Drawdown (flexi-access drawdown)
Taking income from your pension pot while keeping it invested, giving you flexibility over how much you withdraw and when.
Drawdown replaced the old capped drawdown system after the 2015 pension freedoms. You can take as much or as little as you like from your pot each year — there's no maximum or minimum. The pot stays invested, so it can continue growing (or shrinking) while you draw from it.
The main risk is running out of money. The '4% rule' suggests withdrawing 4% of your pot in year one, adjusted for inflation, gives a high probability of lasting 30 years. But poor returns early in retirement (sequence-of-returns risk) can deplete the pot faster than expected. Drawdown income is taxed as earned income at your marginal rate. Taking flexible income triggers the MPAA, reducing future contribution limits to £10,000.
This calculator provides estimates based on 2025/26 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.