This website is for financial advisers within the UK; unless you are a financial adviser in the UK who has entered into separate contractual arrangements with Embark Investment Services Limited, trading as Scottish Widows Platform, for access to the secure parts of this website, the viewing of this web site is subject to the terms of use, which, by continuing to access this site, you acknowledge that you have read and accept.
We use cookies to provide you with a responsive service to make your experience of our website(s) better. Please confirm that you agree to our use of cookies in accordance with our cookies policy.
By continuing to use our website we will assume that you are happy to receive non-privacy intrusive cookies. Please be aware that if you disable cookies some functionality on the site will not work.
Alternatively, read our cookies policy to find out more about our cookie use and how to disable cookies.
Our adviser platform provides access to state-of-the-art technology, which we are committed to enhancing to make your life easier, increase your firm’s productivity, and help deliver better client outcomes.
As part of this, the Scottish Widows Platform now offers automated Drip-feed Drawdown functionality. Find out more about what this is, how it works, and why you might want to use this functionality for the benefit of your clients.
Drip-feed Drawdown (DFD) is digital functionality to help your clients take regular income from their pension. They can choose to take only tax-free cash (PCLS) or a mix of tax-free cash and taxable income, helping them to be more tax-efficient in retirement. The key benefits of Drip-feed Drawdown are:
You can select from the following options for your clients:
Payments can be set up on a monthly, quarterly, half-yearly, or annual basis. The value of the first payment amount can be set up different from any subsequent regular payments.
Drip-feed Drawdown will suit clients who do not need to take all their tax-free cash at once.
By taking regular payments of tax-free cash and pension income, you can help your clients manage when they start paying income tax on their taxable income.
Drip-feed Drawdown isn’t just helpful for clients close to the basic rate tax threshold. It can also be used for those near the higher or additional rate tax thresholds, especially as they move gradually into retirement.
If your client wanted to take £1,000 out of their pension, here are three ways to do this with Drip-feed (examples 2 and 3 include taxable income):
Tax-free cash only
Tax-free cash and part taxable income
Tax-free cash and all taxable income
Remember, if your client takes taxable income, the Money Purchase Annual Allowance will apply, limiting future pension contributions.
You can access this through the Pension Management dashboard on the Platform, where you’ll have the following options:
For more detail on these digital journeys view our ‘Adviser guide to arranging pension benefits for clients on the platform’.
When you set up Drip-feed Drawdown the first payment amount can be different from the subsequent regular payments.
Any payment dates need to be set up a minimum of 12 working days in the future. Our system will carry out a number of automatic checks and validations during this period to ensure the payment proceeds successfully.
PCLS and any income will appear as separate payments, they will normally be paid into your client’s bank account on the same day.
They can take income from these funds too. The frequency and date of payment will need to be the same for both payments. These will also need to be paid into the same destination account.
When setting up Drip-feed Drawdown you will be asked to confirm the income payment strategy. You can choose to sell assets proportionally or select specific assets.
No, there’s no specific charge for Drip-feed drawdown. Your normal pension account charges will apply.
Yes, you can. Any changes can be made in the edit existing pension withdrawals Journey within the platform.