Pension Drawdown Sustainability Calculator 2026
Calculate how long your pension drawdown pot will last at different withdrawal rates. Find a sustainable withdrawal rate accounting for investment growth and inflation.
Pension Drawdown Pot Sustainability Calculator
How long will your pension pot last in drawdown? This depends on the size of the pot, annual withdrawal amount, investment growth, and inflation.
Frequently Asked Questions
What is pension drawdown?
Pension drawdown (flexi-access drawdown) is when you move your pension pot into a drawdown fund and take withdrawals as and when needed, while the remainder stays invested. Unlike an annuity, there is no guaranteed income — your pot can run out if withdrawn too fast or investments underperform.
What is a safe withdrawal rate for pension drawdown?
The famous '4% rule' (based on US research) suggests 4% of initial pot per year is sustainable for 30 years. However, UK research suggests 3-3.5% is safer given lower equity returns historically. At 3.5%, a £400,000 pot = £14,000/year.
What happens if my drawdown pot runs out?
If your pension pot runs out, you lose the drawdown income. You may still have State Pension and any annuity income. Planning for this risk (longevity risk) is crucial — consider blending drawdown with an annuity for income security.
Can I buy an annuity after starting drawdown?
Yes — you can use all or part of your remaining drawdown pot to buy an annuity at any age. This is called 'annuity blending'. As you age, annuity rates improve because life expectancy decreases.
Does sequence-of-returns risk affect drawdown?
Yes — sequence of returns risk means that poor investment returns early in retirement (while you are taking large withdrawals) can dramatically reduce your pot and long-term income, even if average returns are acceptable. This is why many advisers recommend lower equity allocations at the start of drawdown.
What charges affect pension drawdown?
Platform charges (0.1-0.45%/year), fund charges (0.1-1%+/year), and adviser charges (typically 0.5-1%/year for ongoing advice). Total charges of 1.5-2%/year significantly reduce a pot over 20+ years. A 1% extra charge could reduce a pot by 20% over 30 years.
How is drawdown income taxed?
Drawdown withdrawals are taxed as earned income via PAYE. Your personal allowance (£12,570) applies. Tax-free cash (PCLS) is separate from drawdown income. Careful planning of withdrawal timing can reduce tax — spreading withdrawals across tax years to stay in lower bands.
Should I use guaranteed drawdown or variable drawdown?
Variable (unguaranteed) drawdown is flexible and can be invested for growth, but has longevity risk. Guaranteed drawdown products provide an income floor but typically with higher charges and lower flexibility. Most people use variable drawdown with sufficient diversification.