Pension calculator
Planning for later life? See how much your pension could be worth when you invest with us.
Remember that investments go up and down in value, and you could lose money as well as make it. Please remember that forecasts from our calculator aren't a reliable indicator of future results. The figures shown are based on the expected annual growth rate you entered, and the actual outcome and performance could differ. Tax and pension rules apply.
We’ll make assumptions for how much your pension might grow, the rate of inflation and the charges you’ll pay. You can edit these to see how your pension pot might change.
| Inflation | We’ve used a yearly inflation rate of 2%. This is in line with the Financial Conduct Authority rules for pension projections. Where you’ve entered regular contributions, we’ve assumed that these will increase with earnings inflation of 3% a year. |
| Investment growth | We’ve preset the pension pot growth rate to 5% a year, before charges and inflation are taken into account. You can choose to change this growth rate to a higher rate (8%) or a lower rate (2%). Your growth rate is not guaranteed and will depend on the performance of the investments you choose. |
| Charges | We’ve assumed total charges of 0.6% a year. This are deduced from the investment growth rate you select. Your actual charges will depend on your provider and your chosen investments. |
| Tax-free cash | We’ve assumed that you will take 25% of your estimated pension value as a tax-free lump sum. Under current rules, most people have a lump sum allowance of £268,265. |
| Pension income | We have assumed that you’ll take an income from the rest of your estimated pension value (after tax-free cash) at 4%. Under current rules, income you take will be subject to income tax. |
Your actual pension value at retirement will depend what you pay in, how your investments perform, charges, and your chosen retirement age. The income you’ll get will depend on what options you choose.
How much do I need to retire?
This will depend on when you want to retire and what you’re planning to spend your retirement money on.
Many people will aim for at least half, or even two thirds of what they spend now.
Research on Retirement Living Standards from Pensions UK estimates what you’d need to support different standards of living in retirement, from a bare minimum (basic), through to moderate and comfortable.
| Pensions UK Living Standard | Annual income needed | Annual income needed minus full State Pension |
|---|---|---|
| Minimum | £13,400 | £1,430 |
| Moderate | £31,700 | £19,700 |
| Comfortable | £43,900 | £31,900 |
Source: Pensions UK. Income levels shown for a single person living outside London in today’s money. More figures available to view.
Which pension is right for me?
Our low-cost pension accounts make building for later life even more rewarding.
The Self-invested personal pension may be better if you want to put your money into drawdown from age 55 (57 from 2028), while our Ready-made pension is more for those who won’t need to access their pot for the foreseeable future.
Self-invested personal pension
The hands-on pension for those who want to manage their investments.
Key benefits:
- Invest 100% of your annual earnings up to £60,000 per tax year
- Get 20% tax relief on personal contributions (more if you’re a higher rate taxpayer)
- Employer can contribute towards your annual allowance
- Access to the full range of investment options
- Free Pension finder service
Ready-made pension
The low-cost, hassle-free pension managed by our investment experts.
Key benefits:
- Choose from three AJ Bell funds managed by our experts
- One all-in account charge with no hidden fees or additional costs
- Find old and lost pensions and consolidate them in your new account
- Invest up to £60,000 per tax year, including 20% tax relief on personal contributions (more if you’re a higher rate taxpayer)
- Employer can contribute towards your annual allowance
Stress-free transfers
If you have an existing pension with another provider, you can move it across to us, free of charge.
What else do you need to know?
While there’s no definitive answer to how much you should pay into your pension each month, there are some general principles that will help you build a pot ready for when you retire:
- The sooner you can start investing in it, the better. This will give your money more time to grow and ride out any market fluctuations.
- If you’re auto-enrolled into an employer pension scheme, understand the maximum contribution percentage your employer will match each month – in the UK, an employer must contribute a minimum of 3%, but many pay more and might be willing to match what you pay in.
- Consistent investments can be a good way to build up a pension pot over time. Our regular investment service automatically does this for you – with investments starting at as little as £25 per month.
Our FREE pension finding service can help you track down any old or lost workplace pensions you may have, and help you consolidate them into one place.
All we need are a few details, such as employer names, rough dates you were employed by them, and some information about you, then our pension finding partner will take over and do the rest.
Once found, you can transfer them over to an AJ Bell Ready-made pension or AJ Bell Self-invested personal pension for free.
The whole process usually takes four to six weeks, and you can track the progress of any searches you’ve submitted through our handy pension finder dashboard.
When it comes to accessing your pension, you can typically take 25% of your total pot tax free, up to an allowance of £268,275 for most people. You can also access your pot in stages, if that suits your situation.
Withdrawals over your tax-free lump sum(s) will be taxed the same way as income you earn from working. Read more about how pensions are taxed on withdrawal.
Drawdown is a flexible way to access your pension. After taking your tax-free lump sum, your remaining pot will be moved into drawdown and known as crystallised funds.
In drawdown, you can choose how much income you want to take and when. Read more about SIPP drawdown.
A lifetime annuity is a type of insurance policy that pays you a regular income for the rest of your life, in exchange for the value of your pension pot. You can use all or part of your pension to buy an annuity.
When buying an annuity, you can choose whether the level of payment will stay the same, rise with inflation, or drop off later. If you like, you can also buy an annuity that pays your spouse an income after you die. These options must be chosen at the start.
The amount you receive from an annuity depends on your age, the size of your pension fund, and in some cases, your state of health. Once you buy an annuity, you’ll no longer have any say over how your pension is invested – but you will have the security of knowing your income will continue for the rest of your life. Read more about buying an annuity.
We're here to help you invest
We’ve been helping our customers put their money to work for over 30 years. And with over 673,000 customers, that’s a lot of people taking control of their financial futures.
We’re not just one of the UK’s largest and best regarded investment platforms, we’re listed on the FTSE 250, we’re regulated by the Financial Conduct Authority (FCA), oh, and we’re the only investment provider to be Which? Recommended eight years running, 2019-2026.
So, when you're ready to feel good, investing, we're here to help.
