Breakdown
How it works
You can take 25% tax-free (up to £268,275) and draw the rest as taxable income when you like. The pot stays invested, so it can grow — or fall. Drawing more than the pot's real return depletes it; the calculator shows the age at which it is exhausted at your chosen income.
Formula
Worked example
£400,000 pot at 60: £100,000 tax-free, £300,000 in drawdown. £24,000 a year rising 2.5% at 4.5% growth lasts to about age 75; with £12,548 State Pension from 67 total taxable income £36,548 → tax £4,796.
Frequently asked questions
What is the MPAA?
Once you take taxable income from drawdown, future pension contributions are capped at £10,000 a year (Money Purchase Annual Allowance). Taking only the tax-free cash does not trigger it.
Drawdown or annuity?
Drawdown is flexible and inheritable but carries investment and longevity risk; an annuity is guaranteed. Many combine both — see the annuity vs drawdown calculator.
Is the tax-free cash always 25%?
Up to 25% of the pot, capped at £268,275 (the Lump Sum Allowance), unless you have protected higher amounts.