Pension calculator

It’s now law that most employees must be enrolled into a workplace pension scheme by their employer.

If you’re eligible for automatic enrolment, the legal minimum that must be paid into your pension is 8% of your qualifying earnings per year, with at least 3% paid by your employer.

As well as free money from your employer, you’ll get tax relief from the government on your workplace contributions, too, making them a tax-efficient way to save for retirement.

The workplace pension contribution percentage in the calculator applies to your full annual salary and includes contributions made by both you and your employer.

The calculator assumes you’re paying into a personal pension regularly and includes this in the calculations for your projected income and projected pension pot.

The tax relief from the government you receive on your deposits into a personal pension is also included in your projections.

This monthly/weekly deposit amount is in addition to any regular contributions you’re making into a workplace pension (if you have one).

It’s easy to assume you’ll need a similar income in retirement as during your working life to maintain your lifestyle. However, many people find they spend less when they stop working.
A helpful rule of thumb might be to aim for a budget of around two thirds (67%) of working your salary to enjoy a comfortable lifestyle.

This guideline assumes that you’ll reduce some of your expenses (like your mortgage payments and childcare), so the remaining income is similar to what you’ve been used to living on.

What do other people spend in retirement?

Research by the Pensions and Lifetime Savings Association (PLSA) suggests the following guidelines, although these are likely to increase over time. Please note the figures shown are after tax. Refer to PLSA guidance for the suggested pre-tax income to meet these targets.

You should think of your pension calculator outcomes as broad illustrations rather than accurate projections.

We use general assumptions to calculate your projections (like the growth of your investments, the pension fees you’ll be charged on your pension pots and the future rate of inflation) so there’s no guarantee these will reflect your specific circumstances today or later in life. 

You may get less than the projected pot value and income at retirement, and you may run out of funds before you die.

Reviewing your retirement savings regularly will help you plan for your retirement and make any adjustments to help you meet your goals.

If you include the State Pension in your projections, we’ll assume you are eligible for the full State Pension amount of £10,600.20 per year. This will be included in your projections as an income you may be able to collect from age 67.

We use your current age and ONS data to calculate your life expectancy. 

For example, the average life expectancy of people who are 35 years old is 88. To offer an additional buffer to this we’ve set your life expectancy to the age that 1 in 4 people might live to – in this case that is 96 years old .

You can find the life expectancy we’ve used for you next to your projected income located at the top of the screen.

We use a number of assumptions to calculate how much your savings might be worth at retirement.

• Investments across all your pensions are assumed to grow at a rate of 5% each year, with total fees on those pots charged at 0.68% per year.
• We assume your salary increases by 2.5% per year until you reach retirement. Any contributions you make into your pension(s) are also assumed to increase in line with your salary.
• If you choose to include the State Pension in your projections, this will add the equivalent of £10,600.20 to your income when you reach State Pension, which we assume is age 67.
• All contributions you make into your Moneybox Personal Pension and workplace pension are eligible for tax relief from the government.
• We have not taken into account the effect of inflation in your projected retirement savings. However, we have adjusted your retirement income for inflation.
• Your total workplace contribution percentage applies to your full annual salary and includes contributions made by both you and your employer.

We want to help make planning for your future as intuitive as possible, so your projected annual income and target annual income are shown in today’s terms.

This means they are adjusted for inflation, so they already reflect the tendency for goods and services (for example, groceries or public transport) to get more expensive over time.

Your projected annual retirement income is calculated based on the value of your projected pension pot(s) at retirement and how long you may be expected to live. Both the projected and target income figures shown are before tax.

We also assume that your investments will continue to grow at a rate of 5% after you retire, that the rate of inflation is 2% every year and that you won’t be taking a 25% tax-free cash lump sum when you’re ready to start withdrawing from your pension.