Royal London Drawdown Charges Explained: Fees, Discounts and Costs in 2026

Royal London drawdown charges depend on the value of the pension, the charging arrangement attached to the plan, the investments held and whether adviser charges apply.

Royal London says customers are not charged an additional fee simply to start using its Income Release drawdown facility. However, the underlying Pension Portfolio continues to carry management charges.

Royal London’s April 2026 charging guide shows a basic charge of 1% before management charge discounts, with published effective annual management charges ranging from 0.75% to 0.35% for its tiered structure.

The published bands are:

Value Of Investments	Basic Charge	Management Charge Discount	AMC After Discount
£0 To £48,300	1.00%	0.25%	0.75%
£48,301 To £96,700	1.00%	0.50%	0.50%
£96,701 To £290,000	1.00%	0.55%	0.45%
£290,001 To £967,000	1.00%	0.60%	0.40%
£967,001 And Above	1.00%	0.65%	0.35%

These figures come from Royal London’s current Pensions and Investments Charges Guide.

Royal London states that the discount thresholds increase each year on 6 April in line with RPI and apply from the first plan anniversary after that date.

This means a headline claim that Royal London drawdown is either “free” or charged at one fixed percentage would be incomplete. The total cost can depend on several elements.

What Is Royal London Income Release?

Income Release is Royal London’s version of pension drawdown. It allows eligible holders of defined contribution pensions to access pension savings while leaving money they do not immediately withdraw invested.

Royal London explains that its plan can contain an Income Release Account alongside a Savings Account.

The Income Release Account is used for tax-free cash and selected income payments, while pension savings not moved into drawdown can remain in the Savings Account.

Pension drawdown can provide flexibility, but the remaining investments continue to rise or fall with markets. Retirement income is therefore not guaranteed to last indefinitely.

This wider investment risk is important when assessing Royal London drawdown fees. Charges are only one part of the calculation.

Investment performance, withdrawal rates, inflation and the length of retirement can all affect how long a pension lasts, which is why broader retirement income planning can matter alongside the provider’s annual fee.

How Does Royal London Pension Drawdown Work?

Royal London says Income Release allows customers to move some or all eligible pension savings into drawdown and choose from different income arrangements.

Depending on the individual’s circumstances, this can include:

• Taking Tax-Free Cash. Part of the pension can normally be accessed tax-free within applicable pension tax limits.
• Taking Regular Income. A saver can arrange regular payments from the drawdown pot.
• Taking One-Off Withdrawals. Additional amounts can be requested when needed.
• Leaving Money Invested. Money that has not been withdrawn can remain invested.
• Continuing Pension Contributions. Contributions may continue in appropriate circumstances, although taking taxable flexible income can trigger the Money Purchase Annual Allowance.

MoneyHelper’s flexi-access pension drawdown guidance states that pension savings can generally be moved into drawdown from age 55, rising to 57 from April 2028, subject to exceptions such as a protected pension age.

It also states that up to 25% can usually be taken tax-free, subject to the individual’s available lump sum allowance.

How much income a retiree actually needs is a separate question from how much the provider charges.

Household spending and expected UK retirement living costs can therefore influence whether a particular withdrawal strategy appears sustainable.

What Are The Current Royal London Drawdown Charges?

Royal London drawdown charges should be separated into different categories rather than treated as a single number.

The main Pension Portfolio charging structure can include:

• Basic Management Charge. Royal London states that the basic charge for its investment options is 1% a year.
• Management Charge Discount. A discount can reduce the effective AMC according to the value of investments.
• Additional Investment Charges. Extra charges can apply to many externally managed funds.
• Adviser Adjustments. An agreed adjustment can increase or reduce the management charge.
• Adviser Charges. Separate initial, ongoing or ad hoc adviser charges may also be deducted where agreed.

Royal London says the 1% basic charge is built into the fund price and deducted daily. Adjustments required to reach the appropriate overall management charge are made through the addition or cancellation of units.

Royal London Pension Portfolio Annual Management Charge

For customers using the published tiered structure, the effective annual management charge is determined by the relevant investment-value band.

For example, the April 2026 guide shows a 0.45% AMC for investments between £96,701 and £290,000 and a 0.40% AMC between £290,001 and £967,000.

However, a saver should not assume the standard table automatically represents the exact charge on an existing policy. Workplace discounts and individual plan terms can produce different results.

Royal London Charge Bands And Discounts

Royal London’s system is designed so that the effective percentage charge generally falls as the applicable investment value moves into a higher published band.

The distinction matters because the basic charge remains 1%, while the management charge discount becomes larger at higher investment values.

Royal London also says that associated investments can be relevant when calculating the discount. Its guidance refers to investments held across associated products such as Pension Portfolio and a Royal London Stocks and Shares ISA.

Does Royal London Charge Extra For Income Drawdown?

Royal London says there is no additional charge for accessing pension savings through Income Release, and its adviser information separately states that customers “aren’t charged to start using Income Release”.

That does not mean Royal London pension drawdown has no cost.

The Pension Portfolio management charge continues to matter, while external investment charges and adviser fees may apply depending on the arrangement.

There is another important detail. Royal London’s charging guide says that when money is moved from its investment options or Income Release is started, the management charge discount may reduce because the discount depends on the total value of relevant investments.

A saver could therefore enter drawdown without paying a separate setup charge but still experience a change in the effective percentage charged if the value used to calculate the discount changes.

How Much Could Royal London Drawdown Cost?

The percentages become easier to assess when converted into pounds.

The following examples use Royal London’s April 2026 published AMC bands and assume the percentage applies to the stated pension value.

They illustrate the core AMC only and do not include possible adviser charges, additional external investment charges or changes in fund value.

Royal London Drawdown Charges On A £100,000 Pension

A £100,000 investment falls within Royal London’s £96,701 to £290,000 published band.

At an AMC of 0.45%, the approximate annual management cost would be:

£100,000 × 0.45% = £450 a year

That is equivalent to approximately £37.50 a month when the annual figure is divided by 12, although Royal London’s actual charging mechanics should not be interpreted as a simple monthly invoice.

Royal London Drawdown Charges On A £250,000 Pension

A £250,000 pension remains within the same 0.45% band.

£250,000 × 0.45% = £1,125 a year

This is approximately £93.75 a month on a simple annual-cost-equivalent basis.

Royal London Drawdown Charges On A £500,000 Pension

A £500,000 pension falls within the £290,001 to £967,000 band, where the published AMC is 0.40%.

£500,000 × 0.40% = £2,000 a year

That equates to roughly £166.67 a month when expressed as a monthly equivalent.

These examples show why comparing percentages alone can be misleading. A lower percentage on a larger pension can still produce a higher total charge in pounds.

Withdrawals can also create tax consequences. Where PAYE initially deducts too much tax from flexible pension withdrawals, some savers may need to consider the rules surrounding overpaid pension tax refunds.

Do Royal London Drawdown Charges Fall As The Pension Pot Grows?

Under Royal London’s published tiered charging structure, the effective AMC generally becomes lower as the value moves through the stated bands.

For example:

• Up To £48,300. The published AMC is 0.75%.
• £48,301 To £96,700. The published AMC is 0.50%.
• £96,701 To £290,000. The published AMC is 0.45%.
• £290,001 To £967,000. The published AMC is 0.40%.
• £967,001 And Above. The published AMC is 0.35%.

Royal London describes this as a management charge discount that changes as the value of the pension and associated investments increases or decreases.

The saver should therefore look at the current policy value and applicable plan terms rather than relying on the percentage that applied when the pension was originally opened.

Are Investment Charges Included In Royal London Drawdown Fees?

Not every investment-related cost is necessarily represented by the headline AMC.

Royal London’s charging documentation distinguishes between the basic charge, management charge discount, additional investment charges and adviser adjustments.

Royal London Fund Charges

• The core management charge covers areas including plan administration and investment management for the relevant investment options.
• The exact investment chosen still matters because different arrangements can have different cost structures.

External Investment Charges

• Royal London provides access to investments managed by other fund managers and discretionary fund managers.
• Its April 2026 guide states that an additional investment charge applies to the majority of these external funds.
• A saver comparing Royal London drawdown fees should therefore check the actual funds held instead of assuming the Pension Portfolio AMC represents every possible investment cost.

Transaction Costs

• Transaction costs are different again.
• Royal London says dealing costs such as stamp duty and broker fees are included in the daily fund valuation and investment return rather than added as a separate customer charge. Customers can see transaction-cost information in their yearly statement.

Are Financial Adviser Fees Included In Royal London Drawdown Charges?

Financial adviser charges are separate from Royal London’s standard product charges where an adviser fee has been agreed.

Royal London’s documentation identifies three types:

• Initial Charges. These can cover advice connected with establishing a new plan or increment.
• Ongoing Charges. These can pay for continuing advice and services during the life of the plan.
• Ad Hoc Charges. These can cover one-off advice or reviews not covered by another arrangement.

Royal London also confirms that additional adviser charges can be built in when pension savings are accessed through Income Release.

Anyone paying for retirement advice should therefore compare the pension provider charge and the adviser charge separately. The combined amount can give a more realistic picture of the annual cost.

The FCA advises consumers to check whether a financial firm is authorised and has permission to provide the relevant service. Its Firm Checker can be used before engaging a financial advice business.

Do Workplace Royal London Pensions Have Different Drawdown Charges?

Yes, workplace Royal London pensions can have different charging arrangements.

Royal London’s guide states that members of workplace schemes may receive a scheme discount agreed with the employer.

After the discount, the workplace pension can have a flat-rate AMC rather than the standard tiered structure.

Royal London’s Income Release information also says that if the annual management charge for regular contributions is lower on a customer’s Royal London workplace pension, that lower charge can be retained when moving into income drawdown.

This is why a workplace pension holder should not assume that an online table showing the standard Royal London Pension Portfolio charge automatically represents the charge on that person’s policy.

Can Royal London Drawdown Charges Change After Withdrawals?

They can. Royal London explicitly says its management charge discount can change as the value of pension savings and associated investments increases or decreases.

It also warns that moving money or starting Income Release can reduce the discount if the total investment value used in the calculation falls.

For example, repeated withdrawals could reduce the pension value sufficiently to affect the relevant charging band.

Investment losses could have a similar effect, while investment growth could potentially move the value in the opposite direction.

Charges therefore need to be reviewed alongside the sustainability of withdrawals rather than treated as permanently fixed at the percentage shown on the day drawdown starts.

Tax also becomes more important once taxable pension income is taken. With the Personal Allowance remaining relevant to retirement income calculations, the growing number of pensioners paying Income Tax shows why gross withdrawal amounts and net retirement income should be considered separately.

Is Royal London Drawdown Expensive Compared With Other Providers?

There is no single answer because pension drawdown providers do not all charge in the same way.

A comparison should consider the total expected cost rather than simply identifying the lowest advertised percentage.

Relevant factors include:

• Platform Or Pension Charges. Some arrangements use percentage-based pricing while others may include fixed charges.
• Drawdown Charges. A provider may or may not impose separate charges for certain drawdown functions.
• Investment Costs. Fund choice can materially affect the overall cost.
• Advice Costs. Adviser fees can sit on top of product charges.
• Pension Value. Percentage charging has a different pound impact at £50,000 than at £500,000.
• Investment Choice. More specialist or externally managed investments may add charges.
• Service Requirements. The cheapest arrangement on paper may not provide the investment range or retirement features a saver wants.

For Royal London specifically, one notable feature is that Income Release does not carry a separate charge simply for starting drawdown, while its published Pension Portfolio AMC becomes lower across higher investment-value bands.

Cost should still be considered within the wider retirement plan. For example, a household combining pension withdrawals with savings or investments may have different priorities from someone relying primarily on pension income.

Approaches to generating monthly investment income in the UK can involve different tax, liquidity and investment considerations.

What Should Pension Savers Check Before Using Royal London Drawdown?

Before entering Income Release, a pension saver should establish the full cost and understand what will happen after withdrawals begin.

Important checks include:

• Confirm The Exact AMC. The saver should obtain the current charge applying to the individual Royal London plan.
• Check Workplace Discounts. Existing employer-negotiated terms may differ from standard Pension Portfolio rates.
• Review Investment Charges. External funds can carry additional charges.
• Identify Adviser Fees. Initial, ongoing and ad hoc charges should be separated from provider costs.
• Model Future Withdrawals. Falling pension values can affect both sustainability and the applicable management charge discount.
• Consider Income Tax. Taxable pension withdrawals can alter the individual’s overall Income Tax position.
• Check Existing Benefits. Valuable guarantees or protected features should be identified before a transfer or major change.
• Review Other Retirement Income. State Pension, savings, investments and other pensions should be considered alongside drawdown.

The 2026 State Pension increase is relevant when estimating total taxable retirement income rather than looking at private pension withdrawals in isolation.

Estate planning may also affect long-term withdrawal decisions. Changes to the treatment of unused pensions from April 2027 make the developing pension inheritance tax rules another factor that some pension holders may need to consider.

Conclusion: Understanding Royal London Drawdown Charges

Royal London drawdown charges are best understood as a combination of the underlying Pension Portfolio charging structure and any additional costs attached to investments or financial advice.

Royal London says there is no separate charge simply for starting Income Release. Its April 2026 guide shows a 1% basic charge before discounts, with published effective AMCs ranging from 0.75% for the lowest investment-value band to 0.35% for investments of £967,001 or more.

However, those figures should not automatically be treated as the amount every Royal London customer will pay. Workplace discounts, adviser adjustments, external investment charges, adviser fees and changes in pension value can all affect the final cost.

For that reason, UK pension savers considering Royal London Income Release should check their own policy documentation and personalised charges before making a retirement decision.

Frequently Asked Questions

What Are Royal London Drawdown Charges In 2026?

Royal London’s April 2026 guide shows a basic Pension Portfolio charge of 1% before discounts. Under the published tiered structure, the effective AMC ranges from 0.75% to 0.35% depending on investment value. Other investment or adviser charges can also apply.

Does Royal London Charge A Fee To Enter Income Drawdown?

Royal London says customers are not charged an additional fee simply to start using its Income Release facility. The underlying Pension Portfolio and any applicable investment or adviser charges still remain relevant.

How Much Does Royal London Charge On A £100,000 Pension?

Based on Royal London’s April 2026 standard tiered table, £100,000 falls within the 0.45% AMC band. That would produce an illustrative management cost of approximately £450 a year, excluding other applicable charges.

Do Royal London Pension Charges Reduce As The Pension Pot Gets Larger?

Under the published tiered structure, the effective AMC generally falls as investment value increases. Royal London states that the management charge discount changes as the value of relevant pension and investment holdings rises or falls.

Are Investment Charges Included In Royal London Drawdown Fees?

Not necessarily. Royal London states that additional investment charges apply to the majority of external funds available through its investment range. Transaction costs are reflected within fund valuations rather than charged separately to customers.

Are Financial Adviser Fees Included In Royal London Drawdown Charges?

Adviser charges are additional to Royal London’s product charges where they have been agreed. Royal London permits initial, ongoing and ad hoc adviser charging arrangements and says additional adviser charges can also be applied when Income Release is used.

Do Royal London Workplace Pensions Have Different Drawdown Charges?

They can. Royal London says workplace schemes may have an employer-agreed scheme discount producing a flat-rate AMC. It also states that a lower regular-contribution workplace AMC can be retained when an eligible customer moves into income drawdown.

Editorial Note: This article provides general information for UK pension savers and does not constitute personalised financial, pension, investment or tax advice. Pension charges, tax treatment and retirement options depend on individual circumstances and can change.