Rates verified 5 May 2026 against HMRC pension tax guidance. (See full methodology.)
Future value · Real value (inflation-adjusted) · Sustainable income · Pence-precision compounding
Total of your contribution + employer's contribution + tax relief. For relief-at-source schemes use the gross figure.
Long-term UK pension funds have averaged 5–7% gross. Subtract platform charges — typical SIPP charges 0.25–0.45%.
Most contributions rise with salary. UK CPI averages ~2.5%.
Pension pot at age 67
£749,529
In today's money: £340,114 (after 2.5% inflation over 32 years)
Standard sustainable income (4%)
£29,981/yr
£2,498/month
Total you'll contribute
£267,786
Total growth
£431,743
Pot value over time
Year-by-year breakdown
Showing expected scenario · 10 years per page
Page 1 / 4
Age
Contributions
Growth
Pot (nominal)
Pot (real)
36
£6,055
£2,373
£58,428
£57,003
37
£6,176
£2,755
£67,359
£64,114
38
£6,299
£3,160
£76,818
£71,333
39
£6,425
£3,588
£86,832
£78,665
40
£6,554
£4,041
£97,427
£86,111
41
£6,685
£4,520
£108,632
£93,673
42
£6,819
£5,027
£120,478
£101,354
43
£6,955
£5,563
£132,997
£109,156
44
£7,094
£6,129
£146,220
£117,083
45
£7,236
£6,727
£160,184
£125,135
Income strategies at retirement
Based on your nominal pot of £749,529
Conservative (3%)
£22,486/yr
£1,874/month
More sustainable; lower income
Standard (4%)
£29,981/yr
£2,498/month
Bengen baseline
Aggressive (5%)
£37,476/yr
£3,123/month
Higher income; depletion risk
Annuity equivalent
£41,224/yr
£3,435/month
~5.5% single-life level annuity, age 67
Pessimistic (4.0%)
£610,497
Real: £277,026
Expected (5.0%)
£749,529
Real: £340,114
Optimistic (6.0%)
£926,755
Real: £420,534
How does pension growth and compounding work?
UK pension funds grow through investment returns minus charges. Long-term UK pension funds have averaged 5–7% gross annual growth over multi-decade periods, but charges of 0.25–1% materially reduce this over 30–40 years — a 0.5% extra charge on a £500,000 pot grown over 30 years costs roughly £100,000 in lost returns. Compounding means small contribution increases early on dramatically affect final pot value: £200/month from age 25 produces a similar pot at 65 as £400/month from age 40, because the early money has 15 extra years to compound. Inflation eats into the spending power of your pot — £100,000 in 30 years at 2.5% inflation has the buying power of about £47,000 today, which is why we always show both nominal and real figures. The 60% tax trap band offers exceptional pension efficiency for high earners — see our 60% tax trap calculator.
How much do I need in my pension pot to retire?
The standard rule of thumb is 25× your desired annual income (the inverse of the 4% withdrawal rule). For £30,000/year of pension income you'd need a pot of £750,000. This is in addition to the State Pension (~£11,973/year for the full new State Pension in 2026/27). A pot of £500,000 at 4% withdrawal produces £20,000/year, which combined with full State Pension of £11,973 gives £31,973/year gross — enough for the PLSA "moderate" retirement standard. Most UK pension targets land in the £400k–£1m range depending on lifestyle and whether you own your home outright. Once you know how much to contribute, see our Pension Tax Relief Calculator to model contributions efficiently.
The annuity vs drawdown decision
At retirement, a £500,000 pot can be converted to a single-life level annuity (typically £25,000–£28,000/year for a 67-year-old in 2026 — guaranteed for life but inflexible and dies with you) or kept invested in drawdown (flexible, can be passed on, but exposed to investment risk and sequence-of-returns risk). Most UK retirees use a blend — annuitising enough to cover essential spending and keeping the rest in drawdown for flexibility. This is a major decision with significant tax and inheritance implications, so model carefully and consult a regulated adviser. Pensions sit outside the IHT estate for most savers, making them a powerful estate-planning tool — see our Inheritance Tax Calculator.
Frequently asked questions
How much should I save in my pension at age 30 in the UK?
▾
A common rule of thumb is to save a percentage of your salary equal to half your starting age — so a 30-year-old should aim to put 15% of gross salary (combining their own contribution, employer match and tax relief) into a pension. Auto-enrolment minimums of 8% are rarely enough for a comfortable retirement. At 30, contributing £400/month into a pension growing at 5% net of charges produces a pot of roughly £450,000 by age 67 — supporting around £18,000/year of sustainable income on the 4% rule, on top of the State Pension.
What growth rate should I use for pension projections?
▾
Long-term UK pension funds have averaged 5–7% gross annual growth over multi-decade periods, but charges of 0.25–1% should be subtracted. The FCA's standardised projections use 2%, 5% and 8% as low/mid/high illustrations. We default to 5% with 0.5% charges (= 4.5% net) which is a reasonable mid-case for a diversified equity-led portfolio. Use a lower rate (3–4% net) if you're heavily in bonds or near retirement, higher (6%+ net) only if you're young, fully invested in equities and accepting volatility.
How does the 4% rule work for UK pensions?
▾
The 4% rule (Bengen, 1994) says you can withdraw 4% of your pension pot in year one and increase that withdrawal annually by inflation, with a high probability of the pot lasting 30+ years. So a £500,000 pot supports £20,000/year initial income. The rule is US-derived and assumes a 60/40 equity/bond mix. UK research (Morningstar, 2023) suggests 3.0–3.5% may be safer for UK retirees due to lower long-term equity returns and longer life expectancy. Use 3% as conservative, 4% as standard, 5% as aggressive (with depletion risk).
What's the difference between nominal and real pension pot value?
▾
Nominal value is the literal number of pounds in your pension at retirement. Real value adjusts for inflation, showing the spending power of that pot in today's money. £1,000,000 in 30 years at 2.5% inflation has the buying power of about £477,000 today. Always plan around real values — a £750,000 nominal pot in 32 years sounds large but only buys what £340,000 buys today. UK State Pension is uprated by the triple lock, so it broadly keeps pace with inflation — your private pot needs to do the same job.
How much State Pension will I get in 2026/27?
▾
The full new State Pension for 2026/27 is approximately £230.25 per week, or about £11,973 per year, paid from State Pension age (currently 66, rising to 67 from April 2028). You need 35 qualifying years of National Insurance contributions for the full amount, and at least 10 years to get any. Check your forecast at gov.uk/check-state-pension. The State Pension is taxable but paid gross — if your other income plus State Pension exceeds the £12,570 personal allowance you'll owe income tax on the excess.
Can I retire on £500,000 in the UK?
▾
Yes, but modestly. £500,000 at the 4% rule produces £20,000/year of pre-tax pension income. Combined with a full State Pension of about £12,000/year that's £32,000/year gross — roughly £29,000 net after tax. The PLSA (Pensions and Lifetime Savings Association) defines a 'moderate' single retirement at £31,300/year (2024), so £500,000 plus full State Pension just about meets that. For a 'comfortable' retirement (£43,100/year single, PLSA), you'd need roughly £775,000 plus State Pension. Couple thresholds are higher.
Calcsmith provides estimates based on the information you enter. Long-term projections are inherently uncertain — actual returns will vary. Not financial advice; consult a qualified accountant or independent financial adviser for your situation.