Rates & sources
Compound growth assumes reinvested returns and no platform fees. Past performance is not a guide to future returns.
Source: FCA — Investment basics — figures refreshed at the start of each tax year.
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When to use this calculator
- Before choosing between saving, investing, or increasing your monthly contribution.
- When you want to compare best-case, base-case, and cautious return assumptions.
- When you need a quick projection before making a longer-term portfolio decision.
- When you are deciding how many more years of contributions are needed to reach a specific target balance.
- When you want to see whether starting earlier versus contributing more each month produces a bigger outcome.
A realistic UK planning example
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Total Pension Pot (£)
250000
Annual Withdrawal (£)
15000
Expected Annual Growth (%)
5%
Your Current Age
35
After entering these figures, review tax-free lump sum, pot lasts (years) and pot value at age 80 together rather than in isolation — each metric tells a different part of the story. Then rerun the tool with one input adjusted to see which variable has the biggest effect on all three outputs before you settle on a plan.
How to read your results
Tax-Free Lump Sum
Review this figure alongside your gross income so you can understand the true cost of deductions and plan around any thresholds before the tax year closes. If the figure looks higher than expected, check whether any pension or gift-aid contributions could reduce your taxable income.
Pot Lasts (years)
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Pot Value at Age 80
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Sustainable Annual Income
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Method & assumptionsAuthoritative sources
This calculator models pension flexi-access drawdown using a simple annual compounding approach. Each year, the remaining pot grows by the assumed annual rate, then the annual withdrawal is deducted. This process repeats until the pot reaches zero or 60 years have passed, whichever comes first. The tax-free lump sum is calculated as 25% of your total pot, subject to the 2024/25 cap of £268,275, reflecting the changes introduced after the abolition of the lifetime allowance. Pot values at age 80 and 90 are captured mid-simulation to give meaningful waypoints for longevity planning. The sustainable annual income figure represents the amount your pot could theoretically generate in year one of growth, offering a rough indication of a withdrawal rate that would avoid eroding the capital base.
This model assumes a constant annual withdrawal and a constant growth rate throughout, which is a simplification — real drawdown portfolios experience volatile returns and may apply different rates at different life stages. The model does not account for the MPAA, income tax on withdrawals, adviser charges, platform fees, or the impact of inflation on purchasing power. It should be used as an indicative planning tool rather than a definitive financial projection. For personalised drawdown modelling that accounts for your full financial picture and tax position, consult a regulated financial adviser authorised by the Financial Conduct Authority.
Common mistakes
- !Assuming a constant return without checking a more conservative growth rate.
- !Forgetting to include ongoing contributions, fees, or tax wrappers where relevant.
- !Focusing only on the final balance instead of the path required to reach it.
- !Ignoring the drag of platform fees or fund charges, which can reduce the real compounded return significantly over ten or more years.
- !Comparing ISA and general investment account projections without adjusting for the tax treatment of interest, dividends, or capital gains.
What to do next
- Test a cautious, expected, and optimistic growth rate instead of relying on a single projection.
- Compare this result with related savings or retirement tools before committing more money.
- Use the linked guides to understand which assumptions matter most over longer periods.
- Consider running the same figures in an ISA and a general account scenario to see how the tax treatment changes the outcome over ten or more years.
- If the projected balance falls short of your target, use the tool to work backwards — increase the monthly contribution until the result meets your goal.
Frequently asked
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End-of-article next steps
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