This drawdown vs annuity calculator puts a published UK annuity income next to how long the same pot could last in drawdown. You set the pot, your age, the annuity type, a growth assumption and the yearly withdrawal. It is guidance, not a recommendation, and it does not say which option anyone should take.
Written by Phil Handley · Tax figures checked 31 July 2026 (2026/27) · Annuity rates as at September 2026 · Updated 21 October 2026
Capital at risk. The value of investments can fall as well as rise. You may get back less than you invest.
Guidance, not advice. The annuity figure is a published example, not a quote. The drawdown figure is an illustration of how long a pot could last under the assumptions shown. Nothing you enter is stored, and there is no charge to use it.
The calculator runs in your browser. The worked example is what it shows before any input is changed.
The calculator opens on a £100,000 pot at age 65, a Single life, level annuity, drawdown growth of 5% a year, and a withdrawal set equal to the annuity income. Every amount below is that published example, or the projection those settings produce.
Legal & General published £7,435 a year (£619.58 a month) from £100,000 at age 65 for this type, as at September 2026 (published 12 October 2026). Lifetime annuity with a 10-year guaranteed minimum payment period. Smoker figures assume 10 cigarettes a day. RPI rows are inflation-linked. 7.435% is that yearly income divided by £100,000: Legal & General published the pounds, not this percentage. It is Legal & General's own example, not a whole-of-market average and not a quote. A month is the annual figure divided by 12, rounded to the penny.
The full £7,435 a year is paid for 19 years. Starting at age 65, the pot falls short in year 20, the year that person is 84. At the start of that year the illustrated pot is £2,390. This is an illustration, not a forecast.
The withdrawal matches the annuity income, so both sides start from the same gross amount. Drawdown growth is 5% a year, held constant. Charges of 0.35% a year for the platform and 0.2% a year for funds come off the pot as well. In year one those charges are £550. They are this illustration's charge assumption, not a named provider's fee. Tax-free cash is not taken off first, and the withdrawal is not increased with inflation.
These are the assumptions behind the worked example, which is what the calculator shows before any input is changed. If you change an input, the notes under the result follow the figures you are looking at.
With an annuity you hand pension savings to an insurance company and it pays you an income, usually for life. With flexi-access drawdown you keep the money invested and take income from it as you choose. An annuity moves the investment risk, and the risk of living a long time, onto the insurer. In exchange you give up the capital and, generally, the ability to change your mind. Drawdown keeps the flexibility and whatever is left for your beneficiaries, and keeps both risks with you. Neither is inherently better. They are different trades.
MoneyHelper describes flexi-access drawdown as flexible retirement income. The pot stays invested, so it can fall as well as rise, and it can run out if withdrawals and poor returns outpace what is left. You can stop, restart or change the amount, and you can buy an annuity later. Platform and fund charges continue for as long as the pot is invested. How income drawdown works sets out the mechanics, and the pension drawdown calculator is the same projection this page uses, with tax and a platform's published charges added.
MoneyHelper describes a lifetime annuity as guaranteed retirement income. You exchange a sum for an income the insurer pays. Once bought, it generally cannot be changed or reversed. The income is the one agreed at purchase: level, or rising by a set percentage or with inflation if you choose that. There is no separate ongoing charge. The cost is inside the rate. What a £100,000 annuity pays explains annuities, and the published examples, in more detail.
An annuity income does not depend on markets, and a lifetime annuity continues for as long as you live, on the basis you bought. You cannot usually raise it, stop it, or take the capital back. Drawdown can be stopped, restarted or changed, and an annuity can still be bought later. You cannot usually reverse an annuity and go back into drawdown. The calculator's annuity side is the published income for life on that basis. The drawdown side is how long the pot can pay the amount you entered before it falls short.
In drawdown you keep the investment risk. The pot can fall as well as rise, and charges continue. The growth rate in the calculator is an assumption you set, not a forecast of what markets will do. With a lifetime annuity the insurer takes the investment risk. What you receive does not depend on markets after you have bought. The rate you are offered still depends on pricing when you buy, including long-term interest rates, your age and the options you choose.
With drawdown, whatever remains in the pot can pass to your beneficiaries. MoneyHelper states that where death occurs before age 75, remaining funds can typically be inherited tax-free, subject to the lump sum and death benefit allowance — £1,073,100 for most people in 2026/27. That "tax-free" refers to income tax: for deaths on or after 6 April 2027, most unused pension funds also count towards the estate for inheritance tax, as the note below explains.
A lifetime annuity normally stops paying when you die. That can be changed at the point of purchase, at the cost of a lower starting income, through a guarantee period, value protection, or a joint life basis that continues paying a proportion to a dependant. The Legal & General examples in this calculator already include a 10-year guaranteed minimum payment period, because that is the basis Legal & General published.
Finance Act 2026 changes how pensions are treated when someone dies. If the pension holder dies before 6 April 2027, the current rules apply, even if the money is paid out after that date. For deaths on or after 6 April 2027, most unused pension funds and pension death benefits will count towards the value of the estate for inheritance tax.
GOV.UK says most estates will continue to have no inheritance tax to pay after 6 April 2027. Whether an estate does depends on its total value, the allowances that apply and who inherits.
Checked 24 September 2026. Sources: GOV.UK: Inheritance Tax on unused pension funds and death benefits; GOV.UK: Technical note, Inheritance Tax on pensions; MoneyHelper: What happens to my pension when I die?.
Whichever route you take, you can usually take up to 25% of a pension tax-free. GOV.UK puts the standard cap at £268,275, and is explicit that this is the usual limit rather than an absolute one: if you hold a protected allowance, that may increase the amount of tax-free lump sums you can take.
With drawdown the tax-free element can be taken as one lump sum or spread across several withdrawals. With an annuity it is normally taken before the rest of the pot is used to buy the income. This calculator does not take tax-free cash off the pot first, so both sides start from the full amount you enter. Taking the tax-free cash would reduce both.
The other 75% is taxable as income in both cases, at your marginal rate. Annuity providers usually deduct tax through your tax code before paying you. Drawdown income is also taxed at source, and because you control the timing, withdrawals can be spread across tax years. The years-it-lasts figure does not deduct income tax from the pot. Tax changes how much you keep, not the gross amount taken out in this illustration.
You are not obliged to buy an annuity from the provider that holds your pension. MoneyHelper is direct about comparing providers rather than accepting the offer your existing provider makes, because rates differ. It is also possible to use part of a pot for an annuity and leave the rest in drawdown, or to start in drawdown and buy an annuity later. You cannot usually do the reverse. Some people cover spending they cannot do without with an annuity, and leave the rest in drawdown. That is a description of what the rules allow, not a suggestion to do it.
A lifetime annuity tends to suit a person who wants an income that lasts as long as they do, and who can give up access to the capital. Drawdown tends to suit a person who wants to change the amount they take, or to leave what remains, and who can accept that the pot can fall and can run out. People also use both. Those are descriptions of the products. They are not a view on any one person's case.
Health, other income, a partner, and what the money needs to do all change the balance. This page cannot know them, and it does not say which option to take. If you are 50 or over, Pension Wise from MoneyHelper offers an impartial government-backed appointment covering the options. For a recommendation specific to your situation, that requires regulated financial advice, which is a separate, paid service.
The same comparison, without numbers. The calculator above is where the income figures are. This table is the shape of the trade.
| Flexi-access drawdown | Lifetime annuity | |
|---|---|---|
| Who bears the investment risk | You do. The pot stays invested and can fall as well as rise. | The insurer does. What you receive does not depend on markets. |
| Who bears the longevity risk | You do. If you live longer than the pot lasts, the income stops. | The insurer does. A lifetime annuity pays for as long as you live. |
| Can you change your mind | Yes. You can stop, restart, change the amount, or buy an annuity later. | No. Once bought, an annuity generally cannot be changed or reversed. |
| Income certainty | None. What you can sustainably take depends on returns and how long you live. | Guaranteed. The basis is fixed at purchase — level, or rising by a set percentage or with inflation if you choose that. |
| Ongoing charges | Platform and fund charges continue for as long as the pot is invested. | None after purchase. Costs are built into the rate you are quoted. |
| What is left on death | Whatever remains in the pot passes to your beneficiaries. From 6 April 2027 it can count towards the estate for inheritance tax. | Nothing, unless you bought value protection, a guarantee period or joint life. |
| Effect on future contributions | Taking taxable income triggers the MPAA. | Buying a lifetime annuity does not trigger the MPAA. |
This one catches people out, so it is worth stating precisely. Once you take taxable income from a defined contribution pension, the amount you can pay into money purchase pensions each year with tax relief is capped at the £10,000 money purchase annual allowance (2026/27, GOV.UK).
For most people that is a reduction from the £60,000 annual allowance, but £60,000 is the standard figure rather than a universal one. Tapering reduces it for higher earners. The allowance also applies specifically to money purchase contributions. If you are still building up benefits in a defined benefit scheme, a separate alternative annual allowance applies to those.
Taking only the tax-free cash does not trigger it. Nor does buying a lifetime annuity. Taking taxable drawdown income does. If you are still working and paying into a pension, that difference can matter more than the income itself.
The money purchase annual allowance is not reversible. Once triggered, it applies for the rest of your life.
It compares two ways of turning a defined contribution pension into income. One side is a published annuity example: what an insurer has said a pot would buy as a lifetime income. The other is a drawdown illustration: the same pot, invested, paying a yearly amount you choose, and how long that pot could last. This page is that calculator. It is guidance, not a recommendation, and it does not say which option anyone should take.
You enter a pot, an age and an annuity type Legal & General has published, a growth assumption and a yearly withdrawal. The annuity side shows that published income. If the pot is not £100,000, the income is the published figure in proportion, rounded to the penny. The drawdown side uses the same projection as the pension drawdown calculator on this site: a level withdrawal, constant growth, and an illustrative platform and fund charge, until the pot cannot pay the full withdrawal or 40 years have passed. It is an illustration, not a forecast.
No. With the opening settings it is Legal & General's published example of £7,435 a year from £100,000 at age 65, on a single life, level basis, as at September 2026. Lifetime annuity with a 10-year guaranteed minimum payment period. Smoker figures assume 10 cigarettes a day. RPI rows are inflation-linked. It is Legal & General's own rate, not a whole-of-market average, and not a quote for you. A quote depends on health, the options chosen and the insurer. MoneyHelper says to compare providers rather than accept the offer from the pension provider you already have.
It depends on the withdrawal, the growth you assume, charges and how long you live. With the opening settings of £100,000 at age 65, a withdrawal equal to the annuity income and growth of 5% a year: The full £7,435 a year is paid for 19 years. Starting at age 65, the pot falls short in year 20, the year that person is 84. At the start of that year the illustrated pot is £2,390. This is an illustration, not a forecast. An annuity on the published basis keeps paying for life. A lower growth assumption, or a higher withdrawal, makes the pot run out sooner. Changing the inputs on the page recalculates it. The result is not a promise.
Yes. Part of a pot can buy an annuity whilst the rest stays in drawdown, and someone already in drawdown can buy an annuity later. An annuity, once bought, generally cannot be turned back into drawdown. You do not have to use the provider that currently holds the pension, and you do not have to use the whole pot. MoneyHelper makes both of those points.
With drawdown, whatever remains in the pot can pass to your beneficiaries. MoneyHelper states that where death occurs before age 75, remaining funds can typically be inherited free of income tax, subject to the lump sum and death benefit allowance — £1,073,100 for most people in 2026/27. That "tax-free" refers to income tax. For deaths on or after 6 April 2027, most unused pension funds also count towards the estate for inheritance tax. A lifetime annuity normally stops at death unless you bought a guarantee period, value protection or a joint life basis, which lowers the starting income. The Legal & General examples used here include a 10-year guaranteed minimum payment period.
Once you take taxable income from a defined contribution pension, the amount you can pay into money purchase pensions each year with tax relief is capped at the £10,000 money purchase annual allowance (2026/27, GOV.UK). For most people that is a reduction from the £60,000 annual allowance. £60,000 is the standard figure: tapering can make it lower. Taking only tax-free cash does not trigger the allowance. Buying a lifetime annuity does not. Taking taxable drawdown income does. The allowance is not reversible.
No. An annuity and drawdown are different trades. Which one fits depends on other income, health, dependants and what the money needs to do, and this page cannot know that. Pension Wise, from MoneyHelper, offers impartial guidance if you are 50 or over with a defined contribution pension. A recommendation for your own circumstances is regulated financial advice, which is a separate, paid service.
Tax figures were checked against GOV.UK and MoneyHelper on 31 July 2026. Annuity incomes are Legal & General's published examples, as at September 2026, published 12 October 2026. Nothing else on this page is a statistic.
Important: This page is general information about how pension drawdown and annuities work, including an illustration from published rates and stated assumptions. It is not financial advice and it does not recommend either option or any provider. Pension decisions are difficult to reverse — an annuity purchase generally cannot be undone, and the money purchase annual allowance cannot be untriggered. Always seek guidance from Pension Wise or advice from a qualified financial adviser before acting. Tax treatment depends on individual circumstances and may change. Compare Drawdown is operated by Arthur Browns Wealth Management Ltd (FCA No. 825843).
Free, impartial guidance: Pension Wise offers free appointments to people aged 50 or over with a defined contribution pension, and MoneyHelper’s investment pathways comparison tool compares drawdown providers’ ready-made options. Both are backed by the government.
Important: The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and benefits depend on individual circumstances. This is not financial advice.