Transfers in drawdown - frequently asked questions

We frequently get asked questions on transfers in drawdown, so we have pulled together the top 5 questions.
  1. Can you partially transfer a crystallised drawdown fund?
    No, a partial transfer is not possible. If the benefits have been designated to drawdown (crystallised) the whole of the drawdown pension fund or flexi-access drawdown fund under an arrangement must be transferred.
  2. Can more than one transfer in drawdown be combined into one drawdown plan?
    No, they can’t as a transfer in drawdown must be to a new plan with no assets in it - once one is transferred in, it blocks the transfer of the other(s). This works at the arrangement level so if several segments of a segmented plan are transferred, the segments must be transferred to separate segments of a segmented plan or to separate drawdown plans if the receiving scheme is a single arrangement scheme (so, unsegmented).
  3. Can a scheme use the statutory override to provide a notional drawdown so it can then be a transfer in drawdown?
    Yes, they can if the ceding scheme facilitates it. It would be sensible to obtain evidence from the ceding scheme the statutory override has been used for a clear audit trail.
  4. Say there is an entitlement to more than 25% tax-free cash in the current plan and an individual wants to go into drawdown, but the plan doesn't provide this. Can they take the higher tax-free cash from the current plan and then take drawdown from another plan via an open market option?
    No, the open market option only applies where someone takes an annuity from their current plan and the annuity is bought on the open market to take advantage of better annuity rates available from another provider. The open market option can only be used to buy an annuity; it can't be used to provide a different kind of benefit such as drawdown.

    As there is an entitlement to more than 25% tax-free cash but no access to drawdown from the current plan, the only way to access drawdown is to transfer before taking benefits to a pension plan that provides it.

    For the higher tax-free cash entitlement to survive the transfer, the transfer will have to be a block transfer or a wind-up transfer
  5. Can an individual with an entitlement to more than 25% tax-free cash take the tax-free cash from the current plan and transfer the rest to a drawdown plan with another provider?
    This can only be done if drawdown is an option in the current plan as the tax-free cash can only be paid in conjunction with pension entitlement from that plan.

    If it is, the current plan can pay the tax-free cash with the balance going into drawdown. A transfer in drawdown can then be done to another provider.

    Alternatively, the current plan can be transferred to a plan with drawdown, who will then pay the entitlement to more than 25%tax-free cash and provide drawdown as long as a block transfer can be done.


The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.

All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.


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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.