Pension Calculator
How the Calculator Works
This calculator helps you project your pension growth and retirement income based on your current situation and future contributions. It takes into account:
- Your current age and planned retirement age
- Current salary and expected salary growth
- Employee and employer pension contributions
- Annual bonus and bonus contributions
- Investment growth rates and inflation
- Tax-efficient contribution strategies
Enter your details below to see how your pension could grow over time and what income you might expect in retirement.
Key Calculations Explained
Compound Growth
Your pension pot grows through compound interest, where your returns generate additional returns over time. The calculator uses monthly compounding to provide accurate projections.
Tax Efficiency
The calculator includes options to optimize your contributions for tax efficiency:
- Higher rate tax relief (40% tax bracket)
- Personal allowance restoration (over £100,000)
Retirement Income
Your projected retirement income is calculated based on:
- 25% tax-free lump sum (optional)
- Your preferred drawdown rate
- Inflation-adjusted projections
Important Considerations
Annual Allowance
The standard annual allowance for pension contributions is £60,000 (2023/24). This includes both your contributions and your employer's contributions. Higher earners may be subject to the tapered annual allowance.
Lifetime Allowance
The lifetime allowance has been abolished from 6 April 2024. Previously, it was £1,073,100. This change means there's no longer a limit on how much you can save in your pension without facing additional tax charges.
Investment Returns
The calculator uses your input for expected annual returns. Remember that past performance is not indicative of future results, and investment returns can vary significantly.