Project how long your pension lasts in flexible drawdown. Enter your pot, annual withdrawal, growth rate and State Pension to see pot depletion age, values at 75 and 80, and monthly income.
Last updated: April 2026
Your retirement details
Max £268,275 (lump sum allowance 2026/27). Taking cash reduces remaining invested pot.
Many advisers use 4–6% for a balanced drawdown portfolio after charges.
Full new State Pension 2026/27: £11,502. Reduces required drawdown from pot.
Drawdown projection
Pot lasts until age
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Investable pot after cash -
Withdrawal rate (year 1) -
Pot value at age 75 -
Pot value at age 80 -
Monthly income (yr 1, before tax) -
How pension drawdown works
Flexi-access drawdown (introduced in April 2015) allows pension savers to take their pension pot and withdraw from it flexibly - any amount, at any time, with no minimum or maximum annual withdrawal. The pot remains invested, so it can continue to grow while withdrawals are taken. Up to 25% of the pot can be taken as a tax-free lump sum (capped at the lump sum allowance of £268,275); the rest is taxed as income when withdrawn.
The sequence of returns risk
The biggest risk in drawdown is not average returns but the sequence of returns - a poor run of investment performance early in retirement, combined with regular withdrawals, can deplete the pot far faster than average projections suggest. A 20% portfolio fall in year one of retirement permanently removes the ability of that capital to recover and compound. This is why drawdown requires a more conservative investment approach than accumulation, typically maintaining a cash or short-bond buffer of 1–2 years' income to avoid forced selling during market falls.
Drawdown versus annuity
An annuity converts your pot into a guaranteed income for life (or a fixed term), eliminating longevity risk and sequence of returns risk. Drawdown offers flexibility, the potential for growth, and inheritance value (the remaining pot passes to beneficiaries outside of the estate for IHT purposes). Many retirees use a blend - taking enough annuity income alongside the State Pension to cover essential expenditure, and using drawdown for discretionary spending. This floor-and-upside approach combines security with flexibility.
Frequently asked questions
Withdrawals from pension drawdown are taxed as income in the year they are received, at your marginal income tax rate. The 25% tax-free cash is genuinely tax-free. Careful management of drawdown withdrawals to stay within tax band boundaries can significantly reduce the total tax paid over a retirement. For example, staying within the basic rate band (£50,270 in 2026/27) rather than withdrawing large lump sums that push income into the higher rate band can save substantial amounts over a long retirement.
A pension drawdown pot is outside of your estate for inheritance tax purposes - it passes to your beneficiaries free of IHT. If you die before age 75, the entire remaining pot can be passed to beneficiaries completely tax-free. If you die at 75 or over, beneficiaries pay income tax at their marginal rate on withdrawals. This makes pensions exceptionally tax-efficient for intergenerational wealth transfer - many financial advisers recommend spending from ISAs and other savings before touching pension pots, preserving the pension as a tax-efficient inheritance.
This depends on your circumstances. Annuities are most suitable if: you want certainty of income for life, you are concerned about longevity risk, you are in good health (which maximises annuity value), you have limited investment knowledge or appetite, or your essential expenses exceed the guaranteed income from the State Pension. Drawdown is more suitable if: you have other guaranteed income covering essentials, you are comfortable managing investments, you want to leave the pot to beneficiaries, or you have a shorter-than-average life expectancy. The decision is not binary - a combination approach is common and often optimal.