual cost on £400k | Best for |
|---|---|---|---|
| interactive investor | £21.99/mo (Pension Builder) | ~£264 | Outright cost winner |
| AJ Bell | 0.25% (cap £120 shares) | £1,000 (funds) | Mid-large pots |
| Hargreaves Lansdown | 0.45% (cap £200 shares) | £1,800 (funds) | Service, ETF-heavy capping |
| Vanguard | 0.15% (cap £375) | £375 | Vanguard-only investors |
| Fidelity | 0.20% over £1m tier | ~£800 | Very large fund holdings |
The flat-fee advantage
On a £400,000 pot, Hargreaves Lansdown's 0.45% costs roughly £1,800 a year in fund holdings, against interactive investor's flat £264. Over a 25-year retirement, that £1,500 annual difference — compounding on an invested pot — can easily exceed £60,000. Vanguard's £375 cap also makes it strong if you only want Vanguard funds. Holding ETFs and shares rather than funds at HL or AJ Bell triggers their share caps, cutting costs too.
Beyond cost: managing a large pot
Large pots also benefit from diversification across asset classes, careful tax planning to avoid higher-rate bands on withdrawals, and consideration of the inheritance tax advantages of leaving a pension invested. Many people with substantial pots take regulated advice for the tax and estate planning even if they run the investments themselves.
Verdict
For large drawdown pots, interactive investor is the clear cost winner, with Vanguard a strong runner-up for Vanguard-only investors and Hargreaves Lansdown justified only if you value its service or hold mainly capped ETFs. Set a sustainable income with our 4% withdrawal rule guide, compare providers in our best drawdown providers guide, and model your pot with our pension calculator.