Interactive Investor

Move funds into flexi-access drawdown and take income

You can now move your pension into drawdown online. 

At the same time, you can request to take up to 25% of the funds you move into drawdown as a tax free lump sum, and/or set up a regular taxable income from your drawdown pot.

Click here for instructions on how to take or amend your income from an existing drawdown pot.

  • The process should take around 30 minutes. It usually takes no more than 10 working days after this to set up your benefits.

Step-by-step

Step 1.

From the 'SIPP' menu in your online account, select 'Taking benefits' (under the Benefits heading).

If you haven't done so already, you will need to add a bank account before you can continue.

Then select 'start taking / amend your existing benefits'.

Step 2.

You will then see a summary of your available pension funds. Scroll to the bottom of the page and click ‘Next’.

Step 3.

Here, select your uncrystallised fund (this simply means funds you haven't moved into drawdown yet).

Take time to read the six documents under ‘Taking your pension benefits’.

Doing this will allow you to proceed to the next step.

Step 4.

Tick to confirm you have read the documents, and select ‘Crystallise funds into drawdown’.

Step 5.

Here you can choose the amount you want to crystallise (move into drawdown), or select ‘full fund amount’.

Step 6.

Next, enter how much of your pension you would like to take as a tax-free lump sum (up to 25%). Enter ‘0’ if you don’t want to take a lump sum.

Then select whether you’d like to take a regular income (which will be treated as taxable income).

Step 7.

If you are taking a regular income, you can select the frequency and amount you would like to take.

You also have the option to take a one-off taxable amount.

Now click ‘Continue’.

Step 8.

Here you will be asked how you want to invest your SIPP fund in future.

If you don't want to choose your own investment strategy, you can use an investment pathway.

These are investment funds selected by our experts to match four common goals that people have when moving funds into drawdown.

Learn more about our Investment Pathways here.

Step 9.

On this screen, confirm whether you have any form of Lifetime Allowance protection.

If you have any LTA protection, we will need a copy of any protection certificates before we can set up your benefits.

  • Please send us a secure message from your online account and attach the document(s).
  • Or you can post the documents to: Pensions Team, interactive investor, 2nd floor, One Embankment, Neville Street, Leeds, LS1 4DW.

Step 10.

We will then ask you to review your illustration of benefits.

Click 'view key feature illustration' to see a breakdown of your drawdown arrangements.

Step 11.

You will then be asked to complete a pension benefits questionnaire. Your answers will flag the important risks you should consider before taking benefits.

Step 12.

Check your benefit request summary and make sure it is accurate.

Once you have read through the declaration, click ‘Submit this benefit request’.

What’s next?

  • It usually takes no more than 10 working days to set up your benefits.
  • If you choose to take a taxable income payment as well as your tax free lump sum and if this is your first income withdrawal from your SIPP, you may be charged an emergency tax rate if we have not received confirmation of your tax code from HMRC. The emergency tax code assumes that you will carry on receiving the same amount each month even if the money you are taking is a one-off withdrawal. On an emergency tax code, you will also only receive 1/12th of your tax-free personal allowance. This may mean you pay more tax than is actually due. You can reclaim emergency tax on pensions by contacting HMRC directly.