How could drawdown work for you?
Reaching 55 is a significant milestone, as it opens up exciting new possibilities for your pension. One option is to transfer your pension into a drawdown plan, which gives you greater flexibility and control over your retirement income.
With drawdown, you decide how much income to take and when. You can also access a portion of your pension pot as tax-free cash (usually up to 25%). The remaining funds stay invested, giving them the potential to grow over time.
Visualise your retirement with our drawdown calculator
Our interactive drawdown calculator can help you explore different scenarios and see how drawdown could work for you. It allows you to adjust factors like:
- The amount of income you withdraw
- Your tax-free cash allocation
- Investment growth target
- Fund charges
Using our drawdown calculator, you can get a clearer picture of how drawdown could impact the longevity of your pension pot and your overall retirement income.Fill in the details below and start exploring your options:
Understanding your drawdown forecast
Based on the information you provide, the chart generated shows how long you could expect your fund to last, identifying how much of the fund would remain at the end of each year. It also assumes that you’ll take your tax-free cash at the start of the plan. Each line represents a different level of growth to give you an idea of how performance could affect the sustainability of the fund.
Your results are based on several assumptions, primarily that your full fund remaining after your tax-free cash has been withdrawn is invested and that your income, growth, and fund charges remain the same throughout the life of your plan.
Please speak to our qualified financial advisers for a truly tailored illustration and expert advice on the best retirement solution for your circumstances. We can help you create a retirement plan that meets your specific needs and goals.
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Other assumptions
This illustration uses some assumptions that may not match your individual circumstances, so your fund could run out sooner or later than indicated. Therefore, we’d recommend you seek tailored advice for an illustration that more accurately reflects your situation. The illustrations in this calculator should not be considered advice or a personal recommendation.
Inflation
Your results assume that your income will increase by 2% each year, which is in line with the government’s target for inflation, which can reduce the buying power of your income. However, actual inflation rates can differ from year to year. If you don’t adjust your income with inflation or need to increase your income further in the future, this will impact how long your fund lasts.
Investment growth and charges
The illustration assumes that growth and charges will remain the same throughout the plan’s life when, in reality, they could change.
You can change the target growth and charges shown to see their effect on how long your fund will last. Please note that growth cannot be guaranteed, and your plan’s value could fall and rise, regardless of the target set. The figure you enter for charges should include all ongoing charges associated with your plan. However, the illustration will not account for any one-off setup fees, such as an advice fee. Drawdown illustrations provided by My Pension Expert following a consultation are inclusive of all charges
Life expectancy
The life expectancy shown is based on data from the Office for National Statistics and links to your age and gender (Expectation of Life, UK – 2020-based). In reality, you may live for a shorter or longer time.
Important considerations
If you invest in a flexible-access drawdown (FAD) plan, you’re investing your pension pot. Your income relies on the performance of your fund. A FAD is usually a long-term investment; the fund value may fluctuate and can go down. Your income will depend on the size of the fund, the performance of the fund, the economic climate, and tax legislation. This could mean your fund may not last as long as you’d hoped or expected.
It’s crucial to remember that this drawdown calculator provides a simplified forecast. It’s not tailored to your unique circumstances and shouldn’t be considered personal advice. To make informed decisions about your pension and ensure it meets your specific needs, seeking professional guidance is essential. Our team of expert financial advisers can help you navigate the complexities of drawdown, choose the most appropriate options for your pension pot, and create a retirement plan that aligns with your goals and risk tolerance. Talk to us today to get started.