Pension Gap Calculator

A pension gap is the difference between the retirement income you want and the retirement income your current savings are projected to provide. If you want £25,000 per year but your pension will only generate £18,000, your gap is £7,000 per year.

The 4% rule suggests you can withdraw 4% of your pension pot each year in retirement without running out of money over a 25-30 year period. For example, a £500,000 pot would provide £20,000 per year. This is a guideline, not a guarantee — actual returns vary.

The full new state pension is £11,502 per year (2025/26 rate). You need 35 qualifying years of National Insurance contributions to get the full amount. With 10 years you get the minimum, and partial amounts are calculated proportionally.

A common rule of thumb is to have 3x your annual salary saved by age 40. So if you earn £40,000, aim for £120,000 in your pension. However, the right amount depends on your target retirement income and when you plan to retire.

Yes. You enter both your personal monthly contribution and your employer's monthly contribution separately. Both are included in the growth projection. Under auto-enrolment, the minimum employer contribution is 3% of qualifying earnings.

A 5% annual growth rate is a reasonable default for a balanced pension fund after fees. Conservative funds might return 3-4%, while aggressive equity-heavy funds might average 6-8% over long periods. Past performance does not guarantee future returns.

The lifetime allowance (LTA) was abolished from April 2024. However, some tax charges on lump sums above the old threshold (£1,073,100) still apply. The calculator flags if your projected pot exceeds this level for awareness.

Yes. This calculator works for any defined contribution pension — workplace pensions, SIPPs, personal pensions, or a combination. Simply enter your total current pot value and total monthly contributions across all schemes.

The projection uses compound growth with constant assumptions. Real investment returns fluctuate year to year. Use this as a planning tool to understand the ballpark, not as a guarantee. Review and recalculate regularly as your circumstances change.

Pension contributions benefit from tax relief (20-45% depending on your rate) and employer matching. However, you cannot access pension money until age 55 (rising to 57). For flexibility, consider ISAs alongside pensions. Seek professional advice for your specific situation.