Retirement calculator

A defined benefit pension (sometimes called a final salary or career average pension) pays a retirement income based on your final salary and the length of time you've worked at a company.

Typically, defined benefit pensions are only available in the public sector and older workplace schemes.

The retirement calculator uses the assumptions listed below and the details you enter into the calculator, to work out if you’re on track to saving enough towards the lifestyle you want in retirement.

State Pension

We’ve estimated the age you’ll receive your State Pension based on the government’s State Pension age calculations.

We've assumed you’ll receive a full State Pension entitlement of £11,973 a year. However, if you’re planning your retirement as part of a couple, twice this amount of State Pension will be available, and both will start at the same time. If you change your retirement age on the results page, we’ll show you a warning if there’s a gap between what you select and when your State Pension is assumed to start.

Income Tax

We've used a basic income tax calculation, which assumes you won’t receive any additional income at retirement. If you’re planning your retirement as a couple, we’ve assumed that all your pensions will be divided equally between you and your partner. All of the figures we provide are net (after deduction of income tax) except for the monthly pension contribution figure.

Growth rate

We’ve assumed your pension savings will grow at 5% a year. We’ve also assumed you’ve invested your savings, so we’ve included a total charge of 0.41% a year. These rates are applied on a monthly basis, from now until retirement. These rates will also apply to income drawdown investments post-retirement.

Tax-free lump sum

We’ve assumed that no initial tax-free lump sum will be taken out of your pension, and the full amount of projected pension will be taxed as income.

Retirement living standards

The calculator uses your answers to align you to a 'Retirement Living Standard'. These standards by The Pensions and Lifetime Savings Association (PLSA) are based on independent research by Loughborough University. 

Pension withdrawal rate

We’ve assumed that in retirement you will withdraw an amount equal to 4% of your pension savings at retirement each year through income drawdown, and it will last until you reach 100 years old. You may run out of money sooner if you take more than this amount and/or the actual investment growth rate is lower than the assumed rate.

Pension allowances

We are not taking account of any restrictions that might apply to your pension contributions such as the annual allowance or the money purchase annual allowance. This means the results could be based on a higher level of contributions than you could actually make.

Monthly contributions

We’ve assumed that your monthly contributions increase by 1.5% a year up to the point of your retirement (being the difference between National Average Weekly Earnings and inflation).

Inflation rate

We’ve assumed a 2% a year inflation rate.

Charges

The charges assumed have the effect of reducing the value of the estimated pension in retirement. If the actual charges you pay in your pension are higher than the assumed charge, this would reduce the estimated values shown. The retirement calculator uses many assumptions, including the charges, and so, the results are only a guide. We have assumed a total charge of 0.41% a year. This figure is based on the average charge, when investing in funds, that currently applies across our Workplace and Personal Investing pensions. For Personal Investing customers, further information can be found on our charges and fees page. If you hold your workplace pension with Fidelity, this tool can help you understand the impact of charges on your pension fund.