Regular contributions are assumed to increase in line with inflation and to be paid monthly in advance.
Inflation - The calculator allows for annual investment growth of 2%, 5% or 8%. When calculating how regular contributions might increase, inflation is assumed to be 3% if investment growth is 5%. For 2% growth, inflation is 1% and for 8% growth it is 5%. When converting the final fund value and income to today’s money, inflation is always assumed to be 2% per year. These assumptions are set down by the Financial Conduct Authority for pension projections. The default setting is 5% and can be changed in advanced options.
State pension - We’ve assumed you’ll qualify for a full new State Pension. If your selected retirement age is greater than your State Pension age, we’ve assumed that you’ll defer your State Pension until your chosen retirement age. The State Pension figure we add will be increased to reflect this.
Annuity rates used are based on Financial Conduct Authority rules for the calculation of a future annuity, unless your retirement age is less than a year away when the annuity shown uses current rates from a range of providers. All annuities are assumed to be paid at the start of each payment period.
Your spouse/partner - If you’re male, your spouse/partner is assumed to be 3 years younger than you. If you’re female, your spouse/partner is assumed to be 3 years older than you. These assumptions are based on industry standards and may not reflect your circumstances.
Tax charges - This calculator assumes you can take 25% of your pension tax-free and doesn’t take account of tax charges. This includes income tax deducted from pensions in payment, or tax charges which may apply to contributions over the annual allowance or when your pension value goes over the lifetime allowance. Tax rules can change and benefits depend on personal circumstances.