Vanguard vs Fidelity: Which is Better for Pension Drawdown in 2026?

Vanguard and Fidelity are two of the most recognised names in UK investing, but which platform offers better value for pension drawdown? We compare their fees, features, and suitability for different types of retirees.

The Fee Comparison

When it comes to platform fees, both providers offer competitive pricing, but their structures differ significantly.

Vanguard charges a flat 0.15% annual platform fee, capped at £375 per year. This makes it exceptionally cost-effective for larger pension pots. However, there's a minimum fee of around £48 per year (£4 per month) for smaller pots.

Fidelity charges 0.35% on the first £250,000, then 0.20% on amounts between £250,000 and £1 million. For a £250,000 pension pot, this works out at £875 per year compared to Vanguard's capped £375.

Fee Comparison by Pot Size

• £100,000 pot: Vanguard £150 vs Fidelity £350
• £250,000 pot: Vanguard £375 vs Fidelity £875
• £500,000 pot: Vanguard £375 vs Fidelity £1,375

On pure platform fees alone, Vanguard is significantly cheaper, particularly for pots above £250,000 where the annual cap provides substantial savings.

Investment Choice

This is where the two platforms diverge most dramatically.

Vanguard limits you to approximately 75 Vanguard funds and ETFs. While these cover most asset classes and include excellent options like the LifeStrategy range and Target Retirement funds, you cannot invest in individual shares, non-Vanguard funds, or investment trusts.

Fidelity offers access to over 3,000 funds from multiple providers, plus shares, ETFs, and investment trusts. This gives you far greater flexibility to build a diversified portfolio or follow a specific investment strategy.

For most passive investors who are happy with index funds, Vanguard's range is perfectly adequate. However, if you want to include specific active funds, individual dividend-paying shares, or investment trusts in your drawdown portfolio, Fidelity provides that flexibility.

Drawdown Features

Both platforms offer flexible drawdown with no setup fees, but their approaches differ:

Vanguard's drawdown features:

• No charge for setting up drawdown
• Regular or ad-hoc withdrawals available
• Simple, straightforward interface
• Limited customer service hours
• No telephone dealing

Fidelity's drawdown features:

• No setup fee for drawdown
• Flexible withdrawal options
• Retirement planning tools and calculators
• Extensive customer support including telephone service
• Access to guidance services

Customer Service and Support

Fidelity has traditionally offered more comprehensive customer support, with longer telephone hours and a wider range of contact options. Vanguard's service is more basic, reflecting its low-cost model.

For those who value being able to speak to someone about their pension, or who might need guidance during the drawdown process, Fidelity's superior support may justify some of the fee difference.

Which Provider Suits You Best?

Choose Vanguard if:

• You're a confident, self-directed investor
• You prefer passive index investing
• You have a larger pot (£250,000+) and want to minimise fees
• You don't need extensive customer support
• Simplicity appeals to you

Choose Fidelity if:

• You want access to a wider range of investments
• You value comprehensive customer support
• You want to include individual shares in your pension
• You prefer having planning tools and guidance available
• You have a smaller pot where the fee difference is less significant

The Verdict

For pure cost-effectiveness with a passive investment approach, Vanguard is hard to beat. The fee cap means significant savings for larger pots, and the fund range, while limited, covers most investors' needs perfectly well.

However, Fidelity offers genuine advantages in investment flexibility and customer support. If you want a more hands-on approach to managing your drawdown investments, or simply value being able to speak to someone when needed, the higher fees may be worthwhile.

Many retirees actually use both platforms, keeping a core low-cost portfolio at Vanguard while using Fidelity for more specialist investments.

Use our fee comparison calculator to see exactly how much each platform would cost for your specific pot size, and read our detailed Vanguard review and Fidelity review for more information.

The information in this article is for general guidance only and does not constitute financial advice. Investment values can fall as well as rise. For advice tailored to your circumstances, speak to a qualified financial adviser.