UK Retirement Income Calculator

How to use the retirement income calculator

1. Enter the pension pot you expect to have when you retire, and your retirement age.
2. Choose whether to include the full new State Pension (£241.30 a week in 2026/27).
3. Pick how you’ll take your pension: drawdown only, or a 25% tax-free lump sum first and then drawdown.
4. Set your yearly drawdown rate. 4% is the common starting point. You’ll see your yearly and monthly income before tax.

How the maths works

Drawdown income = your pot × your drawdown rate. A £300,000 pot at 4% gives £12,000 a year.

If you take the tax-free lump sum first, the calculator takes 25% of your pot (capped at the lump sum allowance of £268,275) and works out drawdown on what’s left.

If you include the State Pension, it adds £241.30 × 52 = £12,547.60 a year. Everything is before tax.

Worked example

A £300,000 pot, retiring at 67, taking 4% a year in drawdown, with the full new State Pension:

	Yearly
Drawdown (4% of £300,000)	£12,000
State Pension	£12,548
Total before tax	£24,548
A month	£2,046

Take the 25% lump sum first and you’d get £75,000 tax free, then 4% of the remaining £225,000, which is £9,000 a year. With the State Pension, that’s £21,548 a year.

What different pots could pay

Pension pot	Drawdown at 4%	With full State Pension	A month
£100,000	£4,000	£16,548	£1,379
£250,000	£10,000	£22,548	£1,879
£500,000	£20,000	£32,548	£2,712

These assume you take the same percentage each year. Your pot stays invested in drawdown, so it can rise and fall. Growth isn’t guaranteed.

When you invest, your capital is at risk.

What’s a comfortable retirement in 2026?

Pensions UK (formerly the Pensions and Lifetime Savings Association) publishes Retirement Living Standards to help you plan. These are the single person figures from the June 2026 update. The pot column is what you’d need on top of the full State Pension, at a 4% drawdown rate.

Lifestyle	Yearly income	Pension pot needed
Minimum: Covers all your needs with a little left over for fun, like a UK holiday and eating out now and then. No car.	£13,900	£33,810
Moderate: More security and choice, like running a car and a foreign holiday each year.	£32,700	£503,810
Comfortable: More financial freedom and some luxuries, like more holidays and help around the house.	£45,400	£821,310

For context, the average UK pension pot is around £44,000 across all ages (ONS, 2020 to 2022). At 4%, that’s about £1,760 a year.

How much State Pension will I get?

The full new State Pension is £241.30 a week in 2026/27, which is £12,547.60 a year. You need 35 qualifying years of National Insurance to get it all, and you can get a smaller amount with fewer. It goes up every April under the triple lock.

You get it from State Pension age, not when you retire. That’s 66 now, rising to 67 between 2026 and 2028, and it’s kept under review (here’s why it could rise to 68 sooner). Retire earlier and you live on your pot alone until then. The calculator shows what that would look like.

Use the government’s Check your State Pension forecast service to see how much you’ll get, when, and whether you have gaps. You can often fill gaps with voluntary National Insurance contributions.

When can you take your private pension?

Most people can’t touch a private pension until 55, rising to 57 on 6 April 2028. More in can I withdraw my pension before 55?

Retiring early means your pot has to last longer, and you won’t have the State Pension straight away. Retiring later gives you more time to build your pot and fewer years it needs to cover. For many people the sweet spot is retiring around State Pension age, when both kick in together.

Ways to take your pension

• Drawdown: take money as and when you need it and leave the rest invested. Flexible, and what’s left can pass to your family, but it can run out if you take too much or markets fall. This is what the calculator assumes.
• Annuity: swap some or all of your pot for a guaranteed income for life. Certain and simple, but less flexible, and it usually stops when you die unless you buy a joint or guaranteed one.
• Lump sums: take chunks as you need them. Usually 25% of each one is tax free and the rest is taxed as income.
• Mix and match: a common approach is the 25% tax-free lump sum, then drawdown, perhaps buying an annuity later for more security.

How retirement income is taxed

Up to 25% of your pension can usually be taken tax free, capped by the lump sum allowance of £268,275. The rest is taxed as income, in the same bands as a salary.

Income	Rate
Up to £12,570	0% (Personal Allowance)
£12,571 to £50,270	20%
£50,271 to £125,140	40%
Over £125,140	45%

These are the 2026/27 bands for England, Wales and Northern Ireland; Scotland has its own. The State Pension is taxable too, but it’s paid without tax taken off, so the tax is usually collected through your other pension income.

Example: take £20,000 a year in drawdown plus the full State Pension, and your income is £32,547.60. Income Tax is 20% of everything above £12,570, which is £3,995.52, leaving £28,552.08 a year.

• Spread big withdrawals across tax years so you use more than one Personal Allowance.
• Keep withdrawals inside the 20% band where you can.
• Use ISAs alongside your pension: ISA withdrawals are tax free.

How to build a bigger pot

• Get the full employer contribution. If your employer matches extra contributions, that’s free money.
• Bump your contributions by 1% each time you get a pay rise. You won’t notice it, but your pot will.
• Find lost pensions. Use the government’s Pension Tracing Service to track down old workplace pensions, then think about combining them (check the fees and any guarantees first).
• Invest for your age. Younger savers can usually take more risk for more growth; move towards lower risk as retirement gets close.
• Fill National Insurance gaps to boost your State Pension.
• Start early. £200 a month from 25 to 65 at 5% could grow to £305,204. Start at 35 and it’s £166,452. Those ten years are worth £138,752. Growth isn’t guaranteed.

For free, impartial guidance, try Pension Wise (the government service for over 50s) or MoneyHelper. A regulated financial adviser is worth considering if you’re close to retiring, want to retire early, or have several pensions or a complicated tax position.

What to do next

• Best pension providers: compare fees and features.
• Lifetime ISA calculator: if you’re under 40 and want a 25% bonus on top.
• FIRE calculator: see how long until work becomes optional.
• Five pension podcast episodes on how other people are approaching retirement.

Retirement income FAQs

How much do I need in my pension to retire comfortably in the UK?

On the Pensions UK standards, a single person needs £45,400 a year for a comfortable retirement. With the full State Pension and a 4% drawdown rate, that’s a pot of about £821,310. Moderate (£32,700 a year) needs about £503,810, and minimum (£13,900) about £33,810.

What is the 4% rule?

Taking 4% of your pot each year. A £100,000 pot gives £4,000 a year. It’s a rule of thumb based on US research into making a pot last about 30 years, not a guarantee.

Is £100,000 enough to retire on?

On its own, not for most people. At 4% it gives £4,000 a year, or £16,548 with the full State Pension. That’s above the minimum standard but well short of moderate.

Can I retire at 55 with £500,000?

You can access a private pension at 55 (57 from 6 April 2028), but the State Pension won’t start until State Pension age. At 4%, £500,000 gives £20,000 a year until then, and £32,548 once the full State Pension starts.

Will my pension pot run out?

At 4% there’s a good chance it lasts 30 years or more, but it’s not guaranteed. Taking much more each year, big lump sums, or not cutting back in bad market years all raise the risk.

How much tax will I pay on my pension?

Usually 25% is tax free, up to the £268,275 lump sum allowance. The rest is taxed as income: 0% up to £12,570, then 20%, 40% and 45% in England, Wales and Northern Ireland.

Should I pay into a pension or a Lifetime ISA?

A pension usually wins for retirement because your employer pays in too and you get tax relief. A Lifetime ISA can make sense if you’re under 40 and saving for a first home, or self-employed without an employer contribution.