Pension Drawdown Calculator
Calculate how long your pension pot will last with a given annual withdrawal, or find the maximum sustainable drawdown amount.
Reviewed by Richard Ross · Last updated April 2026
How Pension Drawdown Calculator works
Drawdown calculation
Duration: months = −ln(1 − r × PV ÷ PMT) ÷ ln(1 + r). Maximum withdrawal: PMT = PV × r ÷ [1 − (1 + r)^(−n)]. Both use the monthly rate (annual rate ÷ 12). If withdrawal ≤ monthly interest on the pot, the pot lasts indefinitely.
Sequence of returns risk
This calculator assumes a constant growth rate. In reality, investment returns vary year to year. Sequence of returns risk means that poor returns in early retirement can deplete a pot much faster than average returns suggest — even if long-run average returns are the same.
Sustainable withdrawal rates
The 4% rule is a widely used benchmark for a 30-year retirement. A 3.3% rate is sometimes used for a 40-year retirement. In low-return environments, some researchers suggest 3–3.5% is safer. Your age at retirement, asset allocation, and flexibility to reduce withdrawals all affect the sustainable rate.
HMRC rules and the Money Purchase Annual Allowance (MPAA)
Once you enter flexi-access drawdown and take any income beyond the 25% tax-free entitlement, the Money Purchase Annual Allowance (MPAA) of £10,000 applies to all future defined contribution pension contributions. This means you can no longer contribute up to £60,000/year to a defined contribution pension — only £10,000. If you are still working and want to continue saving into a pension, consider taking only tax-free cash and leaving the rest uncrystallised for as long as possible to avoid triggering the MPAA.
Drawdown and inheritance
Uncrystallised or drawdown pension funds can be passed on to beneficiaries free of inheritance tax (IHT) in most cases. From April 2027, unspent pension pots are expected to be brought back into the IHT estate under proposed rule changes, though this remains subject to consultation. If you die before age 75, beneficiaries can usually draw down or take a lump sum tax-free. If you die aged 75 or over, withdrawals by beneficiaries are taxed at their marginal income tax rate. Keeping money inside the pension wrapper can be an effective estate planning tool.
Inheritance tax calculator →Source: FCA — Pension drawdown rules (fca.org.uk). HMRC — Pension flexibility (gov.uk/tax-on-your-private-pension). MoneyHelper — Pension drawdown (moneyhelper.org.uk).
Frequently asked questions
How long will £300,000 last in drawdown?
At 5% growth and £18,000/year withdrawal: approximately 36 years. At £24,000/year: approximately 22 years. At 5% growth and £15,000/year withdrawal (5%): the pot grows and lasts indefinitely.
What is flexible drawdown?
Flexible drawdown (flexi-access drawdown) allows you to take any amount from your pension at any time (not just the 25% tax-free, but any amount). Once you access flexible drawdown, the Money Purchase Annual Allowance (MPAA) of £10,000 applies to future pension contributions.
Should I take drawdown or an annuity?
Drawdown offers flexibility and upside potential; annuities offer certainty. A blended approach — using an annuity to cover essential income and drawdown for discretionary spending — is common. Your health, other income, and risk tolerance are key factors. Seek independent advice.
What is the tax treatment of drawdown withdrawals?
Each withdrawal from a crystallised drawdown fund is taxed as income: 25% of each withdrawal can be taken tax-free (up to the lump sum allowance of £268,275 across all pensions), and 75% is taxable at your marginal rate. Alternatively, you can take all the 25% tax-free cash upfront as a PCLS when first accessing the pension, after which all drawdown is fully taxable.
What happens to my drawdown pot when I die?
Pension drawdown funds typically fall outside your estate for inheritance tax purposes (though this is changing from April 2027 under proposed legislation). If you die before 75, beneficiaries can receive the remaining pot tax-free. If you die at 75 or older, they pay income tax at their marginal rate on withdrawals. You should nominate beneficiaries with your pension provider — they are not covered by your will.
Inheritance tax calculator →What happens to my drawdown pension when I die?
Unspent drawdown funds can be passed to your beneficiaries. If you die before age 75, the funds can usually be inherited tax-free as a lump sum or drawdown. If you die at or after 75, the inherited funds are taxed as income at the beneficiary's marginal rate. Crucially, from April 2027, unspent pension pots will be included in your estate for inheritance tax purposes — a major change to pension estate planning.
What is sequence of returns risk in drawdown?
Sequence of returns risk is the danger that poor investment returns in the early years of drawdown permanently damage your pot, even if average returns over the full period are good. Withdrawing a fixed amount during a market downturn forces you to sell more units at lower prices — depleting the pot faster. Strategies to manage this include holding a cash buffer of 1-3 years of income, flexible withdrawal levels, or a drawdown-annuity hybrid approach.
Is flexi-access drawdown right for everyone?
Not necessarily. Drawdown requires investment knowledge, discipline, and the willingness to manage variable income. It suits people with other stable income sources (State Pension, defined benefit), significant pot sizes, and a higher risk tolerance. For those who want simplicity and guaranteed income, an annuity — or a hybrid of annuity and drawdown — may be more appropriate. Many advisers recommend using some pension to buy an annuity to cover essential expenses, with the remainder in drawdown.
How do drawdown charges affect my pot?
Platform and fund charges in drawdown typically range from 0.25% to 1.5% per year of the pot value, plus any adviser fees. On a £400,000 pot, 1% total charges costs £4,000/year — a significant drag on growth. Reducing charges from 1.5% to 0.5% could add approximately £50,000-£80,000 to the pot over 20 years on a £400,000 pot at 5% gross growth. Compare platforms carefully, particularly once the pot exceeds £100,000.
Can I take drawdown and buy an annuity later?
Yes — you can convert some or all of your drawdown pot into an annuity at any point. Many people enter drawdown in their 60s with the intention of buying an annuity in their late 70s or 80s when annuity rates improve (due to shorter life expectancy) and they want less investment risk. This phased approach gives flexibility early in retirement while securing guaranteed income later.
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This calculator provides estimates for informational purposes only. It is not a substitute for personalised pension or financial advice. Speak to a regulated financial adviser before making pension decisions.