Planning for your retirement can be tricky. We all know that the sooner you start, the better your prospects will be. But working out how much you’ll need to have in your pension pot isn’t easy. How much should you save? When will you retire? How much income might you need? And how long will your pension pot last?
Our pension calculator can help. Of course, there’s no guarantee that this will be the actual outcome – but having an idea of the potential is a good place to start. The results show the timescale in today’s money, that is, without taking onto account the impact of inflation.
Try different scenarios to see how they interact, you’ll then be better able to plan ahead and give yourself the best change of creating the retirement you want.
Step 1 – What might my pension pot grow to?
- See how your pension could grow depending on how much your pay in and for how long, your investments growth, and the cost of running your ii SIPP.
- Then see how long it could last by looking at how you plan to draw on your pension. (If you’re about to start drawing on your pension you can go straight to step 2, below)
Step 2 – How long will my pension last?
- Enter the current value of your pension and see how, depending on your choices, how long it could last. If you start with step 1, we’ll automatically carry forward the projected value as your starting point.
How we work out these projections
We’ve provided this calculator to help you assess the impact of some of these factors, but it doesn’t take into account all of them or your personal circumstances. The results are hypothetical and are for illustrative purposes only, based on various assumptions: they are not, and should not be regarded as, personal advice. If you’re in doubt as to the impact of these and others factors on how long your pension will last, you should seek independent financial advice.
Please remember that this is only a guide to how much your SIPP pension fund might be worth, taking into account the following assumptions:
- contributions are made at the start of each month and are maintained throughout
- your own contributions are, and continue to be, eligible for basic rate tax relief of 20%
- tax relief is immediately invested (in reality, there will be a delay between making your contribution and tax relief being received)
- the projected investment growth is consistent across the projected life of your pension: the actual growth rate is not guaranteed, will typically vary year to year and may be higher or lower than this. Past performance is not a guide to future returns
- the value of your investments can fall as well as rise: a fall in your investment value without a compensating increase in contributions will mean your pension value will be lower.
- any charges applicable to your underlying investments have not been included, For example, if investing in Unit Trusts or OEICS, fund manager charges will typically be 0.75% p.a.
- an annual charge of £120 applies for SIPP administration
- dealing charges of £10 for online trades and £1 for regular investment purchases, based on the number of each type of trade you expect to make in a typical year. These are paid subject to a minimum of £22.50 each quarter, reflecting your trading credits (see full Pricing here).
This is only a guide to how much your SIPP pension fund might be worth, taking into account the following assumptions:
- your assessment of the value of your SIPP when you start to draw benefits
- no further contributions are made to your pension once you start drawing on it
- there is consistent investment growth at 5% p.a. over the life of your pension: the actual growth rate is not guaranteed, will typically vary year to year and may be higher or lower than this. Past performance is not a guide to future returns
- the value of your investments can fall as well as rise: a fall in your investment value without an equivalent reduction in the income drawn from it will mean your pension will run out sooner
- charges of 0.75% p.a. apply to your investments (the typical fee charged by a fund manager), plus an annual fee of £120 for your SIPP administration and a further £120 annual fee for income drawdown. Actual fees may be more or less than this
- any state pension income has been ignored
- monthly pension income is the gross figure before deduction of income tax, where applicable.
We have over 20 years' experience of helping people invest online and are regulated by the Financial Conduct Authority. All customer investments are held securely in trust for customers. These arrangements protect your assets in the event of our insolvency. Your cash and holdings are protected up to the limits provided by the Financial Services Compensation Scheme (FSCS). You can read more about how your assets are held here. With secure customer log in and encrypted data throughout, we provide a service you can rely on.
knowing the risks
A SIPP is a type of personal pension, best suited to those who wish to make their own pension investment decisions. Please be aware of the risks involved.
The investments made within a SIPP can fall as well as rise and you may end up with a fund at retirement that’s worth less than you invested. You can normally only access the money in a pension from age 55 (57 from 2028). Tax treatment depends on your individual circumstances and may be subject to change. If in any doubt as to whether a SIPP is right for you, we recommend you seek independent advice from a qualified adviser.