Small pots need low percentage fees
With a small pension, percentage-based platform fees hurt less in absolute terms but flat fees and minimum charges can become disproportionately expensive. The goal is to avoid fixed monthly fees and minimum-charge structures, and to keep both platform and fund costs low so a modest pot is not eaten away.
| Option | Cost on £30k | Why it suits small pots |
|---|---|---|
| Vanguard SIPP | 0.15% = £45/yr | Lowest percentage fee, no flat fee |
| AJ Bell | 0.25% = £75/yr | Low fee, whole of market |
| PensionBee | 0.50%–0.95% | Simple app-led drawdown |
| interactive investor | £12.99/mo = £156/yr | Poor value at this size |
| UFPLS / small-pots rule | N/A | Take cash without formal drawdown |
Watch out for flat fees
On a £30,000 pot, interactive investor's flat £156 a year equals 0.52% — far more than Vanguard's £45. Flat-fee platforms that are brilliant for large pots are poor value for small ones. For small drawdown pots, percentage chargers like Vanguard and AJ Bell almost always win.
Alternatives to formal drawdown
For very small pots you may not need formal flexi-access drawdown at all. An Uncrystallised Funds Pension Lump Sum (UFPLS) lets you take chunks where 25% of each is tax-free and the rest is taxed. Separately, the small-pots rule lets you take pots worth £10,000 or less as a lump sum (25% tax-free) without triggering the Money Purchase Annual Allowance — useful if you want to keep contributing elsewhere.
Verdict
For small drawdown pots, Vanguard and AJ Bell offer the lowest-cost route, while PensionBee suits those wanting a simple app. Avoid flat-fee platforms below about £80,000. Consider UFPLS or the small-pots rule for very small or one-off withdrawals. Set a sustainable rate with our 4% withdrawal rule guide, compare providers in our best drawdown providers guide, and plan with our pension calculator.