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 could be a regular amount or can be taken as and when you need it.

Drawdown carries higher risks because the money remaining in your pot stays invested, meaning it's value can go down as well as up. However, it offers greater flexibility. Your drawdown pot could run out during your lifetime, so it needs ongoing management. Learn more about the difference between drawdown and an annuity.