👵Pension Calculator
Plan your retirement with detailed pension projections and income estimates. Calculate your future retirement income
Pension Details
Your + employer contributions
Current value of your pension pot
Historical average is 7-10%
Long-term average inflation
How to Use This Calculator
This calculator projects your pension pot at retirement based on your current contributions, expected return rate, and inflation. Enter your current age, planned retirement age, salary, and contribution percentage to see detailed projections.
The part-time work option allows you to model a gradual transition into retirement, showing how continuing to work can boost your pension pot.
The Power of Compound Interest
Compound interest is the most powerful factor in building retirement wealth. Your money earns returns, and those returns also earn returns, creating exponential growth over time.
Example: Why Starting Early Matters
If you invest £5,000/year from age 25-35 (10 years, £50,000 total), you will have more at 65 than someone who invested £5,000/year from 35-65 (30 years, £150,000 total), assuming 7% returns.
Pension Planning Tips
Start Early
The power of compound interest means starting early can dramatically increase your pension pot. Every year counts.
Maximize Employer Contributions
Contribute at least enough to get your full employer match - it is essentially free money. Many employers match contributions up to 5-6%.
Increase Contributions with Raises
When you get a raise, consider putting half of it into your pension. You will not miss money you never got used to having.
Annual Reviews
Review your pension annually. Check fees, performance, and whether your allocation still matches your risk tolerance and timeline.
Retirement Income Guidelines
Income Replacement: 70-80%
Most experts recommend replacing 70-80% of pre-retirement income. You will have fewer expenses (no pension contributions, mortgage potentially paid off), but may have higher healthcare costs.
The 4% Rule
A common guideline is that you can safely withdraw 4% of your pension annually. This means you need 25x your annual retirement expenses saved.
Asset Allocation by Age
A common rule: subtract your age from 110 to get the percentage in stocks. At 30, that is 80% stocks, 20% bonds. At 60, it would be 50% stocks, 50% bonds.
Frequently Asked Questions
How much should I contribute?
A good rule is to contribute 12-15% of your income (including employer contributions). At minimum, contribute enough to get your full employer match.
What if I start late?
It is never too late to start. Contribute more aggressively, consider delaying retirement by a few years, and consider part-time income in retirement to make up the gap.
What return rate should I use?
For long-term planning, 6-7% is a realistic estimate after inflation for a diversified stock/bond portfolio. Be conservative - better to have a pleasant surprise than fall short.
Financial Accuracy
Disclaimer: This calculator provides estimates for informational purposes only. This is not financial, tax, or legal advice. Please consult a qualified financial advisor for advice specific to your situation.