Pension Drawdown vs Annuity
Compare flexible drawdown and guaranteed annuity income so you can understand the trade-offs before taking benefits.
What drawdown gives you
Drawdown keeps your pension invested while you take income as needed. It can be useful if you want flexibility over how much you take and when.
The trade-off is that the pension remains exposed to market movement, sequencing risk, and the chance of withdrawals being too high.
What an annuity gives you
An annuity converts some or all of your pension into a guaranteed income stream. That can reduce stress if covering fixed costs is the priority.
The trade-off is usually less flexibility and, once purchased, less opportunity to benefit from future investment growth.
How many people actually decide
The decision is not always either-or. Many people first secure the core income they need, then keep the remaining pension invested for flexibility and growth.
That is why a retirement income plan should look at your full household cash flow rather than a pension product in isolation.
Turn this guide into a practical plan
Use the related calculator to pressure-test your numbers, or speak to an adviser if you want guidance tailored to your situation.