Phoenix Life pension drawdown depends on your plan: Phoenix says many of its plans don't directly offer flexible access, so you may need to move.

Free, impartial guidance on drawdown comes from Pension Wise, a government-backed service from MoneyHelper. Phoenix Life plans can hold guarantees that drawdown would not keep. Whether yours holds one is worth settling early, and it is the kind of detail an FCA-authorised adviser sorts out on a free ring-back that you can ask for with the form on this page.

Can you take drawdown with a Phoenix Life pension?

Sometimes, but not on every plan. Phoenix's flexible income page says "Some pension plans directly offer this option, but you may need to transfer to a new pension plan if your current plan doesn't offer this." It also says "Many Phoenix Life plans don’t directly offer flexible access". Which group yours falls into is set by the plan's own terms, and the retirement pack holds the details of your current pension.

Phoenix describes the option like this: you leave the pot invested and take money as and when you need it. A quarter of the pot can usually be taken tax-free, and other withdrawals are taxed as income or lump sums. For the mechanics that apply with any provider, read how pension drawdown works; the practical steps are in setting up drawdown.

What does Phoenix say about Standard Life's Active Money Personal Pension?

After saying that many plans lack direct flexible access, Phoenix adds that "you may want to consider transferring to an Active Money Personal Pension with Standard Life", and that Standard Life is, like Phoenix Life, part of Standard Life plc. That suggestion is Phoenix's own, about a company in its own group.

The same page leaves the choice open: "You can choose any pension provider and we recommend you shop around for the right one for you." It also says you don't have to accept what your current provider offers, as others might give a better deal. Comparing is covered in choosing a drawdown provider, which sets out what to look at without ranking anyone.

Which Phoenix Life guarantees and charges could affect a move to drawdown?

Two features of an older plan can decide whether moving makes sense. Phoenix tells you to check them first.

  • A guaranteed annuity rate. Phoenix says to make sure a flexible income "doesn’t mean missing out on special features on your pension plan like guaranteed annuity rates (GAR)", and to check what features your pension has before deciding. Drawdown pays no guaranteed income, so a guarantee you hold could be given up by moving. What a guaranteed annuity rate is explains the feature.
  • An exit reduction. Phoenix warns that if you access benefits before your retirement date or transfer to a new plan, "there may be an early exit reduction fee or a market value reduction on your policy, so your pension savings may reduce." A market value reduction is explained separately, and with-profits policies have their own page.
  • The advice rule. Phoenix says: "Remember, if your policy has a safeguarded benefit, and you’re planning to transfer more than £30,000, you’re required to take advice by law." Its cash-in page names a guaranteed annuity rate as one such benefit, and under regulation 5 of the 2015 advice regulations the £30,000 test is the transfer value of the safeguarded benefits. Pension transfer specialists explains who gives that advice.

Your retirement pack sets out which of these applies to your policy, and Phoenix says no request to access your savings can be processed until the pack has been sent. How to ask for the pack is on cashing in a Phoenix Life pension, and the transfer paperwork is on moving a Phoenix Life pension.

Phoenix describes drawdown as flexible. Whether that beats a guarantee you already hold is a question for the figures in your papers, and this page's form lets an FCA-authorised adviser ring to talk them over, free.

How would a Phoenix Life pot be invested once in drawdown?

You choose, according to Phoenix's flexible income page, and most providers offer ready-made Investment Pathway Funds for what is left after the tax-free lump sum. It lists four, each matched to a plan: leaving the savings untouched for at least five years, setting up a guaranteed annuity within five years, starting a long-term income within five years, or taking all the money within five years.

Income from these funds "isn't guaranteed for life", the page adds, though you can change what you take or switch to other retirement products later. Which pathways a plan offers is set by the provider you draw down with, so compare them alongside charges when you look at how drawdown works in general.

What risks does Phoenix point out with drawdown?

Phoenix's own list is blunt. Your pension stays invested, so it "has the potential to grow but may go down in value also", and you "could run out of money if you take too much out or if your pension investments perform badly". You may get back less than you paid in. Its video adds that the option "won't guarantee an income for life". Our own page on how safe drawdown is goes further.

Two money rules matter for later. Phoenix says that once you access your pension flexibly, apart from solely taking tax-free cash, a lower Money Purchase Annual Allowance of £10,000 applies to what you can pay in. And you can still buy an annuity later if that feels right, as switching from drawdown to an annuity explains.

A few more points on Phoenix Life drawdown

Does Phoenix suggest taking advice before choosing drawdown?

Yes. Its flexible income page recommends independent financial advice before you decide, alongside free guidance from Pension Wise. For a safeguarded benefit worth more than £30,000, advice on a transfer is a legal requirement, not a suggestion.

Does drawdown mean I lose the tax-free quarter?

No. Phoenix says a quarter of the pot can usually be taken tax-free, with the rest taxed as income when withdrawn. The size of the allowance is covered in taking the tax-free lump sum.

Can I keep part of my pot as a guarantee and put the rest into drawdown?

That depends on how your plan and any receiving provider treat part-transfers, so ask both before you start. The options on offer are compared in taking pension in stages.

Should I wait for Phoenix to offer drawdown on my plan?

Phoenix's own advice is to check the features of your pension first and to shop around, and it says you can choose any provider. How drawdown compares with other routes is in annuity or drawdown.

Leave your number with this page's short form if the guarantee question is still open; an FCA-authorised adviser will phone that number to go over the figures, free.