Pension pot and drawdown
Pension drawdown calculator: how long the money lasts
Enter the pot left after any tax-free cash, the yearly withdrawal and your age. The calculator shows the age the pot runs out and the withdrawal that would last to 95.
Independent site, not a government service. Relief is claimed through your pension provider, your payroll or HMRC (Self Assessment or the GOV.UK claim service).
Example, not your result yet· change a figure to see yours
The money runs out at age
86
20 years of withdrawals, the last one partial (£15,855).
| Withdrawal as a share of the pot | 6.0% |
| Real return after charges and inflation | 2.0% |
| Withdrawal that lasts to age 95 | £13,383 |
| Withdrawal growth alone could pay | £5,742 |
Steady returns are assumed. Real markets go up and down, and a fall in the first years shortens the life of a pot more than the same fall later.
Taking flexible income triggers the money purchase annual allowance of £10,000 for any further saving.
Flexi-access drawdown keeps your pension invested and lets you take income as and when you choose. Each withdrawal is taxed as income, apart from the tax-free part, and the first flexible withdrawal brings in the money purchase annual allowance of £10,000 for any further saving (HMRC). How long the pot lasts depends on three things: the share you take each year, the return after charges, and inflation, since a withdrawal that keeps its buying power has to rise every year. With £300,000 invested at 5% growth, 0.5% charges and 2.5% inflation, taking £18,000 a year from 66, rising with prices, runs out at about 86. A level income of £13,383 in today's money would last until 95 on the same assumptions. Add the full new State Pension of £12,548 a year to see the total. Real markets vary, and a fall early in retirement shortens the life of a pot more than the same fall later on.
Figures checked by Radif Partners · Editorial policy · How the sums are done
How long a pot lasts, by withdrawal rate
The withdrawal rate is the first year's income as a share of the pot. After that the income rises with inflation, here 2.5% a year. Three growth rates are shown before charges of 0.5%.
| First-year withdrawal | Growth 3% | Growth 5% | Growth 7% |
|---|---|---|---|
| 3% | 34 years | 53 years | 60+ years |
| 4% | 26 years | 34 years | 60+ years |
| 5% | 21 years | 25 years | 37 years |
| 6% | 17 years | 20 years | 26 years |
| 7% | 15 years | 17 years | 21 years |
Taking 4% with 5% growth gives 34 years of income; taking 6% gives 20. Small changes in the withdrawal rate move the end date by many years. The table assumes the same return every year, so it shows the average path; years of losses at the start make it shorter, which is called sequence risk.
Drawdown and tax
Withdrawals sit on top of the State Pension in your tax calculation. Someone with the full new State Pension of £12,548 a year has only £22 of Personal Allowance left, so most drawdown income is taxed at 20% at least. Keeping withdrawals below £50,270 of total income avoids the higher rate. The lump sum allowance caps the tax-free cash at £268,275 for most people. The calculator leaves tax out so that the life of the pot stays clear; GOV.UK explains how pension income is taxed.
Next steps
To see what pot you are on course for, use the pension calculator. If you plan to keep working and saving after you start drawing, read the guide to the money purchase annual allowance first: the £10,000 limit applies from the day after your first flexible withdrawal. Free guidance on drawdown is offered by Pension Wise, the government service, to anyone aged 50 or over with a defined contribution pension.
Choosing a withdrawal
There are two ways to use the calculator. Start from the income you want and see when it runs out, or start from the age you want the money to last to and read the withdrawal that gets you there on the line called "withdrawal that lasts to age 95". Both assume returns are steady and the withdrawal keeps pace with prices. Many people take more in the first years of retirement, when they travel, and less later; others delay the State Pension or use part of the pot to buy an annuity for a guaranteed floor. Running the calculator with growth of 3% gives a cautious view; the gap between that and 5% shows how much rides on markets. Review the plan each year with your actual pot.