Income Drawdown

Income drawdown is the flexible, and now overwhelmingly the most popular, way of taking money from a defined contribution pension pot without buying an annuity. Rather than exchanging your pot for a fixed income for life, flexi-access drawdown lets you keep your pension invested and withdraw money as and when you choose, giving you far more control over how and when you spend your retirement savings. That flexibility is exactly why drawdown has become the default choice for so many retirees since the 2015 pension freedoms, but it also shifts a lot of responsibility onto your own shoulders: there's no cap on how much you can withdraw, no guarantee your pot will last as long as you need it to, and no one managing the investment risk on your behalf. Getting drawdown right means understanding several interlinked pieces: how flexi-access drawdown actually works mechanically, how much you can sensibly withdraw each year without running out of money, how those withdrawals are taxed, and the specific investment risk, known as sequencing risk, that makes the order of returns matter so much once you start withdrawing. Each guide below tackles one of these pieces in detail, with worked examples and clear comparisons, so you can build a full picture of how drawdown works before making decisions that are often difficult or impossible to reverse. As with every guide on this site, the information here is educational and general in nature, not personalised financial advice — for decisions about how to access your pension, speak to a regulated financial adviser or use the free, impartial guidance available from MoneyHelper (moneyhelper.org.uk).