What is pension drawdown?
Pension drawdown lets you take money from a defined contribution pension while the rest stays invested. You decide how much to take and when. The income is not guaranteed — the pot can be exhausted if withdrawals outrun investment returns.
Typically the tax-free element is taken first and the balance is taxed as income at your marginal rate. Large single withdrawals often trigger emergency tax, reclaimable but disruptive.
Taking taxable income flexibly triggers the money purchase annual allowance, permanently restricting future contributions and removing the ability to carry forward unused allowance. It is easy to trigger by accident.
The risk that is least intuitive is sequencing: poor returns in the early years of drawdown, combined with withdrawals, damage a pot in a way the same returns later would not. Drawdown offers flexibility and inheritability; an annuity offers certainty. Many people are better served by some of each.