What is the 52 week savings challenge?

The 52 week savings challenge is a popular method where you save an increasing amount each week - starting at £1 in week one and ending at £52 in week 52. By the end, you'll have saved £1,378.

How does the 1p challenge work?

The 1p challenge involves saving 1p on day one, 2p on day two, 3p on day three, and so on until day 365. This simple method can help you save £667.95 in a year.

Is Save Your Money app free?

Yes, Save Your Money is completely free to download and use. It offers 20+ pre-built savings challenges, daily tracking, streaks, and achievement badges at no cost.

What currencies does the app support?

Save Your Money supports multiple currencies including GBP, USD, EUR, CAD, and AUD, making it perfect for users in the UK, US, Europe, Canada, and Australia.

Can I create custom savings challenges?

Yes! While the app includes 20+ pre-built challenges like the 52 week challenge, emergency fund, and holiday fund, you can also create custom challenges tailored to your specific goals.

How do streaks work in the app?

Streaks track your consecutive daily savings logins. The longer your streak, the more motivated you stay. You'll earn badges and achievements for maintaining streaks and reaching milestones.

Income Drawdown vs. Annuity UK 2026: Which Should You Choose? | Save Your Money

When you reach retirement, you face one of the most consequential financial decisions of your life: how to convert your pension pot into retirement income. The two main options are income drawdown — staying invested and drawing income flexibly — and buying an annuity, which converts your pot into a guaranteed income for life. Since pension freedoms were introduced in 2015, many more people have chosen drawdown over annuities, but both have a role depending on your circumstances, health, other income, and risk tolerance.

How Income Drawdown Works

With income drawdown (also called flexi-access drawdown), your pension pot remains invested after retirement. You draw an income as needed — there's no minimum or maximum withdrawal requirement (unlike the old annuity rules). The remaining pot continues to grow (or fall) with investment markets. The flexibility is significant: you can vary income from year to year, take large lump sums for one-off needs, pass remaining funds to beneficiaries on death (typically tax-free before age 75), and potentially benefit from continued investment growth. The risk: if markets fall significantly at the start of retirement (sequence of returns risk), or if you live longer than expected and run out of money, drawdown can underperform an annuity. Good drawdown strategy requires ongoing investment management — either self-directed or via a financial adviser.

•Pot remains invested, income drawn flexibly
•No minimum or maximum income required
•Remaining pot passes to beneficiaries on death
•Benefits: flexibility, potential for growth, variable income
•Risks: sequence of returns risk, longevity risk, investment risk

How Annuities Work

An annuity converts your pension pot into a guaranteed income for life — or a fixed term. You exchange a lump sum with an insurance company, which pays you a monthly income regardless of how long you live. Annuity rates depend on your age, health, pot size, type of annuity, and prevailing gilt yields at purchase. In 2023–2026, annuity rates are significantly better than they were in 2015–2021, when near-zero interest rates made annuities poor value. A 65-year-old with a £100,000 pot might receive £6,000–7,000/year as a level annuity in 2026. Enhanced annuities (for people with health conditions reducing life expectancy) can pay significantly more — up to 30–40% above standard rates. Once purchased, an annuity is irrevocable — you cannot change your mind.

•Converts pot to guaranteed income for life
•Rate depends on: age, health, pot size, gilt yields
•2026 rates: significantly better than 2015–2021 (higher gilt yields)
•Enhanced annuity: higher rates for reduced life expectancy
•Irrevocable: cannot be changed once purchased

Which Is Better: The Decision Framework

The right choice depends on multiple factors. Drawdown is generally better for: people with other guaranteed income (State Pension, defined benefit pension) covering essential costs, people with good health and investment knowledge, those who want flexibility and potentially to leave money to beneficiaries, and those willing to accept investment risk. Annuity is generally better for: people with no other guaranteed income, those with health conditions that enhance their annuity rate, people who value certainty over flexibility, those with limited investment knowledge or engagement, and people who are concerned about running out of money. Many financial planners recommend a 'floor and upside' approach: buy an annuity that covers essential costs (the 'floor'), and use drawdown for the rest (the 'upside').

•Drawdown best for: guaranteed income elsewhere, flexibility valued, investment knowledge
•Annuity best for: no other guaranteed income, simplified management, certainty valued
•'Floor and upside': annuity for essentials + drawdown for extras
•Both: State Pension is already a guaranteed income element
•Get regulated financial advice: this decision warrants professional guidance

Annuity Types Available in 2026

Several annuity types are available, each with different trade-offs. Level annuity: fixed income for life, highest starting income but eroded by inflation over time. Inflation-linked (RPI/CPI) annuity: income increases with inflation each year — lower starting income but maintains purchasing power. Fixed escalation annuity: income increases by a fixed percentage (e.g., 3%/year) — a middle ground. Joint-life annuity: continues to pay a proportion (typically 50–67%) to a surviving spouse/partner. Enhanced annuity: higher rate for health conditions (diabetes, obesity, smoking, previous heart attack etc.). Guaranteed period annuity: guarantees a minimum payment period (e.g., 5–10 years) even if you die — so beneficiaries receive the remaining payments.

•Level: highest starting income, no inflation protection
•Inflation-linked: lower start, maintains purchasing power over decades
•Joint-life: continues at reduced rate to surviving partner
•Enhanced: higher rate for qualifying health conditions — always check
•Guaranteed period: minimum payment period even on early death

Frequently Asked Questions

Can I split my pot between an annuity and drawdown?+

Yes — this is a common approach. Use part of your pot to buy a guaranteed income (annuity or deferred State Pension) and keep the rest in drawdown for flexibility and growth.

What happens to my drawdown pot when I die?+

Before age 75, the remaining drawdown pot can be passed to nominated beneficiaries completely tax-free. After age 75, beneficiaries pay income tax at their marginal rate on withdrawals.

Can I buy an annuity later after starting drawdown?+

Yes — you can buy an annuity at any point using your drawdown pot. Some people defer annuity purchase to benefit from better rates at older ages.

Do I need a financial adviser for this decision?+

Pension freedoms guidance is available free from Pension Wise (MoneyHelper): 0800 138 3944. For regulated advice on which option suits your specific circumstances, an independent financial adviser is recommended.

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