Drawdown vs Annuity – Which Is Right for You?
When you reach retirement, you have two main options for taking income from your pension: drawdown or an annuity.
Drawdown allows your pension to remain invested while you take a flexible income. This gives you control and the potential for growth, but comes with investment risk and requires careful management to avoid running out of money later in life.
An annuity, on the other hand, provides a guaranteed income for life (or a fixed period). This offers simplicity and certainty, and can be particularly suitable for those wanting peace of mind and less involvement in managing investments.
We’ll help you understand the pros and cons of each approach—and, in many cases, recommend a combination of both to meet your needs.
Tax Efficiency
We help you make full use of pension allowances, tax-free cash options, and income tax thresholds to ensure that your retirement income is withdrawn in the most tax-efficient way possible. Whether you're still contributing or ready to access your funds, tax planning is a key part of the advice we provide.
Sustainable Retirement Income & Cashflow Modelling
It’s important that your retirement income is not just sufficient for today, but sustainable for the years ahead. We’ll stress-test your plan to make sure it can support your lifestyle over the long term, taking into account inflation, market volatility, and any future goals or changes in circumstances.
As part of your retirement planning, we use cashflow modelling to map out your financial future. This visual tool helps us project your income, expenses, assets, and investments over time - so you can see how long your money might last, how your pension withdrawals may affect your future finances, and whether you're on track to meet your retirement goals.
It allows us to test different scenarios - such as retiring earlier, adjusting income, or gifting money - to give you clarity and confidence in your financial decisions.