One plan from your first payslip to your last birthday
Retirement planning is usually split in two. Accumulation calculators show what your pension might grow to by 65. Drawdown calculators start with a pot on the day you retire and ask how long it lasts. The two halves depend on each other, though. Retire two years later and you get two more years of contributions and growth, and two fewer years of withdrawals. Your pot is bigger and has less to do. This planner runs both halves as one timeline, so every change you make shows up in the whole plan.
It works one year at a time. While you are working, your take-home pay covers your spending and your ISA saving, your pension contributions go in on top, and you decide whether spare money is spent or saved. From the year you stop, income comes from whatever keeps paying, such as the State Pension, a final salary pension or part-time work. Any gap is filled from your pots in the order you pick. Each pot grows at its own rate after inflation and charges. The model stops at the age you plan to, or records the year the money runs out.
Worked example: 45 today, stopping at 65
Take the planner's starting answers. You are 45, with £15,000 in cash, £40,000 in ISAs and £120,000 across your pensions. Your take-home pay is £3,200 a month, you spend £2,400, and you save £300 a month into an ISA. A further £600 a month goes into your pension, counting your employer's share and tax relief. Half of anything left over is saved. You plan to stop work at 65 and spend £2,300 a month, falling to 85% from 75 and 75% from 85. Your State Pension starts at 68. Your money is in a balanced mix earning 5% a year, against 2.5% inflation and 0.5% charges.
By 65 your pots reach about £593,000 in today's money. For the first three years there is no State Pension, so you draw about £27,600 a year, mostly from cash, plus a tax-free slice of pension that fits inside your Personal Allowance. Once the State Pension arrives, withdrawals fall sharply. The plan lasts to 95 with about £485,000 left. It held up in about 88% of 1,000 simulated markets. The same plan could afford about £3,240 a month in retirement. Drawing pension first instead of tax-smart would cost about £49,000 more in tax over retirement and leave £80,000 less at the end.
Now move the retirement age to 60. With steady returns it still just works, leaving about £65,000 at 95. In the market test, though, only around half of the runs last. Five fewer years of saving and five more years of withdrawals leave very little room for a bad decade. That is why the earliest retirement age is shown alongside the market test: on paper and in practice can be quite different.
UK rules the planner builds in
- Pension access age. You normally can't draw a private or workplace pension until 55, rising to 57 on 6 April 2028. Until then, cash and ISAs have to carry you on their own.
- Tax-free cash. A quarter of a pension can usually be taken tax-free, capped by the £268,275 Lump Sum Allowance. You can take it as 25% of each withdrawal (the default) or as one lump sum at retirement.
- Income tax on the rest. Taxable pension income is added to your State Pension and any final salary pension and taxed at 2026/27 rates, with Scottish bands if you choose them. The Personal Allowance taper above £100,000 is included.
- Frozen thresholds. Income tax thresholds are frozen until April 2031. In today's money that means they shrink each year until then, so slightly more of a fixed income is taxed. Untick the box in the assumptions to turn this off.
- The State Pension. The full new State Pension is £241.30 a week in 2026/27. Your State Pension age is set from your age under current law, rising to 67 between 2026 and 2028 and to 68 later.
- ISA allowance. ISA saving is capped at £20,000 a year per person, which includes any spare money the planner moves into your ISA.
- Inheritance tax. From 6 April 2027 most unused pension funds count towards your estate for inheritance tax. The planner shows how much pension is left at the end so you can weigh this up.
Which pot to spend first
Three people with identical pots can pay very different amounts of tax depending on the order they spend them. The planner works out all three orders every time and shows them side by side:
- Tax-smart draws enough pension each year to use up your Personal Allowance. With 25% tax-free, that's £16,760 of withdrawals with no tax at all. After that it uses cash and ISAs, and only takes more pension when they run low. Income that would otherwise go untaxed is never wasted.
- Savings first spends cash and ISAs before the pension. It suits people who want to leave their pension untouched for as long as possible. It often means years with an unused Personal Allowance, followed by bigger taxable withdrawals later.
- Pension first draws the pension before anything else. It pays more income tax early, but leaves ISAs, which are tax-free to draw, for later. From April 2027 it may also reduce inheritance tax on what is left.
Click Use this next to any order in the results to recalculate the whole plan with it.
Why a plan that works on average can still fail
The main projection uses the same return every year, which makes it easy to follow but hides the biggest risk in retirement: the order returns arrive in. A 20% fall in the first year of drawdown, while you are also withdrawing, permanently shrinks the pot that has to recover. The same fall at 85 barely matters. The market test runs your plan 1,000 times with yearly returns that swing around your average, then shows good, typical and poor outcomes and the share of runs that last. To see how real historical sequences would have treated a pot, try the drawdown simulator, which replays every market window since 1957. The sequence-of-returns guide explains the effect in detail.
What the planner leaves out
Like any model, this one simplifies. It treats a couple as one household with income split evenly for tax and assumes you both reach State Pension age together. It doesn't model capital gains or dividend tax on investments outside ISAs, or National Insurance on part-time earnings. It doesn't cover means-tested benefits or annuity purchases either, and it doesn't separate defined benefit pensions with different increase rules. Charges are a single percentage, and the market test uses random returns rather than real history. Treat the results as a well-informed starting point, check your State Pension forecast, and consider free guidance from Pension Wise or a regulated adviser before making big decisions.
Once you know roughly what you can afford, the State Pension deferral calculator shows whether waiting for a bigger State Pension pays off. The FIRE calculator and Coast FIRE calculator look at how soon saving could stop altogether.
For education only, not financial advice. Projections use constant real returns, apart from the market test, and 2026/27 tax rules. They aren't guaranteed. State Pension figures are from GOV.UK. The minimum pension age change is set out in the Finance Act 2022. The Lump Sum Allowance comes from GOV.UK.