--- title: "How to Take Your Pension: Drawdown, Annuity or Lump Sum" url: https://pensionsadviceuk.com/how-to-take-your-pension/ description: "How to take your pension: drawdown, annuity or tax-free lump sum? It is one of the biggest, most irreversible decisions you will make." last_updated: 2026-10-08 publisher: "Pensions Advice UK (a trading name of GAP-GNX Ltd)" language: en-GB --- Retirement options # How To Take Your Pension: Drawdown, Annuity Or Lump Sum Deciding how to take your pension is one of the biggest financial decisions you will ever make – and for many of your options, once it is done it cannot be undone. [Speak to an adviser](https://pensionsadviceuk.com/book-a-call-with-an-adviser/) Free to enquire. We are an introducer, not an adviser. Important information - Introductions to FCA-authorised advisers - Free to enquire - We call back within the hour, 9am to 5pm weekdays - Details passed on only with your consent Last updated 8 October 2026 [How we write our guides](https://pensionsadviceuk.com/how-we-write-our-guides/) **From age 55 (rising to 57 from April 2028) you can usually start taking money from a defined contribution pension.** You can normally take up to 25% as a tax-free lump sum, and the rest is taxed as income when you draw it. The hard part is what comes next. Do you take a guaranteed income for life, keep your pot invested and draw from it flexibly, or mix the two? Each route has very different consequences for your income, your tax, and what you can leave behind – and the right answer depends entirely on your circumstances. **At Pensions Advice UK, we connect you with FCA-authorised financial advisers who can talk you through your options and recommend the approach that fits your situation.** We do not provide financial advice. We act solely as an introducer. ## Your main options at retirement - **Annuity** – exchange your pot for a guaranteed income for life. Certainty and no investment risk, but usually no flexibility once set up. Rates are at their strongest in well over a decade. - **Drawdown** – keep your pot invested and take income as you need it. Flexible, and anything left can pass to your family, but your income is not guaranteed and the pot can run down. - **Tax-free lump sum** – take up to 25% tax-free, in one go or in stages. How and when you take it can make a real difference to your tax over time. - **A blend** – many people use an annuity to cover the essentials and keep the rest in drawdown for flexibility. ## Why this decision needs care Take too much too soon and you could face an unexpected tax bill or leave yourself short later in life. Buy the wrong annuity and you may be locked into an income that does not suit you. Draw down too quickly and the pot may not last. These are not decisions to rush, and most of them cannot be reversed. A qualified adviser will look at your whole picture – your other income, your tax position, your health, and how long the money may need to last – before recommending how to take your pension. That personalised assessment is something we are unable to provide, which is why we introduce you to an authorised firm that can. [Speak To An Adviser](https://pensionsadviceuk.com/book-a-call-with-an-adviser/) Submitting your enquiry is free. Any fees for advice will be explained to you directly by the authorised firm before you proceed. NOTE: (We do not provide financial advice. We act solely as an introducer) ## Common questions ### Is drawdown better than an annuity? Neither is better in the abstract – it depends on what you need. An annuity gives certainty; drawdown gives flexibility. Many people use both. An adviser can show you what each would mean for your income. ### How much of my pension can I take tax-free? Usually up to 25% of your defined contribution pot, subject to an overall limit. When and how you take it affects your tax, so it is worth planning rather than taking it all automatically. ### Make the right choice, once. An FCA-authorised adviser can help you understand: - Whether an annuity, drawdown or a blend suits you - How to take your tax-free cash efficiently - How much income your pot can realistically support - What each option means for your family **It is free to enquire.** [Get Started Now](https://pensionsadviceuk.com/book-a-call-with-an-adviser/) ### Most of these choices can’t be undone. ### Important information Pensions Advice UK is a trading name of GAP-GNX Ltd. We are not authorised by the Financial Conduct Authority and we do not provide financial, investment, pension or tax advice. We act solely as an introducer. The information on this page is general information only. It is not a personal recommendation and should not be relied upon when making decisions about your pension. Whether any course of action is right for you depends on your individual circumstances. When you make an enquiry, we may introduce you to an FCA-authorised financial adviser. Any advice, recommendation or regulated service will be provided by that authorised firm, not by Pensions Advice UK. The authorised firm will explain its services and any fees to you directly before you decide to proceed. FCA-authorised firms may have their own criteria for accepting clients, over which we have no control. The value of pensions and investments can fall as well as rise, and you may get back less than you put in. Past performance is not a guide to future returns. Transferring or combining pensions is not right for everyone and may mean giving up valuable benefits or guarantees. Free and impartial guidance about your pension options is available from the government’s MoneyHelper service, and if you are aged 50 or over from Pension Wise, at moneyhelper.org.uk. ## Speak to an FCA-authorised adviser Tell us what you need help with and we’ll introduce you to a qualified specialist. Start your enquiry 020 3778 0939 We’re an introducer, not an adviser. ## Want to talk it through? Start online, or call us. We call back within the hour between 9am and 5pm on weekdays, or the next working day. [Start your enquiry](https://pensionsadviceuk.com/book-a-call-with-an-adviser/) [020 3778 0939](tel:+442037780939) [Call us](tel:+442037780939) [Enquire](https://pensionsadviceuk.com/book-a-call-with-an-adviser/) --- Pensions Advice UK (a trading name of GAP-GNX Ltd) connects UK residents with FCA-authorised pension advisers and pension tracing services. It is not FCA-authorised and does not give financial or tax advice. It acts solely as an introducer to FCA-authorised firms, who provide any advice and explain any fees before you proceed. This is the text version of https://pensionsadviceuk.com/how-to-take-your-pension/. More pages: https://pensionsadviceuk.com/llms.txt