All of these figures take into account inflation and therefore the buying power of your pension savings in today’s money. The calculator allows for annual investment growth of 2%, 5% or 8%. We have assumed inflation to be 3% for investment growth of 5% (the default). For the lower investment growth of 2%, we have assumed 1% inflation and for 8% growth it is 5%. These assumptions are set by the Financial Conduct Authority (FCA) for pension projections.

The calculator assumes that you can only take 25% of your pension tax free (up to legislative limits where applicable) and the remainder of the fund is converted into an income stream at 4% of the capital value, it does not take into account your personal tax position.

This calculator is designed to give you an idea as to how much you will need to save into a pension to achieve your desired income in retirement. This does not factor in other income sources in retirement such as defined benefit pensions, state pension or property income. Tax charges may apply if your annual pension contributions exceed the annual allowance. Tax laws can potentially change and actual benefits received will depend on wider factors and personal circumstances at the time.

The figures generated are not advice, however if you’re not sure what’s the right thing for you to do, you should consider seeking professional advice. You can arrange a meeting with one of the Lathe & Co team here