The default 5% growth rate assumes a broad global equity tracker fund (e.g. FTSE Global All Cap or MSCI World). This is a nominal return before inflation. Actual returns will vary and are not guaranteed.
Inflation is modelled at a fixed 2.5% per year. Real inflation may be higher or lower.
State pension is shown at the current full rate of £11,500/yr, projected forward at 2.5% inflation (triple lock). This assumes no real-terms growth. Your entitlement depends on your National Insurance record and may change.
Drawdown uses a fixed 4% withdrawal rate (the "4% rule"). This is a common guideline, not a guarantee of sustainable income.
Annuity rates shown are illustrative (5% pension, 4% ISA/LISA, 3% Cash ISA/Cash LISA/Bonds). Actual annuity quotes depend on age, health, and market conditions at the time of purchase.
Lifetime ISAs (LISAs) include a 25% government bonus on contributions up to £4,000/yr (max £1,000 bonus/yr). Contributions are capped at £4,000/yr and the bonus stops at age 50. Withdrawals before age 60 (except for a first home) incur a 25% penalty — this is not modelled here.
Premium Bonds use the NS&I prize fund rate as an expected return. Actual returns are probabilistic and may differ significantly, especially for smaller holdings.
Defined benefit pensions provide guaranteed income based on salary and years of service. The income figure shown is what you enter — check your annual benefit statement for your projected amount.
The 25% tax-free pension lump sum reduces your remaining pot and therefore your drawdown income. The lump sum is taken at retirement — in practice, you may take it in stages.
Tax estimates use 2024/25 income tax bands and CGT rates. They assume no other income in retirement. Personal allowance taper above £100k is modelled. Actual tax depends on your full circumstances — seek professional advice.
GIA (General Investment Account) withdrawals are subject to Capital Gains Tax on the gains portion. The CGT annual allowance (£3,000) and higher rate (20%) are used as a conservative estimate.
Annuity income shown is level (non-escalating) — it is fixed at purchase and loses buying power to inflation every year. Drawdown income can grow because your pot stays invested. Year-1 comparisons alone are misleading.
In couple mode, each person's income is taxed independently using their own personal allowance and tax bands.
PLSA Retirement Living Standards benchmarks (Minimum, Moderate, Comfortable) are used as reference points and updated periodically by the Pensions and Lifetime Savings Association.
This tool is for illustration only and does not constitute financial advice. Consider consulting a qualified financial adviser.
Your data stays private. All calculations run in your browser. Nothing is sent to any server. Your settings are saved in your browser's local storage only.