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Drawdown calculator

With drawdown you take income directly from the pension fund, which stays invested. Use this simple calculator to help you decide what income withdrawals might be sustainable, and when you might run out of money. We've made some assumptions on the growth rates but you should customise these to meet your own expectations and intended investment strategies.

Important information: What you do with your pension is an important decision that you may not be able to change. You should check you're making the right decision for your circumstances and that you understand your options and the risks. Drawdown is a higher risk option than an annuity. The government's free and impartial Pension Wise service can help you and we can offer you advice. The information on our website is not personal advice.

Your details

0% 25%
Please confirm the value of the pensions you are thinking of using for drawdown.
You have the option of taking an initial taxable lump sum from the pension. This will be subject to income tax.
The maximum tax-free cash you can take is usually 25%. You can decide how much to take.
Unless you are already in capped drawdown, there is no limit to how much income you can take. This income will be subject to income tax.
Change this percentage to see how different rates of growth will affect your pension. See the notes in the 'Important information' box for important information. A 1% investment charge will also be deducted.
Change this age to see how the age you might die could affect your pension. See the notes in the ‘Important information’ box for important information.
The red line shows the investment growth percentage you have chosen. The other two lines show the effects of the growth being 3% higher (the green line) or 3% lower (the purple line).
The blue line shows the total tax-free cash and income (before tax) withdrawn over time.

Important information

For these calculations we've made some initial assumptions about your net investment growth and life expectancy. You should customise these assumptions to your own personal circumstances using the sliders. The assumptions we have made do not constitute personal advice and are not based on your circumstances. They are simply a starting point for your retirement decisions. Making decisions based on unrealistic assumptions will increase the risk of running out of money.

We have assumed investment growth of 5% with charges of 1% (i.e. 4% growth after charges). 5% is the mid-growth rate suggested by the FCA for pension illustrations. 1% is a typical investment charge.

It is important to remember that your investments will fluctuate in value (rather than growing by a steady percentage each year as shown in this calculator). There are likely to be times when your investments fall in value. Selling investments after they have fallen in value may lead to your fund being depleted rapidly (particularly if this happens early on).

We have assumed your fund is fully invested. You may wish to hold some cash on your account (perhaps to fund planned withdrawals without needing to sell investments).

We have assumed life expectancy based on age, gender and date of birth. Life expectancy source: 2016-based UK Cohort Expectation of Life, Office for National Statistics. Chance of living to age 100 source: DWP Number of Future Centenarians by Age Group - April 2011. You might wish to make provision for your retirement income to continue to provide for you if you live longer than you might expect.

These results do not take into account the effects of inflation, which can reduce the buying power of your income.

Please remember investment growth may be higher or lower than assumed. You may also live longer or for less time than you expect.

What income might you take?

How much income you take is entirely down to you.

One income withdrawal strategy is to take only the income generated by the underlying investments. This would leave the underlying capital intact to hopefully grow, although its value could fall. Taking income in this way is called drawing the 'natural yield'.

The natural yield for the UK stock market is currently around 3.8%*. This yield is historic and will vary in future; it is not guaranteed and not a reliable indicator of future performance. This is provided to help you make your own decisions on what income to take, but you need to also factor in your attitude to risk and the nature of the investments you have chosen.

Taking more than the natural yield from your drawdown pension might mean selling investments and withdrawing from capital, which increases the risk of you running out of money later on in retirement which could seriously impact your lifestyle.

Don’t forget, you don’t have to take any income if you don’t want to: you could simply take the tax-free cash and leave the rest invested. Apart from the tax-free cash, withdrawals are taxed as income.

*Annual yield of FTSE All Share 3.78%, source FTSE Russell (28 February 2018)..