Important information about our future budget calculator

When you retire and stop earning, you may need the money in your pension savings to last for the rest of your life. It’s important to know whether you’ll have enough income to live on in retirement.

Your cost of living in retirement

These results are estimates and should be used for guidance only.
They’re designed to indicate if the amount you currently save, and contribute to your pension, will be enough to give you an adequate income in retirement. It does not provide financial advice.If you’re over 50, the government’s Pension Wise service can give free and impartial guidance to help you understand your retirement options. You can get guidance online on Pension Wise’s website or over the telephone on 0800 1383944.

Important information

  • This calculator assumes expenses in retirement (which can be adjusted by you) as set by the minimum income standard of the Joseph Rowntree Foundation. For more information on the minimum income standards, please visit the Joseph Rowntree Foundation’s website.
  • This calculator produces a snapshot of your budget based on your inputs and will need to be revisited regularly to reflect any changes in your future circumstances.
  • This calculator shows the surplus or shortfall in your projected retirement income at today’s values.
  • This calculator does not provide financial advice. If you’re unsure of your next steps, speak to Pension Wise or talk to your financial adviser. If you don’t have one, you can try unbiased.co.uk to find a financial adviser. Further guidance can be found on The People’s Pension website.
  • The calculator uses 2019-2020 UK income tax rates and thresholds, and doesn’t take Scottish rates of income tax into account where these differ from UK rates.
  • This calculator doesn’t take into account spouse or partner income.
  • The calculator is only appropriate if you’re under State Pension age as we don’t take the State Second Pension (S2P), also known as Additional State Pension, into account.

To provide you with the estimates we’ve had to make some assumptions:

  • The annual management charge (AMC) for your pension with The People’s Pension is based on the current AMC of 0.5% each year.
  • Investment growth – we use the default ‘balanced’ profile which currently has an estimated growth rate of 4.5% each year.
  • Projected retirement income – we inflate salary and expenses by 2.5% each year.
  • We assume that you take your full 25% tax-free cash lump sum at retirement.
  • Pension contributions – the legal minimum contributions under auto-enrolment increased in April 2019. If the contribution amounts you input are above the legal minimums from April 2019, we assume your contributions will increase by inflation only. If the contribution amounts you input are below the legal minimum then we will use the legal minimum instead and increase this amount in line with inflation each year. For more information, visit our webpage about the legal minimum pension contributions .
  • Eligible earnings – to help work out how much your pension contributions are, the calculator asks for your salary before tax (ie your gross earnings). And we assume that the contribution percentages you input are on gross earnings. The tool assumes that any planned future increases in contribution rates will be on eligible earnings.
  • If you input your pension contributions as percentages, we assume they’re based on the full amount of salary you inputted. But your employer might not base your contributions on your full salary. This tool doesn’t take into account your specific employer’s arrangements, so your actual contributions may vary.
  • We assume your employer applies tax relief to your pension contributions on a gross tax basis, ie your contributions are taken before tax (from your gross earnings). Your employer might do this in a different way depending on what they chose when they set up your pension – check with them if you want to know which settings they decided to use.
  • Annuity rates – we calculate the income you’ll receive in retirement in the same way we do for the annual statement you receive for your pension savings with The People’s Pension.
  • State Pension – we assume you’ll have a full entitlement (which can be adjusted by you) and use the current State Pension age based on your current age. You can check your State Pension age on the government’s website.