Pension Calculator

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.

Our pension 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.

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 (57 as of 2028). The State Pension, on the other hand, depends on when you're 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.

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.

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.

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.

Currently, there’s no limit on how much you can pay into your pension, however you won’t receive tax relief on anything over £60,000 or 100% of your salary, whichever is lower. The £60,000 limit includes all payments, including the government top up and employer contributions – so it is actually £48,000 of your contributions, plus £12,000 tax relief.

If you go over this limit you won’t receive tax relief and will have to pay an annual allowance charge which will be added to the rest of your yearly taxable income. If your income is less than £3,600 a year, you will only be able to contribute up to £2,880.

You can access your pension when you turn 55 (rising to 57 in 2028), and are able to withdraw 25% of the total amount tax-free. However, you do not have to take the remainder of pension then. If you’re still working, for example, you can leave the money in your pension – and continue to contribute – until you retire.

Wealthify automatically adds the 25% top up when you make a personal contribution to your pension and only if you ticked the box to state your eligibility for tax relief when you opened the SIPP. So, if you personally pay in £800, the government adds another £200, making the total £1000. However, if you’re a higher-rate taxpayer, you may be entitled to more, in which case you will need to contact HRMC to be able to access higher-rate tax relief. This will need to be submitted on your annual tax return.

You can transfer in most types of pensions, although there are exceptions. For example, the government doesn’t allow the transfer of a public service pension. Similarly, if your pension has defined benefits – such as guaranteed annuity rates or a final salary promise – then we won’t be able to accept this, so please check before requesting a transfer.  We also cannot accept a transfer if you’re already taking an income from it.

In the majority of cases, no. We can begin a pension transfer on your behalf without you needing to do anything. However, things happen, and if your old provider objects or needs further confirmation, then we’ll get in touch to let you know what’s needed.

We don’t charge you anything to transfer, but your old provider may charge exit fees or transfer fees, so you may want to check this with them before you go ahead.

This will depend on the type of pension transfer and who your previous providers were. In some cases, providers may require a physical signature, if so, we’ll send you a form to sign. However, most providers are happy with a digital signature, so there’s a chance that you may not need to physically sign anything.

This can differ from provider to provider, but the majority of pension transfers take 30 days. The exceptions are if there are issues locating your pension, or if we have to manually transfer your pension, then it could take up to 12 weeks. If we do find that we need more details from you to process a transfer, our team will get in touch to let you know what’s needed.