Pension Calculator

Does this pension calculator account for inflation?

Yes. Inflation is a big factor when looking at your pension, as it’s typically quite a few years away, during which the price of things will continue to go up with inflation. 

At Wealthify, we always aim to offer inflation-beating returns even with our Cautious Plan, and we’ll continue to work on growing your Plan even when you’re drawing from your pension.

How is retirement income calculated?

Our calculator works out your retirement income based on the size of your pension and whether you’ll receive the State Pension, and divides this by the number of years you’ll likely be retired for.

For example, if your total pension value is £200,000 and you’ll aim to be retired for 20 years, then your retirement income would be £10,000 a year.

Am I eligible for State Pension?

That depends on your circumstances. In order to get the full basic State Pension, you’ll need a total of 30 qualifying years of national insurance contributions. There are a few ways that you’re able to be eligible:

  • By working and paying National Insurance
  • Receiving National Insurance Credits from unemployment, sickness or as a parent/carer
  • Paying voluntary National Insurance contributions

If you’re still not sure, then you can check with the Pension Service.

What is State Pension age?

When you’ll receive State Pension depends on your date of birth, but it’s worth noting that you can keep working after you reach this age. The new State Pension age ranges from 67 to 68, but this may change in the future.

For more details of what your State Pension age might be, please visit: https://www.gov.uk/state-pension-age

What age should I retire?

This is entirely up to you and will depend on your personal circumstances.

It may be worth considering when you’ll be able to get your pension – for example, with a personal pension, you can start drawing down from your pension when you’re 55. The State Pension, on the other hand, depends on when you are born and will be available when you turn 67 or 68.

If you’re not sure when you’ll be able to afford to retire, then it may be worth speaking with a financial advisor.

How do you work out life expectancy?

Understanding how long you’ll live is quite tricky – and more than a little daunting. So that you don’t have to guess, we use the ONS Life Expectancy Calculator, which works out your life expectancy based on your current age and sex.

How much money will I need in retirement?

There are a lot of things that can impact how much money you’ll need for retirement. For example, will you still have a passive income, for example, from renting property? Are you planning on travelling elaborately or just enjoying some peace and quiet?

A general rule of thumb is to aim for a pension that pays out two thirds of their current salary each year. For example, if your salary is £30,000 a year then you may want to aim for a pension pot that pays out £20,000 each year.

How will my living costs change in retirement?

It’s believed that your living costs in retirement are lower than they are now. But this assumes that you no longer have a mortgage to pay off and you won’t have commuting and other work-related costs. However, you may have increased medical or mobility costs, so this generalisation may not apply to everyone. If you’re unsure of how retirement will change your living costs, it may be worth talking to a financial advisor.

What is the State Pension?

The State Pension is a regular payment you should receive from the government when you reach retirement age. And the income you receive depends on you having paid a certain level of national insurance contributions over your working life. To get any state pension, you’ll need at least 10 years’ worth of contributions – if you don’t meet this requirement, you may not receive any money from the government.

For more information on the State Pension, please visit: https://www.gov.uk/state-pension

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