So what assumptions have we made?

As the Pension Pot calculator isn’t based on all of your circumstances, we have assumed a few things along the way.

Investment Risk

All figures shown assume that you are invested in a medium risk fund. You can use the slider to change this and see what a higher or lower growth rate would give you.

Investment Type

The results assume that your pension pot is not invested in a cash fund. The calculator will not be suitable if you are invested in a cash fund as the results will not reflect this.

Annual Management Charge

All figures shown assume an Annual Management Charge for an investment fund of 0.75%.

Inflation

Inflation rates fluctuate over time, as a result we take a long term view on inflation to provide a single “average” rate. The rate of inflation used is 2%.

Annual Earnings Increase

Inflation rates fluctuate over time, as a result we take a long term view on inflation to provide a single “average” rate. The rate of inflation used is 3.5%.

Annual Income Increase

Inflation rates fluctuate over time, as a result we take a long term view on inflation to provide a single “average” rate. The rate of inflation used is 2%.

Growth Rate

This tool provides a low, medium & high forecast, the low forecast uses 2%, the medium forecast uses 5% and the high forecast uses 8%.

Other sources of income

The figures shown don’t include any other income sources that you may have such as salary, State Pension or any other pension, investment or rental income you may have.

Tax implications

When we quote tax we are using current tax rules, but these can change. The actual amount of tax you pay will be based on your own circumstances so it may be higher or lower than the amount calculated. Any money you take over your tax-free cash could push you into a higher tax-bracket. If you take all your money as cash, the amount you take out could be subject to Emergency Tax. You will have to pay or claim any difference in tax to HMRC. Tax rules vary depending on where you are resident. The calculator does not take into account any further tax you may need to pay or if you have other sources of income. However, you may have protection that allows you to take greater than 25% tax-free up front, and you should check with your pension provider before transferring.

The calculator does not take into account any further tax you may need to pay if the total value of your pension pot exceeds the Lump Sum Allowance or if you have other sources of income.

Guarantees

These options do not take into account any guarantees you may have on your pension. You should speak to your provider about any guarantees you have.

Occupational Pension schemes

If you are a member of an occupational pension scheme then your options may vary so please speak to your provider.

Guaranteed income option

Your estimated guaranteed income is calculated on the amount in your pension pot assuming you take a 25% tax-free lump sum at  the start.

The amounts shown do not include income tax, so please consider your tax situation and whether taking a guaranteed income , could result in you paying a higher rate of tax.

This tool provides an estimated annuity value based on a generic example. This example is based on the following annuity conditions:

• A single life
• No guarantee
• No escalation
• You are a non-smoker
• You are in good health

The annuity you could receive may be higher or lower than the values shown in this tool based on your personal circumstances and the type of annuity you purchase. For example: selecting an annuity with a guarantee period, selecting an annuity which increases in line with the Retail Price Index (RPI), and provides 50% of the income to any surviving partner may result in a lower income.

Flexible cash or income option

Your estimated flexible income is calculated on the amount of your pension pot assuming you take a 25% tax-free lump sum at outset.

If you are taking an income, the income shown assumes a price inflation of 2% each year and is paid monthly in advance.

Based on the level of income you take each year, it will last you until the age shown, and so no income would be paid beyond that point.

The amounts shown do not include Income Tax, so please consider your tax situation and whether taking a flexible income, as well as any other taxable income you receive, could result in you paying a higher rate of tax.

Cash options

Your estimated cash amount assumes that you take the full amount of your pension pot as cash in one go, with the first 25% usually being tax-free.

The estimated tax figure is based on current tax rates and takes into account the Personal Allowance. It does not take into account any other sources of taxable income.

If you take all your money as cash, the amount you take out could be subject to Emergency Tax. You will have to pay or claim any difference in tax to HMRC.

You may also have the option to take your cash in smaller lump sums, where the first 25% of each payment would usually be tax-free and the remainder would be subject to tax.