To set up pension drawdown, get free Pension Wise guidance, check your provider offers it, choose investments, then ask for your tax-free cash and income.
Pension Wise comes first: MoneyHelper describes an appointment as free, impartial and government-backed. Would it help to talk the details through? The call-back form here arranges a free chat on the phone with an FCA-authorised adviser, who would be able to weigh up your pensions side by side.
How do you set up pension drawdown?
Drawdown is arranged with the provider that holds your defined contribution pension, and each provider has its own forms and online process. The usual order of the stages is:
- Take free guidance from Pension Wise.
- Check that your provider offers drawdown, or choose one that does and transfer.
- Decide how much of the pot to move into drawdown, and whether to take tax-free cash.
- Choose the investments, using the provider's investment pathways if you want ready-made options.
- Expect tax on the first payment, often on an emergency code.
- Check the money purchase annual allowance before the first income payment.
Check your age as well. According to MoneyHelper, drawdown is normally open from 55 (57 from April 2028), and earlier only if you are retiring early through poor health or your provider lists an earlier protected age. Our guide to taking your pension at 55 covers the age rules, and the pension drawdown guide explains what drawdown is and how it compares with an annuity.
Why take Pension Wise guidance before setting up drawdown?
Because it is free, and it explains the choices before you make one that is hard to undo. MoneyHelper says an appointment sets out the ways to take a defined contribution pension, and that the service is impartial. It covers when you can access your pots, how each option is usually taxed and how to spot scams.
Anyone 50 or over with a UK-based defined contribution pot can book, whatever its size, and some younger people qualify, for example after inheriting a pension. Online appointments are open at any time to those aged 50 to 74; a phone appointment lasts up to 60 minutes, and you can go back for another. The full details are in our Pension Wise guide.
Does your pension offer drawdown, or do you need to transfer?
Ask your provider, because not every provider offers it. GOV.UK's personal pensions guide notes that a provider may not offer every option, that you can move your pot elsewhere if none of its options suit, and that some charge for withdrawing cash.
Providers also differ in the detail. MoneyHelper's examples: minimum amounts you must put into drawdown, a small range of investments, higher fees, and rules that stop you taking lump sums. Useful questions before you commit:
- Is there a minimum pot or minimum amount to move into drawdown?
- Can you take irregular lump sums as well as regular income?
- What investments are available, and what do they cost each year?
- What does the provider charge for withdrawals?
If the answers do not suit you, see how to transfer a pension and choosing a drawdown provider; money already in drawdown elsewhere moves under its own rules, set out in transferring a drawdown pension. Never act on a cold call, visit, email or text urging you to take or move pension money, as it is likely to be a scam. Our pension scams guide covers how to check an approach.
Will your provider ask you about investment pathways?
Usually, if you are not advised. Under the FCA's COBS 19.10 rules (as the Handbook stood when last updated on 26 June 2026), the operator of a personal or stakeholder pension must follow set steps when you ask to put money into drawdown, or to transfer drawdown money to it. The first is to ask whether you want to use the pathways, choose your own investments or, where it applies, stay invested as you are. The four pathway choices and MoneyHelper's comparison tool are explained in choosing a drawdown provider.
The FCA sets out five cases where the pathways steps do not apply:
- buying a fixed-term product that pays a guaranteed income, a guaranteed capital return or both, with no investment risk if you stay in for the term;
- carrying out your earlier instructions to move funds into drawdown on a regular basis;
- being referred on by another firm that has already taken you through the pathways;
- the firm having determined, on reasonable grounds, that you received a personal recommendation on the move; and
- targeted support from the firm (or one it arranged) that recommends how to invest your drawdown money, where you have accepted that recommendation and are taking steps to act on it.
Pathways or your own picks? That turns on your health, other income and how long the money must last. Such points are what an FCA-authorised adviser covers once you request a call-back, at no cost. Whatever you choose, the investments can fall as well as rise, and you may get back less than you put in.
Deciding on tax-free cash when you start drawdown
You can usually take up to 25% of the pension tax-free, and HMRC's lump sum allowance caps the total at £268,275 across every scheme you belong to, unless a protected allowance raises it. Ask each provider how much you have already used.
Taking any is optional. MoneyHelper points out that you can move a whole pension into drawdown with no tax-free cash, or take any amount up to 25%, and that "The more you take upfront, the less you’ll have to give you an income later". Timing matters once you do take it. In the words of GOV.UK's personal pensions guide: "You’ll then have 6 months to start taking the remaining 75%, which you’ll usually pay tax on." The allowance is covered in the tax-free lump sum guide, and taking a quarter of each withdrawal tax-free instead is compared in flexi-access drawdown versus UFPLS.
Expect tax to come off your first income payment
Income from drawdown is taxed under PAYE, and the first payment often goes through on an emergency code. HMRC's PAYE Manual (PAYE94055) has the administrator use the emergency code on a month 1 basis for that first payment, with HMRC issuing a code for later ones. There are two exceptions: a P45 issued since 6 April this tax year, whose code is used instead; and a pension the scheme already pays you, whose code should be used only if the new payment is made at the same time.
GOV.UK explains that an emergency code works out tax on just that week's or month's pay, as though it came every week or month, so too much can come off. Under the same HMRC manual, people who have not emptied their pot can claim an in-year repayment; without a claim, HMRC reviews the position once the tax year ends. The government's pension tax refund checker covers claims after flexibly accessing some or all of a pension, and pension drawdown tax sets out each route.
Does taking only the tax-free cash trigger the money purchase annual allowance?
No, going by HMRC's own list: the tax-free lump sum is not among the trigger events set out in its Pensions Tax Manual (PTM056520). For a flexi-access drawdown fund set up on or after 6 April 2015, the trigger falls immediately before the first payment out of the fund, and the manual defines that first payment as income withdrawal or a short-term annuity bought with the fund. So it is the first income you draw that counts, not the cash or the setting up. A first uncrystallised funds pension lump sum is also a trigger.
Once triggered, PTM056510 says, the money purchase annual allowance rules apply for that tax year and every later one, and the allowance is £10,000 from 2023-24 onwards. That matters if you still work or plan to keep paying in. Your provider sends a flexible access statement within 31 days of the first time you flexibly access a pension. Every trigger, including some annuities, is on the money purchase annual allowance guide. Still paying in, with a first withdrawal coming? Leave your number on the form here, mention the timing, and an FCA-authorised adviser can consider how it fits.
Questions about setting up drawdown
How long does it take to set up pension drawdown?
It varies by provider and by whether a transfer has to happen first, so ask your provider for its timescales. Once you take tax-free cash, the 6 months GOV.UK gives you to start taking the remaining 75% begins to run. The adviser who phones after your enquiry here can talk through timing against your own pension.
Can I set up drawdown myself, without an adviser?
Yes. The investment pathways rules exist to help people who are not advised, and MoneyHelper says you can ask the provider to choose investments, pick your own, or pay an adviser to manage them. A "DIY" route simply means you make those choices yourself.
Can I put only part of my pension into drawdown?
Yes. MoneyHelper says you can move your pension into drawdown in one go or gradually over time, often called phased or partial drawdown. The rest stays where it is.
What is a flexi-access drawdown fund?
It is the invested pot your money sits in once it is in drawdown. From it, GOV.UK lists three things you can do: make withdrawals, buy a short-term annuity paying for up to 5 years, or pay in, with tax on contributions over the money purchase annual allowance.
How much should I take once it is set up?
That is a separate decision with its own risks; see how much to take from drawdown.
Ready to move your pension into drawdown?
Gather your pension statements, book Pension Wise, and ask your provider the questions above before you sign anything. To see how each step plays out for your own pots, request a call-back and expect a free chat down the line with an FCA-authorised adviser.