Pensions drawdown
In this case you move your funds into a separate plan where the money is invested in the funds offered by the drawdown provider. This choice ranges from a limited number of in house funds with some companies to practically everything on the investment market with others (subject only to Inland revenue pension investment rules)
You can manage your own portfolio or select from the wide range of managed funds or fund management services available
You may take an income ranging from nothing (if you wanted the tax free cash but do not need an income yet) to a maximum defined by the government actuary. This is roughly equivalent to the level single life annuity.
You can vary this income within these limits as you wish, including the ability just to take out a lump sum from time to time.
Your future income is NOT guaranteed. You take the risk that the funds may rise or fall in value, and that in bad investment times the maximum you are allowed to take may fall as a consequence of too great a fall in the funds value. You could even run out of money completely.
Drawdown can work well, provided you accept the risks. It only runs to your age 75 by which time you must buy the annuity or convert to an alternatively secured pension ( a more tightly defined drawdown plan). At any time before you are 75, you can convert to an annuity.
It can also enable you defer decisions about a pension for the surviving partner to a later date. Perhaps protecting your income if your partner dies first.
In the event of your death, your partner inherits the whole fund. The drawdown can be continued, an annuity can be purchased by your partner using the full fund value, or the fund can be cashed in less a 35% tax charge.
If you are ill, and your condition is worsening, there may be a case for using part of the funds immediately for an enhanced terms annuity but keeping a balance in drawdown. Or for leaving it all in drawdown and maybe buying the annuity later when your condition is worse and even better terms are available.