DC Modeller
What will the value of your pension be when you retire?
What will you be able to do with it?
Our calculator is here to help answer these questions.
By clicking 'Continue' you accept the Disclaimer and Assumptions
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Personal details
When you come to retire you’ll need to make a decision on what to do with the pension pot(s) you've built up during your working life.
You have a number of options, including:
Total fund
Cash
You can take some or all of your pension fund as cash.
Drawdown
Your pension fund stays invested and you take an income from it. The amount you take and how often you take it is up to you.
Annuity
A guaranteed, regular, income for life.
Over the next few screens you'll be able to allocate your total fund amount between these three options.
We'll show you what your retirement could look like:
- how taking a cash lump sum would affect the rest of your retirement income;
- how much money an annuity could give you each year;
- and how long an income from drawdown could last you.
The choices you make here are for illustrative purposes only.
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Disclaimer
This modeller has been designed to show you what your DC fund could grow to at retirement and the potential benefits it could provide in terms of cash, annuity income and drawdown income.
Please remember that the results shown by the modeller are for illustration and comparison purposes only and do not guarantee any future outcome or entitlement. The results should not be relied upon for retirement planning. Your actual benefits in retirement are likely to differ from the estimated figures shown and could be lower.
By using the modeller, you agree to the terms and conditions as follows:
- The modeller results are for illustration purposes only and are not a guarantee of any benefits.
- The accuracy of the calculations cannot be guaranteed.
You may wish to seek independent financial advice before making a decision about your future pension provision. A list of independent financial advisers can be obtained from www.unbiased.co.uk
Assumptions
Basis of calculations
These assumptions should be read in conjunction with the Terms and Conditions of the modeller which are above. This modeller carries out calculations based on the data you input and assumptions about the future such as inflation rates and investment returns.
The modeller allows the user to model future benefits in the Plan. In particular:
- Contribution rate & associated fund at retirement
- Retirement age
- Basic investment performance
- Cash lump sum
- Annuity income
- Regular drawdown income amount and frequency
Salary
Salary is assumed to increase annually by % every .
Contributions
The modeller allows you to show the impact of amending your contribution rate. The modeller also allows for the pension contributions made by your employer.
Future terms
The modeller shows all of the results in future prices, hence the effect of inflation on purchasing power should be considered.
Today’s terms
The modeller shows all of the results in today’s prices, by discounting back the future projections to the present using the inflation assumption of %.
Investment returns
Your fund is invested to help it grow. The amount it grows will depend on where you choose to invest. The modeller assumes that your fund grows at a medium rate. You can also look at how your fund might change if the assets perform better or worse than expected.
Investment returns are assumed as follows
- Low option % a year pre-retirement, % post-retirement
- Medium option % a year pre-retirement, % post-retirement
- High option % a year pre-retirement, % post-retirement
Investment returns are applied monthly and at the same rate every year until retirement.
The returns on investments are uncertain and there is no guarantee that your fund will provide this return. Actual performance will vary considerably more than implied within this tool.
The modeller should be used in conjunction with other available communications and not as the sole source of information when making decisions about your pension arrangements.
Please note that your final pension and any cash lump sum you may take are subject to CLIENT_SCHEME_NAME and HM Revenue & Customs (HMRC) rules in place at that time, including income and other taxes. This modeller cannot show whether or how you may be affected by HMRC rules now or in the future.
Pension income
The annuity rates used within the modeller change depending on what type of pension you select. This may include one or all of the following:
- A level pension or one that increases after retirement (at your chosen rate)
- A 50% spouse's pension payable after your death. The spouse's pension would receive the same increase rate as the main pension. If you select a spouse's pension, it is assumed that males are three years older and females are three years younger than their partners.
- A 0, 5 or 10 year pension guarantee.
- An annuity expense rate of 4% is assumed
Please note that you could choose to purchase a different form of annuity or drawdown than the options presented in the modeller.
DC Modeller
| Age now: | Retirement age: | Years of saving: | |||
| Salary: | |||||
| Contribution rate: | % | Fund balance today: | |||
| Investment: | Estimated fund balance at retirement: | ||||
When you come to retire you'll need to make a decision on what to do with the pension pot(s) you've built up during your working life. You can choose one or a combination of options. In this illustration you've chosen to allocate your fund balance as follows:
Up to 25% of your total fund value can be taken as tax-free cash. Anything over this amount may be taxable. |
You decided to take % of your fund balance as a cash lump sum. |
= |
An annuity is an insurance policy that provides you with a guaranteed, regular income, either for the rest of your life or for a fixed number of years. |
You decided to take % of your fund balance as an annuity. |
= |
This would give you an income for life of |
= / year |
In a drawdown arrangement, your pension fund stays invested and you take an income from it. The amount you take and how often you take it is up to you. |
You decided to take % of your fund balance as drawdown. |
= |
You would like to withdraw |
= | |
Your drawdown balance is estimated to run out at |
age | |
The life expectancy for a is age , therefore, your funds may not last long enough. Consider allocating more to drawdown or taking less on a monthly basis. |
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