Income drawdown, also known as flexi-access drawdown, allows you to flexibly manage your retirement income to meet your individual circumstances. Using this option, from age 55 onwards you are able to take up to 25 per cent of your pension pot tax-free and use the rest to generate income.
But there are several risks to taking this approach rather than buying an annuity, which provides a guaranteed income for life, the most serious being that you run out of money in old age.
A number of factors could cause this to happen: