What is the cheapest pension drawdown provider in the UK?

It depends on your pot size and how you invest. Percentage-fee platforms (for example Vanguard at 0.15% a year, capped at £375) tend to be cheaper on smaller pots; flat-fee platforms can cost less on larger pots. Enter your own pot size in the comparison above to see every platform ranked. Every platform we list offers flexi-access drawdown.

How much does pension drawdown cost?

You usually pay a platform or product charge (a percentage of your pot or a flat fee), sometimes a separate drawdown or SIPP administration fee, fund charges on the investments you hold, and dealing charges when you buy or sell. As an example at £250,000, interactive investor’s Plus plan costs £179.88 a year including pension administration. Our comparison shows the platform and drawdown administration charges for your pot size; fund charges depend on the investments you choose and are shown separately.

Can I switch pension drawdown providers?

Yes. You can usually transfer a drawdown pension to another provider, and most platforms we list do not charge exit fees. Transfers commonly take a few weeks. Check for exit charges, any guaranteed benefits you would give up and time out of the market before switching.

What is the difference between a SIPP and pension drawdown?

A SIPP (self-invested personal pension) is the pension wrapper that holds your investments. Drawdown is how you take money out of it: you keep the pot invested and withdraw income or lump sums when you choose. Most SIPPs offer flexi-access drawdown.

How much can I withdraw from pension drawdown?

There is no legal limit. Normally up to 25% can be taken tax-free (subject to the £268,275 lump sum allowance), and the rest is taxed as income. Taking too much too early risks running out of money, so it is worth modelling different withdrawal rates. Our drawdown calculator can help.

Retirement Planning

Guided Retirement Explained: Default Pensions for Life

The government has launched consultations on Guided Retirement, a default pension designed to pay an income for life, and new retirement collective pensions. Here's what's proposed, when it could happen, and what it means for drawdown and annuity decisions.

By Phil Handley Published 3 November 2026 7 min read

On 3 November 2026 the government launched two consultations that could change what happens when you come to take your workplace pension. The headline from the Department for Work and Pensions (DWP) is that private sector savers will be offered a "default pension" at retirement, which is a ready-made option designed to pay an income for life. For some people it may be a new type of collective scheme.

These are proposals, not law yet. Here is what has been announced, what it could mean for drawdown and annuity decisions, and what it does not change today.

What has been announced

The Pensions Minister, Torsten Bell, announced two consultations:

Guided Retirement. DWP published it jointly with the FCA and The Pensions Regulator. It sets out how default pensions should work in practice.
Retirement Collective Pension Schemes (RCPS). This one consults on draft regulations so these schemes can be used as a default pension under Guided Retirement.

DWP says the plans cover "around 17 million private sector workers now saving into a pension". It also says that "in 2025/26, around 46% of first-time pension pot accesses involved the pot being fully withdrawn". The government's case is that automatic enrolment got people saving, but many reach retirement with a pot rather than a plan for a lasting income.

What is a "default pension"?

Under the Guided Retirement consultation, a default pension is "a method of taking pension benefits which is presented to an individual as a pre-selected option when they contact their pension provider to access their DC pension pot".

The main proposed features are:

Protection against running out of money. On pots above a proposed threshold of £10,000 (net of any tax-free lump sum), the default must protect against "longevity risk", meaning the risk of living longer than your savings last. Providers could not set an end age for that protection.
One point of consent. Payments would only start once you ask for them and confirm your bank details.
Choice stays. DWP says savers who want something different "will always be free to choose".
Cooling-off. The FCA's existing 30-day cancellation rights would apply to individual annuities within a default. The consultation asks whether a longer period should be required.

Defaults would be designed for groups of similar members, not tailored to you personally. Providers could build them in different ways, for example "flex then fix", where managed drawdown in earlier retirement is followed by a guaranteed income later.

What are Retirement Collective Pension Schemes?

RCPS is the new name for what was previously called retirement collective defined contribution, or R-CDC. The draft regulations consultation says the name change "does not reflect any change in policy intent or scheme design".

In an RCPS, members' money is pooled at retirement and trustees pay each member an income. The government response says pooling longevity risk means RCPS "can provide an income that is designed to last for life", and that they are "intended to target inflation-adjusted increases".

The key point is that RCPS income is a target, not a guarantee. The same response says schemes will have to make clear "that benefits are not guaranteed, may fluctuate", and that RCPS "may not be suitable for all individuals, including those with limited life expectancy". Pensions can be reduced if the scheme's funding falls short. That is a real difference from an annuity, where the insurer guarantees the income.

At first, the government intends RCPS to be available only through Guided Retirement, not as something you can buy on your own.

Who would it affect, and when?

The proposals cover workplace defined contribution (DC) pensions. That includes master trusts, group personal pensions, group stakeholder pensions and workplace SIPPs. They would also cover pensioner members who have already taken tax-free cash or are in drawdown with their workplace scheme.

Individual SIPPs and other non-workplace pensions are not currently proposed to be in scope. The consultation asks whether they should be.

The timetable is indicative and "could change", subject to consultation feedback and Parliament:

Guided Retirement consultation: runs from 3 November to 22 December 2026.
RCPS draft regulations consultation: closes at 11:59am on 15 December 2026.
RCPS regulations: expected in force around Autumn 2028.
Master trusts and FCA-regulated workplace schemes: projected compliance by Summer 2029.
Single employer trusts and some other schemes: projected compliance by Summer 2030.

How does this compare with today's DC pots?

Today, when you take a DC pot you choose for yourself between drawdown, an annuity, cash lump sums, or a mix. Under Guided Retirement, a workplace scheme would put a pre-built income option in front of you first. You could still take that option, or choose something else.

What it could mean for drawdown and annuity decisions

Drawdown on its own would not count as a default. The government says "a drawdown strategy alone cannot deliver" lifetime protection. Managed drawdown could still form part of a default, alongside an annuity or similar.
Bulk annuities may be cheaper but less personal. Schemes buying annuities in bulk could get better pricing, but bulk annuities "cannot be individually medically underwritten". If your health or lifestyle could qualify you for an enhanced annuity, shopping around may still matter.
Parts of a default may be irreversible. Before an irreversible stage, such as buying an annuity, providers would have to use their "best endeavours" to contact you first.
Tax-free cash would carry a warning. Providers would have to explain how taking a tax-free lump sum could reduce your later income. Taking only tax-free cash would not, by itself, trigger the default.

What this does and doesn't change for you now

Nothing changes today. Pension freedoms, drawdown, annuities and the tax rules all work exactly as they do now. Your current scheme is not required to offer a default pension yet.

If you are retiring in the next couple of years, these defaults are not expected to be in place before Summer 2029. Your decision is the same as it is today. You can compare drawdown and annuities, and use free, impartial Pension Wise guidance if you are 50 or over.

If you already have a personal SIPP, the proposals as they stand would not apply to it.

If you are further from retirement, your workplace scheme may offer a default pension by the time you retire. It may be worth weighing up later whether to keep a workplace pot where it is or consolidate it.

Risks to keep in mind. A default is designed for a group, not for you. Collective pensions can cut income. Annuities are usually irreversible once any cooling-off period has passed. Drawdown leaves your pot invested, so its value can fall as well as rise and it can run out.

Frequently asked questions

Is Guided Retirement law yet?

Not in its detailed form. The Pension Schemes Act 2026 introduced the core duties. The consultation sets out initial proposals for secondary legislation and FCA rules, and further consultations are expected before anything is final.

Will I be forced into a default pension?

No, according to the proposals. The default is a pre-selected option, payments only start when you ask, and DWP says savers "will always be free to choose" something else.

Is a retirement collective pension guaranteed?

No. The income is designed to last for life and aims to keep pace with inflation, but schemes must make clear that benefits "are not guaranteed, may fluctuate".

Does this affect my SIPP?

Workplace SIPPs are proposed to be in scope. Individual, non-workplace SIPPs are not currently proposed to be included, although the consultation asks whether they should be.

Can I still take 25% tax-free?

The current tax-free lump sum rules are unchanged. For RCPS, the government response says the maximum tax-free lump sum would be "broadly, 25%" of the uncrystallised DC pension rights transferred in.

This article is general guidance, not personal financial advice. It reflects proposals published on 3 November 2026, which may change. Pension values can fall as well as rise. If you're unsure what's right for you, use Pension Wise or speak to a regulated financial adviser.