How does drawdown work? 

Your pension fund remains invested, an annuity is not purchased. The value of the pension continues to rise and fall as it may have done before drawdown commenced.

Within prescribed limits, you can take an income (monthly, quarterly, annually). This comes directly from your pension. For example, if your pension was worth £100,000 and you take £5,000 of income then your pension will be worth £95,000 following the 'drawdown' of income. In reality, the pension could be worth more than £95,000 (if it had grown in value) or less than £95,000 (if it had fallen in value).

Deferring Annuity Purchase

 One of the benefits of purchasing an annuity is something called mortality cross subsidy. In deferring an annuity you