Annuity vs drawdown: the best option for a £100k, £500k and £1m pension One offers low income for no risk but the other involves buying stocks. Which is best for you? 3 May 2021 • 5:00am Retirees have more options than ever before when it comes to how they want to spend their pension pot. But with choice comes more responsibility, and more room for error. The once-favoured annuity has fallen in popularity as rates have dropped to the extent most buyers are unlikely to get even their initial investment back. Many have favoured the more flexible option of dipping into their nest egg as and when they need the cash, known as “drawdown”. While this may work for most retirees, a guaranteed income for the rest of your life does have its merits.