How Much Pension Do I Need?

Calculate the pension pot needed for your target retirement income using drawdown, 4% rule or annuity.

Last updated: April 2026 · Source: GOV.UK

£

Pension Pot Needed (drawdown)

£228,923.96

£1,085.58/month shortfall after State Pension

Drawdown (3% growth)

£228,923.96

4% Rule

£325,675.00

Annuity (~5.5%)

£236,854.55

3 methods: Drawdown (invest and withdraw), 4% Rule (safe withdrawal rate), Annuity (guaranteed income for life). State Pension provides £11,973.00/yr — the rest must come from your pot.

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Target pot calculation works backwards from desired retirement income. The 4% rule (derived from the Trinity Study) suggests withdrawing 4% of your pot in year one, then adjusting for inflation annually, gives a high probability of lasting 30 years. To generate £20,000/year from drawdown, you need £20,000 / 0.04 = £500,000. Alternatively, current annuity rates convert pot to income directly: at a 6.5% annuity rate, £20,000/year requires £307,692.

The State Pension offsets your required private provision. The full new State Pension of £221.20/week (£11,502/year in 2025/26) reduces the income your private pension must generate. If you want £25,000/year total and expect full State Pension, your private pension only needs to produce £13,498/year, requiring a pot of approximately £337,450 at 4% drawdown or £207,662 at a 6.5% annuity rate.

Working backwards to today, the calculator uses compound growth projections. Given a target pot, current savings, years to retirement, and assumed growth rate (typically 5% nominal for a balanced portfolio), it calculates the required monthly contribution using the future value of an annuity formula. Charges reduce effective growth, so a 5% gross return with 0.5% charges yields 4.5% net growth.

How much pension pot for £30,000/year retirement income

  1. Desired annual retirement income: £30,000
  2. State Pension offset: £11,502/year (full new State Pension)
  3. Private pension income needed: £30,000 - £11,502 = £18,498/year
  4. Using 4% withdrawal rule: £18,498 / 0.04 = £462,450 target pot
  5. Currently aged 35 with £25,000 saved, 30 years to retirement at 4.5% net growth: need to contribute £530/month

Source: GOV.UK

Frequently Asked Questions

What does the How Much Pension Do I Need? do?
Calculate the pension pot needed for your target retirement income using drawdown, 4% rule or annuity. All calculations are performed in your browser using official UK rates and thresholds.
Are these figures guaranteed?
No. Pension projections are estimates based on assumed growth rates and current contribution levels. Actual returns depend on investment performance, fees and future policy changes.
What is the pension annual allowance?
The pension annual allowance for 2025/26 is £60,000. This is the maximum you can contribute (including employer contributions) and receive tax relief. The allowance is tapered for high earners.