What income drawdown providers do
Income drawdown keeps your pension invested while you draw a flexible income, instead of buying an annuity. The best providers charge no extra drawdown fee, let you take ad-hoc or regular payments freely, and give you the investment choice to sustain withdrawals. Cost matters enormously because charges compound against a shrinking pot.
| Provider | Drawdown set-up fee | Platform fee | Income flexibility |
|---|---|---|---|
| AJ Bell | None | 0.25% (cap £120 shares) | Regular & ad-hoc, free |
| Vanguard | None | 0.15% (cap £375) | Flexible, low cost |
| Hargreaves Lansdown | None | 0.45% (cap £200 shares) | Highly flexible, strong service |
| interactive investor | £0 (Pension Builder plan) | £12.99–£21.99/mo flat | Flexible; best for big pots |
| Fidelity | None | 0.35% | Flexible, guidance available |
Watch the charges on a shrinking pot
Unlike accumulation, in drawdown your pot is being spent down, so percentage fees take a steady bite. On a £250,000 pot, HL's 0.45% costs £1,125 a year against interactive investor's flat £263 (Pension Builder), a gap that materially affects how long your money lasts. Following the 4% rule, that £250,000 might support around £10,000 a year initially — so an £860 fee saving is meaningful.
Investment matters as much as fees
A drawdown pot must keep growing to outlast you, so most retirees hold a balanced multi-asset fund or a mix of global equities and bonds. All five providers above offer suitable low-cost options; the difference is mainly cost and service.
Verdict
AJ Bell and Vanguard offer the best value for typical drawdown pots, Hargreaves Lansdown leads on service, and interactive investor is unbeatable on large pots thanks to its flat fee. Read our 4% withdrawal rule guide to set a sustainable income, compare existing options in our best drawdown providers guide, and test scenarios in our pension calculator.