UK retirement income
Can I retire?
Add your pension pot, your cash savings and the State Pension, and see the yearly income you’d have — and whether it covers the life you want.
Slide to your best guess
Pension pots only — don't include other investments — or type the exact amount
Including any employer contribution — or type the exact amount
Cash and stocks & shares ISAs — interest isn't taxed — or type the exact amount
Savings accounts, bonds — interest is taxed — or type the exact amount
The rate your savings pay each year — or type the exact amount
Moderate living costs are about £31,300 — or type the exact amount
The answer, in today’s money
Not quite yet.
After income tax, your take-home income would be £18,426 a year (£1,535 a month) against the £31,300 you want — £12,874 a year short. That’s £19,746 before £1,320 of tax. Taking 4% of the pot instead of just its income would give £23,002 a year after tax.
Where that income comes from
Every figure is in today’s money, assuming 2.5% inflation a year and your capital left untouched.
Investments
£6,582 a year
Dividends and interest from your £307,550 pot, capital untouched.
Cash savings
£1,150 a year
4.0% interest on £28,759 of savings, £575 of it tax-free in ISAs.
State Pension
£12,014 a year
One full new State Pension at today's rate.
Total before tax
£19,746 a year
Everything added up, leaving the pot intact.
Less UK income tax
−£1,320 a year
2026/27 bands: £12,570 tax-free, 20% to £50,270, 40% to £125,140, then 45%.
Take-home, capital untouched
£18,426 a year
£1,535 a month after tax.
Taking 3% of the pot, after tax
£20,542 a year
A cautious rate that usually preserves the pot.
Taking 4% of the pot, after tax
£23,002 a year
The classic rule of thumb, dipping into capital.
How long the pot lasts if you draw down
Living off the 2.1% your mix pays out keeps the capital intact. Drawing down more than that spends the pot itself — here’s how many years it would last, growing at 6.8% a year (less 0.21% charges and 2.5% inflation, in today’s money).
At a 3% drawdown
indefinitely
Withdrawing £9,226 a year from your £307,550 pot.
At a 4% drawdown
indefinitely
Withdrawing £12,302 a year from your £307,550 pot.
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Living purely on the 2.1% your mix pays out means £548 a month and a pot that keeps working. Stepping up to 4% adds £477 a month, but that extra comes out of the capital itself.
The pot that gets you there
Projected pot, today's money
£307,550
£570,180 in future pounds after 25 years.
You pay in
£150,000
£500 a month on top of your £40,000 starting pot.
Assumed growth
6.8% a year
Less 0.21% in fund charges. An indicative long-run figure, not a promise.
Your Vanguard fund mix
Long horizon — growth tilted
With 20 years or more, time smooths out market falls, so the mix leans heavily on global shares to build the pot that will later pay your income.
Every holding below is a Vanguard UK fund, with charges and yields taken from Vanguard Investor.
Vanguard LifeStrategy 100% Equity Fund
Global shares, maximum long-term growth
Yield
1.7%
Charge
0.22%
Vanguard FTSE Global All Cap Index Fund
Whole-world shares, broadest diversification
Yield
1.8%
Charge
0.23%
Vanguard FTSE UK Equity Income Index Fund
Higher-yielding UK shares for natural income
Yield
4.4%
Charge
0.14%