Estimate your yearly retirement income based on your pension pot.
Pension pot
State Pension
(Government pension most people will get)
Your current age
Retirement age
A pension pot of £100,000 will give you an estimated retirement income of £xx,xxx per year. This includes receiving the State Pension in retirement, alongside your private pension pot (explained below).
Use our pension calculator to forecast your personalised retirement income in more detail, and get an estimated monthly savings plan to achieve it – all based on your personal circumstances (such as your current salary and age). It’s easy to use, and takes less than a minute.
Self-employed? Use our self-employed pension calculator.
Was it what you were expecting? Here’s how we’ve worked it out…
First of all, we’ve included the State Pension, which is the pension you’ll get from the government when you reach State Pension age (currently 66 but rising to 68).
We’ve estimated your State Pension age based on your current age, but you can get a more accurate State Pension age for yourself, and learn more with our State Pension age calculator. We’ll cover the State Pension in more detail below too.
You can toggle receiving the State Pension income on and off to just get the estimated income from a private pension (a pension you've saved up yourself and in your name, rather than the government pension).
We’ve also planned for the State Pension income to increase by 2.5% per year in future. This is the minimum it will increase by (it’s written in law – more info below).
For the private pension income estimate, here’s our assumptions:
If you're planning ahead and simply wondering what the retirement income would be for certain common pension pots, well here's some quick links for you:
To help you plan your retirement savings and total pension pot figure, we’ve also included the recommended retirement income figures – these are categorised into minimum, moderate and comfortable, and based on the Retirement Living Standards, set by the Pensions and Lifetime Saving Association.
The three retirement standards are a guide to how much you’ll likely need to spend in retirement, and a great way to plan your retirement income. From these, we’ve determined the income you’ll need to get that spending amount (accounting for tax).
Note: none of the retirement standards include any housing costs, so no mortgage or rent – it’s presumed you would have paid off your mortgage by the time you retire.
This is the very least you’ll need to cover the essentials, such as food and energy bills. You won’t be able to afford to run a car, and not much spare for anything else (such as clothing or birthday presents). You might be able to afford a week-long holiday in the UK each year.
Today, this is £14,400 per year for a single person, and £22,400 per year for a couple.
This provides more financial security, with more for everyday bills and food. There’s extra to eat out once per month, and you’ll be able to afford to run a small cheap car (at least 3 years old), and replace it every 7 years.
There's budget for new clothes and presents for friends and family (although not a huge budget), and you can afford a low cost 2 week holiday in Europe per year.
Today, this is £31,300 per year for a single person, and £43,100 per year for a couple.
This provides for financial freedom, and you’ll have spare cash to do things you like – but not to live a life of luxury. There’s more for food each week, and you’ll be able to afford a small cheap car, and replace it every 5 years.
Today, this is £43,100 per year for a single person, and £59,00 per year for a couple.
Using these standards (levels in recommended income), we can plan ahead to what you’ll need to earn from your pension pot to have those amounts to spend in retirement.
If you change your age in the calculator above, you’ll be able to plan into the future, and see how much you’ll likely need to earn each year in retirement to afford those levels of retirement.
We’ve estimated your future forecast by increasing it yearly based on the recommended rate of inflation of 2.5% (recommended by the Financial Conduct Authority (FCA)).
Inflation is the price of things going up over time, such as food and bills (which continually happens) – so it’s always needed when planning into the future.
We’ve estimated the total private pension pot needed to provide the yearly income for each of the retirement standards (minimum, moderate and comfortable). A private pension is a pension that’s in your name and you save into it directly, either through your work, or one you set up yourself (technically called a personal pension) – we’ll run through that in more detail below.
By default, we’ve planned that you’ll receive the State Pension at retirement age (as most people will).
However, if you don’t expect to receive it, uncheck the box, and you’ll get an estimate of your private pension needed without factoring in the State Pension. (We’ll explain how to get the State Pension just below.)
By changing your current age in the calculator, you’ll get a more accurate estimation of your retirement income. We’ve planned ahead to work out how much State Pension you might get when you retire, and how much you’ll likely need in retirement.
This is the age you expect to retire and start withdrawing from your pension pot.
The State Pension income will show if you’ve reached State Pension age, which can be from 66 to 68, depending on your current age.
The State Pension is what you’ll get from the government when you reach State Pension age (66 to 68) – providing you’ve paid at least 10 years worth of National Insurance contributions over your working career, but 35 years to get the full amount.
The full amount is currently £221.20 per week (£11,502 per year), so it’s not a lot – and likely won’t cover all your essential bills in retirement (and it’s quite far below the recommended minimum of £14,400).
And that’s where private pensions come in – they help boost your retirement income to a level where you can live comfortably (as you deserve to). And of course, building up a bigger private pension pot, means a bigger income in retirement – they’re not as complicated as they might seem, we’ll run through them just below.
The State Pension increases every year. It’s written in law, and is based on one of three things (together called the triple lock):
This means as a minimum, the State Pension will increase by 2.5% every year. It can rise by more (and we can hope), but ultimately that means the prices of things have increased more, so pensioners need more money to live on.
Unfortunately, the State Pension rises are not intended to provide pensioners with more cash to spend on themselves (that’s all down to private pensions).
Private pensions are pensions in your name, and all yours – they’re private to you (rather than the government). You decide how much to save into them, and later when to withdraw from them (as long as you’re over 55 years old (rising to 57 in 2028)).
They’re an excellent way of building up your retirement income, and you can save into them tax-free. Your money grows tax-free too, so it can grow much quicker over time. You might pay tax when you withdraw from it later down the line (Income Tax), but 25% will typically be tax-free (which you can take as a tax-free lump sum if you want to).
You can save up to £60,000 per year, or your total income (e.g. salary), whichever is lower.
There’s two main types of pensions, a workplace pension, and a personal pension.
A workplace pension is what you’ll likely have if you’re employed, and is set up by your employer. When you get a new job, you’ll normally be automatically enrolled into their pension scheme.
They’re pretty great, because you get free cash from your employer – if you pay in 5%, they’ll have to pay in 3% themselves (by law).
A personal pension is one you set up yourself, so you get to decide which pension provider to use (so you can pick a great one) and which pension plan to use (where your money is invested to grow more over time, such as not with fossil fuel companies).
You can even make your own investments with a self-invested personal pension (SIPP) – although only recommended for those experienced in investing.
You can still save into them tax-free – you’ll get something called pension tax relief, which refunds you the tax you’ve paid on your income. This works by a 25% bonus from the government added to your personal pension every time you add money, and if you’re a higher earner paying 40% or 45% tax, you can claim some of this amount back on a Self Assessment tax return. Learn more with our pension tax relief calculator.
If you’re self-employed, a personal pension is your only option to save into a pension (but a great one), and they’re also a great addition to a workplace pension (if you’re employed), as you have much more control, and can pick a great pension provider, where potentially your money might grow more, have lower fees, and have things like great customer service, or a mobile app to manage your pension better.
If a personal pension sounds interesting, here’s all the top pension providers.
When the time comes to (finally) retire, and start taking your pension. There’s two main ways, pension drawdown, and a pension annuity.
Pension drawdown is where you simply start withdrawing cash from your pension pot.
The rest of your pension pot can keep growing over time where it is (although normally at a lower rate per year, as your money will be moved to investments that aim to provide a regular income, rather than growing more when you are younger (which typically has bigger ups and downs).
Drawdown is becoming an increasingly popular option since 2015 when the law was changed to allow it (called the pension freedoms act).
As a general rule of thumb, you can withdraw up to 4% per year from your pension pot safely, so it doesn’t reduce too much over time (you don't want to run out of money).
Nuts About Money tip: learn more with our guide to the best pension drawdown providers.
Pension annuity is the more traditional method, and it’s where you simply trade in your pension pot for a guaranteed regular income, either for the rest of your life, or a set number of years (e.g. 20 years).
They provide more stability as the money is guaranteed. However, depending on your pension pot, and things like your health, will depend on how much you actually get per month.
Learn more about these with our guide to drawdown vs annuity.
You can start withdrawing from your private pension from age 55 (57 from 2028), if you want to, although we recommend letting it grow until you really do retire (those extra years can make a big difference to your retirement income).
When you do start withdrawing from it, 25% will be completely tax-free, and you can take it as a tax-free lump sum if you want to (all in one go).
If you don’t take it as a lump sum, and say, for instance, you opted for pension drawdown, each withdrawal you make will have 25% of it tax-free. Your pension provider will sort out the tax for you.
With the remaining 75%, it will count towards Income Tax, which is the tax you pay on things like your salary now. However, you’ll still get the tax-free Personal Allowance, which is currently £12,570, before any tax is paid.
After you reach State Pension age, you won’t pay any National Insurance on your income either.
Note: there is a limit of how much will be tax-free, which is currently £268,275 – so will only affect those with pension pots of over £1,073,100.
We hope this calculator has been helpful in planning your retirement income – and it’s never too late to boost it if it’s not what you were expecting (start today!).
Unfortunately, building up a decent retirement income is mostly in your hands – see the State Pension as a boost to your income, rather than solely relying on it (it’s not enough to live on for most people).
Saving into a private pension now is pretty much essential to have a comfortable life in retirement, and they really can grow very large over time – thanks to sensible investing by the experts, and you making contributions (ideally regularly over your working career).
A great strategy is to collect the free cash from your employer by saving into a workplace pension, and then save more into a personal pension to boost your total pension pot further – a personal pension gives you more control over your pension…
You can pick a great pension provider, could potentially benefit from lower fees, better pension growth, and things like much better customer service and useful mobile apps to manage things whenever you like.
You can also move all your old pensions over to your personal pension (called consolidating your pension), so you’ll never forget about them when the time comes to retire (which happens more than you think), and you can make sure your pension money is growing in the way you want (like ethically).
To get a more detailed plan of how much you might want to be saving, use our pension calculator, and if you’re not sure where to get started with a personal pension, we recommend checking out PensionBee¹, it’s easy to use, low cost, and a great record of growing pensions over time – you’ll also get £50 added to your pension for free with Nuts About Money.
For all the top options, check out the best personal pensions.
Happy retirement saving!
Use our pension calculator to plan your retirement savings and get on track – it’s easy to use and takes less than a minute.
Edward Savage is a leading expert on money, with a background of 8 years working in financial services in London, has a business, accounting and finance degree, runs an investing community, and teaches people about money. He writes about all aspects of personal finance, including pensions, investing, mortgages and insurance.
This article was written, reviewed and fact checked by the expert team at Nuts About Money. You’re in safe hands. Learn more.
We're experts in all things pensions, with many years of combined experience writing and talking about pensions and retirement, and some of our team were top financial advisors with professional pension qualifications. We love writing about pensions, they’re pretty much the best thing you can do for your future.
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