How the projection works
The calculator projects your pension pot using compound growth on your existing savings plus the future value of ongoing contributions — both yours and your employer's. The growth rate you enter is applied annually to the total pot. In practice, pension funds invest in a mix of equities, bonds, and other assets, so actual returns will vary year by year. The projection shows one possible path at a constant assumed rate, not a guarantee.
The real-terms figure (adjusted for inflation) is more useful for retirement planning than the nominal figure. If your pot projects to £400,000 in 30 years but inflation averages 3%, that £400,000 has the spending power of around £165,000 in today's money. The calculator shows both figures so you can assess whether your projected retirement income genuinely meets your needs in today's terms.
The 4% drawdown rule: The monthly income figure uses a 4% annual withdrawal rate — meaning you draw 4% of your pot each year, divided by 12 for monthly income. This is based on research suggesting a 4% withdrawal rate has historically sustained a portfolio for 30+ years. For early retirement or cautious planning, 3–3.5% is safer. The rule is a starting framework, not a precise science.
Why employer contributions matter more than most people realise
Auto-enrolment minimum employer contributions are 3% of qualifying earnings — but many employers match more if you contribute more, up to their cap. Not contributing enough to claim your full employer match is, in the most literal sense, turning down part of your salary. If your employer matches up to 5% and you only contribute 3%, you are leaving 2% of your salary — potentially £500–£1,500 per year — unclaimed.
Over a 30-year career, that unclaimed employer contribution — even at modest growth — can compound to a substantial sum. The calculator includes employer contributions in the projection. If you are unsure what your employer matches, check your employment contract or HR portal — most employers publish this clearly and it is one of the most valuable benefits available.
Salary sacrifice and employer NI savings: Many employers pass some or all of their National Insurance saving back to employees when pension contributions are made via salary sacrifice. Your employer saves 15% NI on the sacrificed amount — some add this to your pension contribution. It is worth asking your payroll team whether your employer does this.
The State Pension and how it fits in
The full new State Pension in 2026/27 is £12,548 per year (£1,045.67 per month). This is only payable from State Pension age — currently 66, rising to 67 by 2028 and likely to 68 by the mid-2040s. To receive the full amount you need 35 qualifying National Insurance years. With fewer than 10 NI years you receive nothing; between 10 and 34 years you receive a proportional amount.
The State Pension is index-linked via the triple lock, which guarantees it rises each April by the highest of inflation (CPI), average earnings growth, or 2.5%. This makes it highly valuable in real terms — more so than an equivalent private pension pot from which you must draw income. You can check your NI record and State Pension forecast at gov.uk/check-state-pension, which takes around five minutes and is worth doing at any age.
⚠️ Career gaps — parental leave, caring responsibilities, periods of self-employment without voluntary NI contributions, or time abroad — can reduce your State Pension. You can pay voluntary Class 3 NI contributions (currently £985 per year in 2026/27) to fill gaps for years going back to 2006. Each year purchased adds roughly £358/year to your State Pension — a payback period of under three years if you live to average life expectancy.
Defined contribution vs defined benefit pensions
This calculator is designed for defined contribution (DC) pensions — the type where you and your employer build up a pot that is invested and drawn down in retirement. Most private sector workers and many newer public sector workers have DC pensions. The final income depends on how much you contribute, how long you invest, and investment returns.
Defined benefit (DB) or final salary pensions work differently. They pay a guaranteed income for life based on years of service and salary, regardless of investment returns. If you work in the NHS, teaching, civil service, or local government, you likely have a DB pension. The projected income from a DB scheme will be shown on your annual pension statement — it cannot be modelled using this calculator. For DB pensions, the key question is not pot size but the annual income guaranteed at retirement.
When can you access your pension?
The minimum pension access age is currently 55, rising to 57 in 2028. This applies to private and workplace defined contribution pensions. The State Pension is separate and payable from State Pension age (currently 66). You can take up to 25% of your private pension pot as a tax-free lump sum from age 57 (subject to the £268,275 lifetime limit on the tax-free element). The remainder is drawn as income and taxed as earnings in the year it is received.
Drawing too much pension income in a single tax year can push you into a higher tax band — particularly relevant if you also have other income. Many retirees choose to draw pension income gradually to stay within the basic rate band, supplementing with ISA withdrawals (which are tax-free) in higher-spending years. This tax planning in drawdown is where the structure of your retirement savings matters as much as the total size.
Frequently Asked Questions
How much should I be paying into my pension?
A common rule of thumb is to take your age when you start contributing and halve it — that gives the percentage of salary to contribute. Starting at 30 means aiming for 15% (including employer contributions). But the more useful question is: what monthly income do I want in retirement, and am I on track? Enter a target monthly income in the calculator and it will show you whether your current contributions are sufficient and by how much you may need to increase them. The earlier you start, the smaller each monthly contribution needs to be.
What happens to my pension if I change jobs?
Your existing pension pot belongs to you — it does not revert to your employer when you leave. It stays invested in your previous employer's workplace pension scheme and continues to grow until you access it or transfer it. You can consolidate old pensions into your new employer's scheme or into a personal pension (SIPP) — which can simplify management and may reduce fees. Before transferring, check for any valuable features (such as guaranteed annuity rates) in older policies that would be lost on transfer. Consolidation is usually straightforward for standard DC workplace pensions.
Is it better to pay into a pension or an ISA?
For most employed people with access to employer matching, pension contributions win clearly — free employer money and tax relief together are very hard to beat. For those without employer matching or who are self-employed, the comparison is closer. Pensions provide upfront tax relief (20% for basic rate, 40% for higher rate taxpayers) but are locked until age 57. ISAs offer no upfront relief but the money is accessible at any time and withdrawals are completely tax-free. Many people use both: pension for long-term retirement income (taking advantage of employer matching and tax relief), ISA for accessible savings and to bridge the gap to pension access age if retiring early.
What growth rate should I use in the projection?
A real return (after inflation) of 3–5% is a reasonable planning assumption for a diversified pension invested in global equities over the long term. If you use a nominal growth rate, set inflation separately to strip out purchasing power erosion. The calculator defaults to 6% nominal growth and 3% inflation, giving approximately 3% real return. More aggressive assumptions (7–8% nominal) are defensible for young investors with a long horizon and equity-heavy portfolios. More conservative assumptions (4–5% nominal) suit those closer to retirement or with bond-heavy portfolios. Whatever rate you use, the real-terms projection is the number to focus on.
Can I contribute to a pension if I am self-employed?
Yes — self-employed people can contribute to a personal pension or SIPP (Self-Invested Personal Pension) and receive the same income tax relief as employees. You do not receive employer contributions, but you can contribute up to £60,000 per year (the annual allowance) or 100% of your earnings if lower, and claim full tax relief. Higher-rate self-employed taxpayers claim the additional relief through their Self Assessment tax return. SIPPs also give greater investment choice than most workplace pensions, including individual shares, ETFs, and investment trusts.
Frequently asked questions
How much should I have in my pension by age?
A widely used benchmark is 10× your final salary by retirement. At 30, aim for 1× salary; at 40, 3×; at 50, 6×. Your actual target depends on desired retirement income, State Pension entitlement, and other assets.
What is a good pension contribution rate in the UK?
Total contributions of 12–15% of salary are widely recommended. The legal minimum is 8% (3% employer + 5% employee). Higher earners, late starters, or those with ambitious retirement targets should aim for 15–20%+.
At what age can I access my pension in the UK?
The minimum pension access age is currently 55, rising to 57 in 2028. The State Pension is payable from age 66, rising to 67 between 2026–2028.
How does the pension annual allowance work?
In 2025/26 you can contribute up to £60,000 per year to pensions (or 100% of earnings, whichever is lower). High earners above £260,000 adjusted income have a tapered allowance reducing to £10,000 minimum.