What does Drawdown mean?

The lifestyle strategy you’re invested in is targeting drawdown. Investing your retirement savings in this strategy means that at your chosen retirement age you’ll have flexibility on how you take your retirement savings.

You can keep your savings invested until you need them, take a lump sum when you need it and regular payments if you like - the choice is yours. Remember, the value of investments can fall as well as rise so you could get back less than you pay in.

Take the income you need, when you need it – also known as 'Drawdown'.

1 - Take a tax-free lump sum. 2 - Give your savings more time to grow. 3 - Continue saving for your future. 4 - Change your mind whenever you like


You can choose your own investments if you want to and you don't have to choose drawdown as an option at retirement.

When you reach age 55, you will be able to access your retirement savings, even if you’re still working.

So whenever the time feels right for you, you’ll find three main ways to enjoy the money you’ve saved.

Option one – take it all as cash. You can have all your retirement savings paid in one lump sum; however, if you’re planning to use this money to live on, you’ll need to make sure it lasts for as long as you need it to. You may also be able to take some smaller cash payments, and spread them over a number of years. Either way, you should bear in mind the more cash you take out of your plan, the more you may end up giving to the tax man.

Option two – get flexible access to your savings. If you want more control over the money you’ve saved, you can keep it invested in your plan while you gradually take the income you need. As your money stays invested, it still has time to grow, but there’s a risk if your investments don’t do well or if you live longer than expected. Your savings could run out earlier than you’d like.

Option three – buy a secure income. If you’re worried about your money running out, you can give your savings to an insurance company, and in return, they’ll pay you a guaranteed, regular income for the rest of your life. Before going down this route, you’ll need to be sure it suits your needs, because once things are up and running you won’t be able to change your mind.

You can combine any of your three options, and whatever you decide to do, you can usually take up to a quarter of your retirement savings completely tax free. Of course, there’s no rush to do anything. You can put things off until whenever you’re ready. To find out more about your retirement options, talk to your financial adviser, or visit www.royallondon.com/retirement.

Need to make a change?

If you think you’d like to change your pension investments then you should talk to a financial adviser.

Find a financial adviser