Taking a flexible income: Drawdown vs Lump sums
Interested in taking a flexible income, but unsure which option to choose?
If you want to take money from your pension and you’re looking for flexibility, you may consider drawdown or taking lump sum withdrawals.
Our guide explains both options in plain English, including:
- How each option works
- The benefits and risks
- How income withdrawals are taxed
This guide is not personal advice. What you do with your pension is an important decision, which could be irreversible. Drawdown and lump sum withdrawals are higher risk options than an annuity. You should check you're making the right decision for your circumstances and that you understand your options and the risks.
The government's free and impartial Pension Wise service can help you and we can offer you advice. Income is not secure and the value of your investments can rise as well as fall so you could get back less than you invest. Tax rules can change, and their benefits depend on your circumstances.