Income Drawdown

Income Drawdown is a more flexible alternative to the traditional annuity route, offering greater choice and control for many people.


You can put off buying an annuity, and instead withdraw a regular income from the pension fund while the remainder of the fund stays invested. While the fund remains invested, you could benefit from growth in the market – and from ongoing advice.

Anyone from the age of 55 can set up a Drawdown contract. It could be suitable if you:

  • want to vary your income over time, to reflect changes in your circumstances
  • want your pension fund to continue benefitting from potential investment growth, and you’re prepared to accept the risk that the value of the fund may fall
  • have other sources of income
  • want to maximise the benefits your family receives upon your death, and also give you choice about how they receive these benefit
  • are in ill health, and would like to pass on remaining assets to your estate
  • want to control the time at which you buy an annuity
  • want to maintain an active interest in managing your pension fund
  • have a pension fund in excess of £30,000.


Typically, Income Drawdown suits people who are not averse to investment risk, and who have larger pension funds.

However, there are no guarantees that income will be greater than if the fund was used to purchase an annuity at retirement. There is also no guarantee that the initial income level selected will be maintained. The costs of Income Drawdown are normally higher than for an annuity.

Income Withdrawal Plans are complex. It’s a good idea to get professional advice because what you decide now will affect your pension income for the rest of your life.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested. HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.


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    This article is intended to provide a general appreciation of the topic and it is not advice.

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    Article expiry: 05 Apr 2019

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