Retirement Calculator

The Pensions and Lifetime Savings Association (PLSA) sets three retirement living standards for 2026: Minimum (£14,600/year single) covers basic needs with no car. Moderate (£31,800/year) includes a used car, one UK holiday, and some leisure. Comfortable (£43,800/year) covers two weeks abroad, a new car every 5 years, and regular dining out. Using the 4% safe withdrawal rate: a £43,800 target minus £11,962 State Pension minus any DB pension = £31,838 from private pension, requiring roughly £796,000 in your pot. Use the calculator above to see your personal number.

The full new State Pension is £230.05 per week in 2026/27 - £11,962 per year. To qualify for the full amount, you need 35 qualifying years of National Insurance contributions. You need at least 10 years to get any State Pension. You can check your personal forecast and NI record for free at gov.uk/check-state-pension. The State Pension age is currently 66, rising to 67 between 2026-2028, with further increases planned. The triple lock guarantees the State Pension rises by the highest of inflation, average earnings growth, or 2.5% each year.

The 4% rule (the 'safe withdrawal rate') suggests you can draw 4% of your pension pot annually with low risk of running out over a 30-year retirement. A £500,000 pot x 4% = £20,000/year. The rule comes from the Trinity Study which tested withdrawal rates against historical US market data. However, UK retirement researchers now suggest 3.5% may be more appropriate given lower expected future returns, longer life expectancy, and UK-specific tax rules. The calculator above uses 4% as a starting point - scroll down to see your year-by-year drawdown projection with pot depletion modelled to age 95.

The Normal Minimum Pension Age (NMPA) is 55, rising to 57 in April 2028. You can start drawing from private pensions (workplace, personal, SIPP) from this age. The State Pension is currently payable at 66, rising to 67 between 2026-2028. Importantly, you can access your workplace/personal pension before receiving your State Pension - many people work part-time while drawing pension income. Accessing your pension before NMPA incurs a 55% tax penalty. Pension liberation scams target this - avoid any scheme promising early access.

Using the 4% rule, a pension pot should last 30+ years in most market conditions. However, your actual mileage depends on withdrawal rate, investment returns, and sequence-of-returns risk (poor market performance early in retirement is the biggest threat). Our calculator now shows a year-by-year drawdown projection from your retirement age to 95 - including estimated tax on withdrawals and pot depletion tracking. You'll see exactly when your pot might run out at your chosen withdrawal rate. For longer retirements or conservative planning, consider a 3-3.5% withdrawal rate.

A rough rule: take the age you start contributing, halve it - that's your target total contribution percentage (employer + employee). Starting at 30? Aim for 15%. Starting at 40? Aim for 20%. At minimum, get your full employer match - that's free money. Auto-enrolment minimum is 8% total (5% employee, 3% employer) on qualifying earnings, but this is insufficient for most people. Use the calculator above to see how increasing your monthly contribution changes your projected retirement income.

Using the 4% rule: £500,000 provides £20,000/year in private pension income. Add £11,962 State Pension (from 67) = £31,962/year total from State Pension age. With £500K at 60: if you take 25% tax-free (£125,000) and draw 4% from the remaining £375,000, you'd have £15,000/year until State Pension kicks in at 67, then £26,962/year. This puts you at Moderate lifestyle level. The gap years between 60-67 when you're drawing without State Pension are the hardest - our calculator models this year by year.

Drawdown keeps your money invested and you withdraw flexibly - you control the income, your pot can keep growing, and it passes to beneficiaries. Annuity converts your pot into a guaranteed lifetime income - predictable but rigid, with poor value at current rates. Most people now use drawdown for flexibility. A hybrid approach is common: buy an annuity to cover essential bills, keep the rest in drawdown for discretionary spending. Our calculator models drawdown - it assumes the 4% rule and shows year-by-year projections. For annuity guidance, speak to a regulated financial adviser.

Pension income is taxed as regular income. You get the first 25% of each withdrawal tax-free (up to £268,275 lifetime). The remaining 75% is taxed at your marginal rate: 0% up to Personal Allowance (£12,570), 20% up to £50,270, 40% up to £125,140, and 45% above. Tax is only due on the taxable portion. State Pension also counts toward your taxable income. Our calculator now estimates tax on each year's withdrawal - see the Tax column in the drawdown projection table. If total income stays within the Personal Allowance, you pay no tax at all on your pension.

Pensions sit outside your estate for inheritance tax - a major advantage. Defined contribution: you nominate beneficiaries who receive the full pot. Die before 75: beneficiaries receive it tax-free. Die at 75+: beneficiaries pay income tax on withdrawals at their rate. Defined benefit: usually pays a spouse's pension (typically 50%). State Pension: your spouse may inherit some if they have insufficient NI contributions. Always keep nomination forms updated - pension providers don't follow your will for pension death benefits.

Consolidating can simplify management, reduce fees, and give a clearer retirement picture. Use the free Pension Tracing Service (gov.uk) to find lost pensions. Before transferring: check for valuable guarantees (defined benefit, guaranteed annuity rates, protected pension age of 55), compare fees, and check for exit penalties. Never transfer a DB pension without regulated financial advice - guaranteed income often exceeds transfer value. For modern DC pots, consolidation usually makes sense if the new platform has lower fees.