What’s the difference between drawdown and an annuity?

Drawdown and annuities are two different ways of taking money from your pension. An annuity gives you a guaranteed income for the rest of your life, which you’ll buy with an initial lump sum of money (normally from your pension pot). Learn more about pension annuities.

Drawdown lets you withdraw from your pension pot, which could be a regular amount or as and when you need it. There are higher risks with drawdown – as the money that’s left in your pot will still be invested, so its value could fall as well as rise – but also more flexibility. Find out about income drawdown.