Pension vs Lump Sum Calculator
Compare taking a guaranteed monthly pension with a one-off lump sum by estimating present value, break-even age and the return needed.
Compare Your Options And Get Clear Answers
Compare taking a guaranteed monthly pension with a one-off lump sum by estimating present value, break-even age and the return needed.
Pension vs Lump Sum Estimator
Enter your numbers below for an instant estimate.
How It Works
Key concepts behind this calculator
Value the Pension
Discount each year of payments at your expected return.
Compare
Present value versus the lump sum.
Break-Even
Age when total pension received equals the lump sum.
Use As A Guide
Results are estimates based on your inputs. Check real quotes, rates and professional advice before deciding.
Pension vs Lump Sum Factors
Key factors.
| Factor | Favours Pension | Favours Lump Sum | Note |
|---|---|---|---|
| Longevity | Long life | Short life | Health matters |
| Market risk | Avoids it | You bear it | Behaviour risk |
| Flexibility | Low | High | Access to cash |
| Inheritance | Limited | Leaves balance | Survivor option |
| Plan strength | Strong plan | Weak plan | Insurance limits |
| Rule of Thumb | Pension for security | Lump sum for flexibility | Seek advice |
Pension vs Lump Calculator FAQ
Answers to common questions about this calculator.
It depends on your health, other income, risk tolerance and the terms. A guaranteed pension suits those needing certain income; a lump sum suits those wanting flexibility.
Use a realistic long-term return, often lower than stock market averages for safe investments.
Many pensions have insurance, but limits apply. Check the plan.
No. Consider speaking to a regulated adviser.