Interactive investor SIPP drawdown is set up online: move all or part of your SIPP into drawdown, take up to 25% tax-free, then choose income.
Free, impartial guidance from Pension Wise comes before any withdrawal screen, and ii's own screens point you to it. This guide follows ii's published drawdown pages, read on 26 October 2026 (ii can change them), from the first click to the first payment. Where pots, tax and health pull in different directions, one conversation may untangle them: this page's form books a ring-back, free, from an FCA-authorised adviser.
Three kinds of withdrawal, and why none can be cancelled
ii's withdrawals page separates three requests: tax-free cash (a pension commencement lump sum, or PCLS) paid when money moves into drawdown; an uncrystallised funds pension lump sum (UFPLS), part tax-free and part taxable; and income from money already in drawdown. It says "HMRC Tax Rules do not allow any withdrawal requests to be cancelled", and that "requesting the incorrect type can seriously impact pension plans and retirement outcomes".
The types affect your allowances differently, according to ii. Tax-free cash needs lump sum allowance available, and on its own it does not trigger the money purchase annual allowance. A UFPLS does trigger it. Income from a drawdown fund does not use up lump sum allowance. HMRC lists the first drawdown income payment and the first UFPLS as trigger events; after either, the money purchase annual allowance limits defined contribution savings to £10,000 a year (2026 to 2027). For the difference between the routes, see flexi-access drawdown and UFPLS.
How do I put an ii SIPP into drawdown?
You start from the "Pensions/Benefits" menu, choose "Withdrawing money", then set up or amend withdrawals. The route ii describes runs like this:
- A Pension Wise screen lets you book an appointment, say you have already had one, or "proceed without having an appointment".
- You pick your uncrystallised fund, meaning money not yet in drawdown, and read the six documents under "Taking your pension benefits".
- You enter how much to move into drawdown, or the full fund.
- You enter the tax-free lump sum, up to 25% with an upper limit of £268,275 unless you hold lifetime allowance protection. Entering 0 means no lump sum, and ii's minimum request is £1,000.
- You choose regular income or a one-off amount, and how to invest.
- You read a key feature illustration, complete a pension benefits questionnaire that flags risks, and submit.
ii says set-up usually takes no more than 10 working days. You need not move the whole SIPP: ii says you can go into drawdown gradually, leaving the rest invested. The minimum age is 55, or 57 from 6 April 2028 under the Finance Act 2022 unless you have a lower protected pension age, and you need not have retired. Setting up drawdown covers the general steps.
One SIPP, two pots: ii's notional split
ii does not physically separate drawdown and non-drawdown holdings. Once part of the SIPP is in drawdown, it assigns each pot a share of the whole fund without tying any shares or funds to either, so you can sell whichever holdings you like to pay a withdrawal. Contributions go to the non-drawdown pot, and most withdrawals, including income and tax-free cash, come from the drawdown pot. A UFPLS comes from the non-drawdown pot. ii recalculates the split after every addition or withdrawal, overnight, and shows it the next business day.
Gains and losses are shared proportionately. In ii's example, a SIPP of £700,000 after tax-free cash held £400,000 non-drawdown and £300,000 drawdown, a 57% and 43% split that stays put as markets move. Cash is not ring-fenced either: in ii's other example, a fall in the whole SIPP from £200,000 to £196,000 would have cut a later 25% tax-free payment from £10,000 to £9,800.
Taking, changing or stopping income from an ii SIPP
Income is managed in the same menu: choose the crystallised funds, then "Pension Income", then view, amend or stop regular payments. You set an amount and frequency, and ii says only dates at least 10 days ahead can be chosen. A one-off payment is a separate option. ii says it will usually be paid within 3-10 working days if there is cash in the SIPP, and later if investments must be sold first.
ii states that taking income carries no charge, as the monthly SIPP fee covers it. The fee itself, dealing costs and the rest are in Interactive Investor SIPP fees.
If ii does not yet have your tax code from HMRC, a first income payment may use an emergency tax code. ii explains that this assumes the same amount every month and gives only 1/12th of your tax-free personal allowance, so you may overpay; you can reclaim by contacting HMRC directly. What tax you would pay turns on your other income, and the page's short form brings a free call from an adviser who can explain it.
Investing the drawdown fund: your own choices or a Pathway
When money goes into drawdown ii asks how it will be invested. You can keep choosing your own, or use one of four Investment Pathways, the FCA-introduced options for drawdown. ii lists these funds, with ongoing charges:
| Goal on ii's list | Fund | Ongoing charge |
|---|---|---|
| No plans to touch the money for five years | Vanguard LifeStrategy 60% | 0.20% |
| Annuity within five years | iShares Core UK Gilts ETF | 0.07% |
| Long-term income within five years | Vanguard Target Retirement Fund 2025 | 0.24% |
| Take out all of it within five years | Royal London Short Term Money Market Fund | 0.10% |
Choosing a Pathway is optional, and you must still buy the fund yourself, online or by phone; ii sends a reminder if you do not. Values can fall as well as rise, so you may get back less than you paid in. See investing a drawdown pot.
What ii's drawdown calculator can and cannot tell you
The calculator gives an estimate, not a pension illustration; ii provides illustrations when a SIPP is opened, annually and when benefits are accessed. It assumes growth at the rate you pick, 2% inflation, the £14.99 Plus plan fee each month and fund charges of 0.2%. Its income is before tax and leaves out the State Pension, and ii says the age at which money runs out "could be well before or after the age shown". For amounts and sustainability, see how much to take from drawdown.
Lump sums, contributions and annuities with an ii SIPP
Can I take a lump sum from an ii SIPP without going into drawdown?
Yes, ii offers UFPLS online with no separate charge, and each lump sum needs the process repeating. The UFPLS guide has the rules.
Can I still pay into my SIPP once I take income?
Yes, ii says, but the £10,000 money purchase annual allowance above then applies. If you are still paying in, that is worth weighing before the first income payment.
Can I buy an annuity through ii?
ii lists an annuity among the alternatives to drawdown, bought from another provider rather than ii. Whether drawdown money can later go that way is covered in switching from drawdown to an annuity.
Before you submit a request to ii
A request cannot be reversed, so check the type, amount and date, then read the illustration ii generates. For a general picture read how pension drawdown works, and for ii itself, the Interactive Investor SIPP. Wanting a second opinion on your own numbers? Complete this page's form, name, age band, phone, email and postcode only, and an FCA-authorised adviser calls back; nothing to pay.
Sources, all read on 26 October 2026: ii, SIPP income drawdown, moving funds into drawdown, amending or stopping income, one-off payment, notional split, Investment Pathways, drawdown calculator, UFPLS and pension withdrawals pages; HMRC's pension schemes rates and Pensions Tax Manual PTM056520; Finance Act 2022, section 10.