How could drawdown work for you?
When you reach the age of 55, you have the option of transferring your pension into a drawdown plan. With drawdown, you’re in control of how much income you take and how you access your tax-free cash (usually up to 25% of the full pot). Any remaining funds are invested for future growth potential.
Our pension drawdown calculator can help you visualise how much income you could take from your pension pot with drawdown, and how factors like fund charges, tax-free cash allocation, and performance could affect your pension’s sustainability.
Fill in the details below to see how your retirement could look!
Understanding your 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 your tax-free cash is taken 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results are based on a number of assumptions, primarily that your full fund remaining after your tax-free cash has been withdrawn is invested, and that your income, growth, and fund charges remain the same throughout the life of your plan.
For a personalised illustration and advice on the retirement solution that will best suit your circumstances, speak to our team.
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 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 if you need to increase your income further in 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 life of the plan, where 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, growth cannot be guaranteed, and the value of your plan could fall as well as 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, your pension pot is invested. 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 that your fund may not last as long as you’d hoped or expected.
The forecast provided with this calculator isn’t based on your unique circumstances, so results shouldn’t be taken as a personal recommendation or advice. Advice can help you choose the most appropriate options for your pension pot, helping it to best meet your needs.
Our team can provide independent financial advice to help you make sure you are making the right decisions with your pension pot, so talk to us today!