Retirement income calculator


See what your pension could provide with our quick, and easy-to-use, new calculator. You can take your pension savings as cash, and/or as a guaranteed or flexible income.

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The calculator is designed for those aged 55-85, and is an example of what you may get, based on your age, pension size today, generic rates and current tax information. It does not take into account any guaranteed benefits you may have on your existing pension and is not a personal recommendation or financial advice. Your actual retirement options, and the amount you receive, will depend on the type of pension you have, your circumstances and the rates available at the time you take your pension savings. (These could be higher or lower than the amounts shown.) Please contact us if you would like a quote that is specific to your individual circumstances.

You’ll find guidance information about how to read the results and any assumptions used to help you along the way, and can edit what you’ve entered at any stage. At the end you can choose to print a summary of the results.

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Let’s get started. Tell us about you

£

Let’s get started. Tell us about you

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Cash lump sum

You can take up to 100% of your pension as cash (with 25% paid tax-free and the rest taxed as income). How much would you like?

£
Cash lump sum
£
Estimated tax
£
What you get after tax
Tell me more

You can take your pension pot as one cash lump sum, which our calculator is based on. OR,you could take a series of cash payments over time, while the rest remains invested. Either way, each payment will be made up of 25% tax-free-cash and the rest will be taxed as income. This could still result in you paying a higher rate of tax but could also mean paying less tax if you spread the payments out over time.

When taking your pot as cash, you’ll need to ensure your money can last – particularly if this will be your main source of retirement income. You could also be restricting the amount you can pay into a pension in the future. It may affect your entitlements to means tested state benefits, or any debts you have – as creditors may have claim on the money.

Whether you can take smaller lump sums will depend on your provider.

If you are a member of an occupational pension scheme then your options may vary so please speak to your provider. You should also check to make sure you are not losing any valuable guarantees on your pension by taking your pot as cash, and, if you have a pension with guaranteed benefits of £30,000 or more, you’ll need to take financial advice.

We also recommend you access free and impartial guidance from Pension Wise or speak to a financial adviser.

Cash lump sum

You have told us you are not taking cash lump sum

Please note: You’ve selected to take more than 25% of your pot as cash which means you’ll pay Income Tax on the remainder. We’ve taken this into account using 2016/2017 tax rates but have not included a Personal Allowance. If your pension pot is more than the Lifetime Allowance (£1 million), you could be subject to further tax that is not included in this figure.

Emergency Tax may also be deducted from the cash payment so you may need to apply to HMRC for a refund on any tax you overpay.

Take an income

After you have decided how much cash you want to take, there are two ways you could use the rest of your pension pot to provide an income.  Here's what you could receive if you choose either a guaranteed or flexible. You can also refine your options based on some of your income requirements.

Guaranteed Income

An annuity will provide a guaranteed and regular income for life and, if you choose, for a loved one after you die.

You could receive

£

per year as a regular income

  • Include my partner or dependent
  • Choose a guarantee period
  • Increase my income each year

The options you choose could affect the income you receive and may result in a lower income at the outset. Please see 'Tell me more' for the benefits and considerations of guaranteed income.

You could receive
£
per year as a regular income

Select your options

1. What percentage of your retirement income would you like to leave to your partner or dependent when you die?

This is the amount a loved one could get as an income after you die. If selected, we assume they are the same age as you.

Payments will stop when you die if you don't include this option. If you decide to choose to leave an income of either 50% or 100% for a loved one and they die before you, the income will not be paid after your death.

2. What guaranteed payment period would you like?

This is the minimum period your annuity will be paid for, even if you die. It can be selected alongside providing an income for a loved one or on its own.

Payments will stop when you die if you don't include this option. If you choose either 5 or 10 years and live longer than the period selected, no income will be paid after you die. Any income payments you have selected for your loved ones will be unaffected by this.

3. What percentage would you like your income to increase by each year?

Depending on the percentage you choose, you could help protect your income from the effects of inflation.

If you select -

0%: Your income will stay the same each year and so inflation will reduce your future buying power.

3 or 5%: Your income will increase each year by the amount selected. This could be less than inflation so may also reduce your future buying power.

RPI: Your income will go up or down in line with the Retail Price Index (RPI). If inflation is below zero, your income will go down unless you select a 'negative inflation guarantee' when you take out your annuity.

4. Review projected guaranteed income chart

Flexible income

Moving your money into a flexi-access drawdown plan means you can choose how much money you take out and when, but your pension pot may run out.

You could receive

£
per year
until you are
years old

This is when your income is due to end, based on your current age but it could run out sooner, or last longer, than the age shown. Please consider how you will make your income last.

  • Choose a potential investment growth rate
    5%
  • Increase my income each year
    0%

The options you choose could affect the income you receive and may result in a lower income at the outset. Please see 'Tell me more' for the benefits and considerations of flexible income.

£
in your first year

until you are

years old

This is when your income is due to end, based on your current age but it could run out sooner, or last longer, than the age shown. Please consider how you will make your income last.

Select your options

1. What amount of investment growth would you like to assume?

You should consider your attitude to risk as the higher the potential reward, the higher the risk that you may not get back this, or any other amount selected.

Please consider your appetite for risk when making your selection.

2. What percentage would you like your income to increase by each year?

The percentage you choose could help protect your income from the effects of inflation.

If you select -

0%: Your income will stay the same each year and so inflation will reduce your future buying power.

3 or 5%: Your income will increase each year by the amount selected. This could be less than inflation so may also reduce your future buying power.

RPI: Your income will go up or down in line with the Retail Price Index (RPI). If inflation is below zero, your income will go down unless you select a 'negative inflation guarantee' when you take out your 'flexi-access drawdown'.

3. Review projected flexible income chart

Tell me more

Annuities

An annuity provides a secure income for the rest of your life – and if you wish, for a loved one too for the whole of their life or for a certain period after you die. It is a low risk way to use your pension savings. When you turn your pension into an annuity, you can choose either a level income, or a percentage that you want this to increase by each year.

If you and/or your partner have certain health and/or lifestyle conditions, you could also be entitled to a higher income. It pays to check the various conditions that different providers cover.

Bear in mind the more options that you choose, the lower your income will be at the outset – plus these cannot be changed once you start receiving income. In addition, once you take out your annuity, you cannot currently change your mind.

Flexi-access drawdown

If you move your pension pot into a flexi-access drawdown plan, you get to choose how and when you take your money and how the rest is invested. You can also purchase an annuity at a later date if you change your mind. Any money leftover can be passed on when you die.

Although this option provides flexibility, you need to ensure that you have enough money to last - particularly if it’s your main source of retirement income. This is an investment plan so if returns are poor and/or you make too many withdrawals then the value could be significantly reduced – meaning a lower or no income in the future. You could also be restricting the amount you can pay into a pension in the future.

You may not be able to take a flexi-access drawdown plan without financial advice and if you have a pension with guaranteed benefits of £30,000 or more, you must seek financial advice beforehand.

Please note that whilst the calculator shows the amount available with either an annuity or flexi-access drawdown, you can combine the two. Please speak to your provider about this option.

You should also check to make sure you are not losing any valuable guarantees on your pension if you take some of your pot as cash. If you are a member of an occupational scheme, your options may vary and so please speak to your provider.

Whatever you do, you should shop around for a retirement income as, depending on the choices you make, you may get a more suitable product elsewhere 

With all options, we recommend you also access free and impartial guidance from Pension Wiseor speak to your financial adviser.

Take an income

Taking a Guaranteed incomeof £ per year for life

Summary and next steps

You told us your total pension pot is worth
£0
and you are
years old

Your summary provides an example of what you may get, based on your age, pension size today and current tax rates. Your actual retirement options and amount you receive will depend on the type of pension you have, your circumstances and rates available when you take your pension.

You told us you would like a
Cash lump sum of
£
Estimated tax
What you could get after tax
£

The first 25% of your pot will be paid tax free and the rest is subject to income tax at 2016/2017 rates. You can edit your cash lump sum amount or read more about this option here if you'd like.

You told us you do not want a cash lump sum
This may result in you paying tax on the full value of your pension pot, when taken as 100% income. Remember you can take up to 25% of your pot tax-free as well as taking an income, which you can edit here if you like.
You told us you would like a
Guarantee income
You could receive
£
per year
Regular income per year

As you've selected a guaranteed income with no annual increases, inflation will reduce what you can buy in the future. If you'd like to read more about this option or edit this, you can do so here.

You told us you would like a
Guarantee income
You could receive
£
per year
Until you are
90
years old

This is when your income is due to end, based on your current age but it could run out sooner, or last longer, than the age shown. Please consider how you will make your income last.

As you've selected a flexible income with no annual increases, inflation will reduce what you can buy in the future. Please also consider if you will have enough money to last - particularly if it’s your main source of retirement income. You can read more about these options or edit your inputs here if you need to.

You could receive
Cash lump sum of
£
First year retirement income
£
Estimated tax on cash and retirement income
What you get after tax in your first year
£

If you opted to take a retirement income, the 'estimated tax' figure includes your tax for your first year's payment only. Make sure you shop around for the best income available to you.

Your cash lump sum:

How to read these results

Results are based on you taking a percentage of your pension pot as cash in one lump sum. You can take up to 100%, but for any amount over the first 25% that is tax-free, we’ve included an estimate of the Income Tax you may pay. The amount you receive back may change if the value of your pension pot goes down, or up, in the meantime.

Potential charges or penalties for taking your pension pot as a cash lump sum are not included. To see if this applies, check your policy documents and/or key features, or if you are an existing customer, please give us a call.

Tax rules require careful consideration and your actual liability may be higher or lower depending on your circumstances. The calculations are based on our understanding of current taxation which is liable to change without notice. For more information please visit www.hmrc.gov.uk.

What assumptions have we used

The calculation assumes that you are entitled to take between 0 and 100% of your pot as cash and it will be paid as one lump sum. The estimated tax figure assumes that the first 25% will be paid to you tax free and you will pay Income Tax on the remainder.

The estimated tax figure is based on 2016/17 tax rates and does not take into account any Personal Allowance. This means the estimated tax figure assumes that you will pay the following rates of tax: basic rate tax of 20% (£0-£32,000), higher rate of 40% (£32,001-£150,000) or additional rate of 45% (over £150,000). The figures do not take into account any further tax you may need to pay if the total value of your pension pot exceeds the Lifetime Allowance of £1 million.

The calculator does not include any other income sources that you may have for the tax year such as salary earnings or the State Pension; or any other pension, investment or rental income. The addition of which, could result in you paying a higher rate of tax.

Your guaranteed or flexible income:

How to read these results

The results are based on you using any remaining fund, after you have taken your chosen cash lump sum amount, to provide either a guaranteed regular income for the rest of your life OR a flexible income that will be paid until the age shown.

Guaranteed income:

The annuity rates we have used, depend on your pension pot size (minus any cash lump sum) and are based on the average rates for someone your age. Annuity rates within the market can vary, so you should shop around for a retirement income as, depending on the choices you make, you may get a more suitable product elsewhere.

The results do not take into account any health and/or lifestyle conditions that you and/or your partner (if you have elected to include a partner) may suffer, which could also mean a higher income.

If you have chosen to ‘refine your guaranteed income’: The results take into account the options you have chosen in relation to either including a partner or dependent; a guaranteed period for payments to be made; an annual income increase; or a combination of these options. Please note, the options you have chosen will impact on your initial income, which could be lower at the outset.

If you have chosen not to leave an income for a loved one and/or no guarantee period, income payments will stop when you die.

If you decided to leave an income of either 50% or 100% for a loved one, we have assumed they are the same age as you when calculating income. Please note that if they die before you, the income will not be paid after your death. In addition, if you live beyond the guarantee period of 5 or 10 years, no further income will be paid after you die. This will not affect your income payments if you have also chosen to leave an income for your loved one.

If you have chosen not to increase your income annually, inflation will affect your buying power in the future. If you have chosen either a 3 or 5% annual income increase, there is also no guarantee that your income will keep pace with inflation.

Flexible income:

The estimate of how long your flexi-access drawdown plan will last is a guide only and not a guarantee. The point at which your fund runs out could be before or after this age. This will be lower if you make excessive withdrawals and/or the value of the remaining investment goes down. Remember you’ll need to ensure your money can last– particularly if it’s your main source of retirement income.

This is an investment-based product, so the value can go down as well as up and you may not get back what you put in.

If you have chosen to ‘refine your flexible income’: The results take into account the options you have chosen in relation to adding a potential growth rate to your fund and/or increasing your income annually. Please note the options selected will impact on your starting income, which could be lower at outset.

If you chose the annual investment growth rate of 2, 5 or 8%, an annual ongoing charge of 1.5% has been included. The actual growth of the fund and charges applied may be higher or lower and so there is no guarantee that this, or any other level of growth will be achieved.

If you have chosen not to increase your income annually, inflation will affect your buying power in the future. If you have chosen a 3 or 5% annual increase, there is also no guarantee that your income will keep pace with inflation.

There are therefore no guarantees that you will receive the income shown when you come to take a flexible income from your pension pot. The growth rates available within a flexi-access drawdown plan may vary and so the amount you receive at outset and later could also be lower.

For both:

The income you receive when you actually take it, will be based on the rates and options available at the time, and are subject to change. There is no guarantee you will receive the amounts shown if you have chosen to take a guaranteed or flexible income now or in the future.

All income calculations include any Income Tax applicable, so please consider your tax situation and whether this will result in your paying a higher rate of tax.

Tax rules require careful consideration and may not reflect your circumstances so your actual tax liability may be higher or lower. The assumptions are based on our understanding of current taxation, legislation and HM Revenue & Customer practice, all of which are liable to change without notice. For more information please visit www.hmrc.gov.uk.

What assumptions have we used

If you have chosen the ‘refine your income’ option, please refer to the ‘How to read these results’ section for the assumptions used.

Guaranteed income:

Your estimated guaranteed income has been calculated by assuming you buy an annuity with no future increases; a five-year guarantee period, and no income for a partner or dependent after you die. The payment assumes that you are a non-smoker, in good health and that you have elected to receive monthly advance payments.

The generic/market annuity rates used depend on your pension pot size (minus any cash lump sum you opted for) and are based on the average annuity rate for someone your age. The rate used is subject to change and could be lower if you take a guaranteed income either now or in the future.

Flexible income:

Your estimated flexible income has been calculated by assuming you take a regular annual income with no future increases, paid monthly in advance. The level of income is estimated based on the amount being sustainable until you are at the age shown, and so no income would be paid beyond that point.

The figures assume a 5% annual investment growth rate and take into account a total annual ongoing charge of 1.5%. The actual growth of the fund and charges applied may be higher or lower and so there is no guarantee that this level of growth will be achieved or that you will get back what you put in.

For both:

The amounts shown include Income Tax, so please consider your tax situation and whether taking these options will result in you paying a higher rate of tax.

There are other payment options available so you could choose to receive payments in advance or arrears and either monthly, quarterly, six monthly or annually.

Results do not take into account the effects of inflation, so this will reduce what you can buy in the future.

Remember, the calculator also does not take into account any guaranteed benefits you may have on your existing pension and is not a personal recommendation or financial advice. Your actual retirement options, and the amount you receive, will depend on the type of pension you have, your circumstances and our rates available when you take your pension if you decide to do so with us. (These could be higher or lower than the amounts shown.) Please contact us if you would like a quote that is specific to your individual circumstances.

Contact us

New Prudential pension customers

If you are new to Prudential pensions and would like to discuss your options with one our experts, please call

0800 151 3930
Monday - Friday, 9am - 6pm 0800 and 0808 calls are free from BT landlines and can vary from other providers.

Existing Prudential pension customers

If you are an existing Prudential pensions customer and would like to discuss your options with one of our experts, please call

0800 151 3932
Monday - Friday, 9am - 6pm 0800 and 0808 calls are free from BT landlines and can vary from other providers.

Summary and next steps