How long will my UK private pension last?

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Oakspan projects a SIPP or workplace pot year by year and reports the age the invested fund can no longer pay the income you asked for. There is no single age. A private pension lasts as long as the invested pot can pay the income you take, after growth, inflation and any tax-free cash. Oakspan walks that forward one year at a time, from your current age to a horizon of 110, and marks the first retirement year the fund cannot meet the private withdrawal you need. The headline on the calculator is that age. If the pot is still paying at the target age you set, the result says it lasts beyond that age. If it fails earlier, you also see how many years short that is, and an inflation-linked income that would have lasted the full way. What moves the date While you are still saving, each year adds your personal and employer contributions and a year’s investment growth. Contributions are treated as arriving through the year, so they earn about half a year’s growth. Monthly payments can rise with the contribution-growth rate you set. At retirement the model can take 25% as tax-free cash, capped at the lump sum allowance, and leaves the rest invested. From then on, the desired income — entered in today’s pounds — is inflated each year. Withdrawals come out of the pot, then retirement growth is applied to what remains. The fund is treated as exhausted when a withdrawal cannot cover the private income still required. A larger pot, higher contributions or higher growth after charges pushes the date out. A higher income, higher inflation, an earlier retirement or taking the lump sum pulls it forward. If you say the desired income already includes the State Pension, private withdrawals fall once that pension starts, so the pot usually lasts longer. What the age does not mean The depletion age is the end of the invested fund, not the end of all retirement income. The State Pension, if you included it, continues. Other taxable income you typed in is not a pot Oakspan spends down; it is only there so the tax estimate is less wrong. Growth is a flat rate you chose, not a market path. A bad sequence of returns in the first years of drawdown can empty a pot that looked fine on a smooth average. Oakspan also reruns the same income after a 20% fall at retirement so you can see how brittle the date is. Charges, lifestyling and guaranteed rates are not modelled — if your scheme is expensive, lower the growth rate rather than hoping the headline age still holds. Run your own figures on the pension calculator. The method, including the 20% shock and the sustainable-income search, is set out on the rates and assumptions page.

What moves the date

What the age does not mean

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