Income Modelling Tool

Personal details

Please enter the age at which you plan to retire, your own assessment of your current health and your total pension savings.

Age:

Health:

Your current personal, lifestyle and medical information can affect how long you might live for. We have based our calculations on UK Pensions Industry Data* and your own assessment of your general health.

'Excellent' - assumes that you are feeling pretty good and haven’t been to the doctors for as long as you can remember. Your height and weight are fine, and you don’t take any tablets for any health conditions.

'Reasonable' – assumes that you are feeling okay health wise, but not brilliant. You have managed to give up smoking, and you take medication for Type 2 Diabetes.

'Challenging'– assumes that your health is struggling as a result of a more serious condition such as Parkinsons that is impacting on your activities of daily living.

'Critical'– assumes that you are suffering from a very serious medical condition, such as cancer, and undergoing treatment for it. You may find it difficult to get about, and possibly need assistance with day-to-day activities.

*The Continuous Mortality Investigation (2017).

Total value of pension savings:

This is the total value of all your personal pension funds you wish to use. This can usually be found on letters from your pension providers, which detail the retirement benefits they are offering you. If you would like to use savings from more than one scheme please add them together before entering.

Please note your pension fund may fluctuate until you make a decision to convert it into a retirement income.

Initial lump sum

You can usually take up to 25% of your pension savings as a tax-free initial lump sum. Before you convert your remaining pension savings into a retirement income, you can take another amount as cash but this will be subject to income tax.

This calculator assumes you take any tax-free cash at outset.

Pension savings:

This is the total value of all your pension funds.

Tax-free lump sum:

Yes No

(max 25%) OR

You are usually able to take up to 25% of your total pension savings as tax-free cash. This is also known as a tax-free lump sum or pension commencement lump sum. If you are taking more than £268,275 as a tax-free lump sum please read the important notes under the calculator.

Taking an additional taxable lump sum?

Yes No

This option lets you choose to take some of your pension fund as cash in addition to your tax-free cash. Please remember that this will be taxable at your marginal income tax rate and may reduce the amount of contributions you can make to defined contribution pension pots tax-free in the future.

Important note: In most instances you can take up to 25% of your pension fund tax free, but this can only be taken once. If you take a taxable lump sum it will be subject to tax at your marginal rate, and may reduce the amount you’re allowed to contribute to defined contribution pensions in future.

Funds set aside

Here you can set aside an amount for an emergency, such as replacing your boiler, home repairs or an insurance claim excess, or as a rainy day fund. Please be aware that this fund will not contribute towards your retirement income.

Remaining pension savings:

This is the total value of all your pension funds after you have taken any cash withdrawals.

£0

Do you want to set aside some of your fund for investment only?

This part of your fund will not be used for generating an income.

Yes No

(max 100%) OR

It is important to consider setting aside some money for investment. The money you set aside will be invested and could grow or reduce, but would not be used to generate an income.

Indicative income

Now you can choose how much of your pension savings to allocate against the different types of available retirement income i.e. guaranteed income for life (annuity), flexible income (drawdown) or a combination of the two.

Remaining pension savings:

This is the total value of all your pension funds after you have taken any cash withdrawals.

£0

Income type required?

Guaranteed income, also known as an annuity, pays you a set amount throughout your retirement for as long as you live.

Flexible income is drawdown income generated from your pension fund that remains invested, which means the actual value could increase or decrease over time. There is a chance that your invested money will be exhausted and you may then run out of money.

For how long would you like to take flexible income (drawdown)?

How much annual income would you like to receive for a fixed period (interest will be added to this amount)?

FOR years

Percent value must be between 0 and 100 % assumed annual return after charges. You can vary this amount.

Remaining amount to be allocated to longer term managed drawdown:

*

% assumed annual return after charges. You can vary this amount.

Percent value must be between 0 and 100

*To understand the risks on how long this might last we strongly recommend you seek financial advice.

Your next steps

The graph on the right shows you how your retirement income could be made up. It's just one element to consider when planning for your retirement and it is important to consider many aspects together when thinking about your retirement and retirement income.

Please take time to also consider:

your household costs and how they may change through retirement. This can help you understand when you may need more money.
how long you might live in retirement. It is key to understand how long you may need to plan for, which can help ensure you don’t find yourself running out of money in old age.
the impact of how much tax you will have to pay for your different choices .

To print a copy please click PDF/PRINT or to make changes click PREVIOUS

Quick income builder

Personal details

Initial lump sum

Funds set aside

Indicative income

Your next steps

Gross income

Annual income for initial period only

Initial lump sum(s) taken:

Funds set aside (emergency fund):

Pension fund yet to be allocated:

Important notes

Quick income builder

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