Pension Drawdown Calculator
Estimate how long your pension pot will last in retirement. Factor in your initial capital, annual withdrawals, and expected investment growth.
Calculate Your Drawdown Timeline
Enter your current pension pot, desired annual income, and expected growth rate to see a projected timeline of your retirement funds.
Retirement Parameters
Customise the tool to match your retirement plan
Drawdown Evaluation
Projected timeline and financial breakdown
How Pension Drawdown Works
Flexi-access drawdown offers freedom, but it requires careful management to ensure your money lasts throughout your retirement.
Sequence of Returns Risk
Market falls early in your retirement can permanently damage your pot’s longevity, as you are selling investments at a loss to fund withdrawals. A cautious investment strategy is often recommended in the first 5-10 years.
The 4% Rule
A popular guideline suggesting that withdrawing 4% of your initial pot in year one, and adjusting that amount for inflation each subsequent year, gives a high probability of your money lasting for 30 years.
Tax Implications
You can usually take 25% of your pot as a tax-free lump sum. Any subsequent withdrawals from the drawdown fund are treated as taxable income and added to your total income for the year.
Sustainable Withdrawal Rates
General guidelines for initial withdrawal rates based on your desired retirement timeframe and risk tolerance.
| Retirement Timeframe | Conservative Rate | Moderate Rate |
|---|---|---|
| 20 Years | 4.5% – 5.0% | 5.0% – 5.5% |
| 25 Years | 4.0% – 4.5% | 4.5% – 5.0% |
| 30 Years | 3.5% – 4.0% | 4.0% – 4.5% |
| 35+ Years (Early Retirement) | 3.0% – 3.5% | 3.5% – 4.0% |
Drawdown FAQ
Everything you need to know about managing your pension in drawdown.
Pension drawdown (also known as flexi-access drawdown) allows you to keep your pension pot invested while taking a flexible, taxable income from it. Unlike an annuity, your pot remains exposed to investment growth, but also to market falls.
The 4% rule is a widely cited guideline suggesting that retirees can withdraw 4% of their initial pension pot in the first year of retirement, and then adjust that amount for inflation each subsequent year, with a high probability of the money lasting for 30 years.
If your drawdown pot is depleted, you will no longer receive income from it. You would then need to rely on other sources of income, such as the State Pension, other savings, or potentially means-tested benefits like Pension Credit.
Yes, one of the main advantages of flexi-access drawdown is its flexibility. You can usually increase, decrease, or pause your withdrawals at any time, depending on your scheme’s rules and your changing financial needs.