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Taking retirement income

There are a number of ways clients can take an income from their pension with us. They can enter into flexi-access drawdown and you have the ability to arrange automated regular crystallisations on their behalf. In addition, we support clients with existing capped drawdown arrangements as long as they remain within the income limits. Clients can also make UFPLS withdrawals and can receive small pots, ill health and serious ill health payments (subject to meeting the conditions for these payments).

Clients can take 25% of the amount being crystallised from their pension as a tax-free lump sum. Clients with protected tax-free cash rights may be able to take a higher percentage.

Flexi-access drawdown is available to all pension clients (including phased drawdown). We also support clients with existing capped drawdown arrangements as long as they remain within the income limits.

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Submitting online drawdown applications

We understand the importance of clients receiving their tax-free cash and income as quickly as possible. To assist you in ensuring applications are processed as quickly as possible, we have outlined some useful tips for submitting clients’ instructions.

1. Select the appropriate option online 

The options you have are as follows:

  • If crystallising money from an existing Pension Savings Account, select Crystallise Account.
  • When transferring money from another provider to us and you would like to crystallise all or part of it, select Transfer to Immediate Drawdown.
  • When transferring crystallised money from another provider to us (any uncrystallised money held in the same account can also be transferred within this application), select Drawdown to drawdown transfer.

2. Consider switching to cash

When crystallising an existing account, it speeds up the payment process where money is already available within Product Cash for tax-free cash and any one-off income payment. It is worth considering ‘over selling’ to allow for platform and adviser fees which may be taken prior to us processing the benefit crystallisation event.

3. Choose which investments to sell for regular income

Regular pension withdrawals are paid from cash first within a drawdown account (where it is available). When setting up the instruction, you can choose from two options if not enough cash is available in a particular month:

  • You can nominate an investment to sell (once this has been sold down, we will then sell from the largest remaining fund and so on)
  • Alternatively, if there is no nomination, we will sell investments proportionally from all investments in the drawdown account.

For both these options, an amount to cover any applicable dealing fees or fund manager sell charges will also be sold.

If a client already has a regular income set up using the ‘largest investment’ method, then this will continue until you change the instruction. You will be able to choose from nominating an investment or selling proportionally.

4. Bank mandate verification

If we have not made payments to a bank account before, we’ll need to verify the account before making any payments. In some instances, where this verification fails, a copy bank statement received by the client in the post and dated within the last three months will need to be sent to us.

5. Lifetime allowance information

Please ensure you provide the percentage of the lifetime allowance used. For existing clients, we show this in either 'Client summary' or 'Account view'.

6. Additional information

If your application involves a transfer for a provider not on the Origo system, please send a completed discharge form or signed letter of authority.

We will also require evidence of any transitional protection – please see frequently asked questions below.

Frequently asked questions

How do I prepare a drawdown quote and/or pre-retirement quote online for my client?
How do I add a new application?
How are funds raised in order to pay a tax-free cash lump sum?
Should money be placed in the cash account prior to a payment request?
What are your timescales for payments to clients?
Do you verify the client’s bank account and, if so, how?
How do I register transitional protection?
Do you need to create a new drawdown account for each crystallisation?
How do I set up regular income payments for my client and what are the payment dates?
How do I set up an ad-hoc income payment for my client?
When does my client receive their drawdown income?
How can I change or cancel existing regular income instructions?
How are adviser initial fees paid when crystallising assets?
How do I ensure I receive the correct adviser initial fee?

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