Drawdown

Flexi Access Drawdown

Also referred to as Income Drawdown, allows you to retain control of your pension savings.  You are able to withdraw 25% of the pot as a tax-free lump sum, but the balance of the fund remains invested and you can then draw as much (100% of the balance, subject to taxation), or as little (the minimum is zero) as you like.

This route gives great flexibility and planning opportunities, allowing you to phase your retirement and continue to give your funds growth potential through investment returns during retirement, potentially reduce taxation on any withdrawals whilst also leaving a legacy for loved ones after you have gone.

However, Drawdown is a more expensive option than an annuity and ideally should have ongoing reviews to ensure you remain on track for your retirement goals. There is also the risk that if the underlying investments perform poorly, or too much is withdrawn in the early years, you may end up worse off in later retirement.