Question 1

What growth rate should I use?

Accepted Answer

A common assumption for a diversified pension fund is 5% per year before charges. After charges (typically 0.5% to 1.5%), a net growth rate of 4% to 5% is reasonable for long-term planning. Conservative investors might use 3%, while those with a higher equity allocation might use 6%. Past performance does not guarantee future returns.

Question 2

How does the State Pension work in 2026/27?

Accepted Answer

The full new State Pension is £230.25 per week (£11,973 per year) for 2026/27. You need 35 qualifying years of National Insurance contributions to get the full amount, and at least 10 years to get anything. The State Pension age is currently 67, rising to 68 between 2044 and 2046 for those born after April 1977.

Question 3

What is the 4% withdrawal rule?

Accepted Answer

The 4% rule is a guideline suggesting you can withdraw 4% of your pension pot in the first year of retirement, then adjust for inflation each year, with a reasonable expectation of not running out of money over 30 years. It is based on historical data and is a starting point, not a guarantee. Many UK advisers suggest 3.5% to be more conservative.

Question 4

Should I include my employer's contribution?

Accepted Answer

Yes. Under auto-enrolment, the minimum employer contribution is 3% of qualifying earnings. Many employers offer more generous matching schemes. Include their contribution in the employer match field to get an accurate projection.

Question 5

What about tax relief on pension contributions?

Accepted Answer

When you contribute to a pension, you receive tax relief at your marginal rate. Basic rate (20%) relief is usually added automatically. Higher rate (40%) and additional rate (45%) taxpayers can claim extra relief through their tax return. This calculator assumes your monthly contribution is the amount going into your pot after tax relief has been applied.

Question 6

What is the tax-free lump sum?

Accepted Answer

You can usually take up to 25% of your pension pot as a tax-free lump sum from age 55 (rising to 57 from 2028). The maximum tax-free lump sum is currently capped at £268,275. The remaining 75% is subject to income tax when you draw it down.

Question 7

Has the Lifetime Allowance been abolished?

Accepted Answer

Yes. The Lifetime Allowance (LTA) was abolished from 6 April 2024. There is no longer a limit on how much you can accumulate in your pension pot. However, the annual allowance (currently £60,000 for most people) still limits how much you can contribute each year with tax relief.

Source	Monthly	Annual
Private Pension Drawdown (4% rule)	£2,183	£26,201
State Pension(35/35 years)	£998	£11,973
Total Retirement Income	£3,181	£38,174

Age	Year	Start Balance	Contributions	Growth	End Balance
36	2027	£50,000	£5,400	£2,635	£58,035
37	2028	£58,035	£5,400	£3,037	£66,472
38	2029	£66,472	£5,400	£3,459	£75,330
39	2030	£75,330	£5,400	£3,902	£84,632
40	2031	£84,632	£5,400	£4,367	£94,398
41	2032	£94,398	£5,400	£4,855	£104,653
42	2033	£104,653	£5,400	£5,368	£115,421
43	2034	£115,421	£5,400	£5,906	£126,727
44	2035	£126,727	£5,400	£6,471	£138,598
45	2036	£138,598	£5,400	£7,065	£151,063
46	2037	£151,063	£5,400	£7,688	£164,152
47	2038	£164,152	£5,400	£8,343	£177,894
48	2039	£177,894	£5,400	£9,030	£192,324
49	2040	£192,324	£5,400	£9,751	£207,475
50	2041	£207,475	£5,400	£10,509	£223,384
51	2042	£223,384	£5,400	£11,304	£240,088
52	2043	£240,088	£5,400	£12,139	£257,627
53	2044	£257,627	£5,400	£13,016	£276,044
54	2045	£276,044	£5,400	£13,937	£295,381
55	2046	£295,381	£5,400	£14,904	£315,685
56	2047	£315,685	£5,400	£15,919	£337,004
57	2048	£337,004	£5,400	£16,985	£359,389
58	2049	£359,389	£5,400	£18,104	£382,894
59	2050	£382,894	£5,400	£19,280	£407,574
60	2051	£407,574	£5,400	£20,514	£433,487
61	2052	£433,487	£5,400	£21,809	£460,697
62	2053	£460,697	£5,400	£23,170	£489,266
63	2054	£489,266	£5,400	£24,598	£519,265
64	2055	£519,265	£5,400	£26,098	£550,763
65	2056	£550,763	£5,400	£27,673	£583,836
66	2057	£583,836	£5,400	£29,327	£618,563
67	2058	£618,563	£5,400	£31,063	£655,026

Retirement Calculator

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Understanding Your UK Retirement Plan

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