Pension Drawdown Calculator 2026/27

Your Pension Will Last

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Pension Pot

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Sustainable Income (4% rule)

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Monthly Withdrawal

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Age at Depletion

Pot Value at Midpoint

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Withdrawal Rate

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Pension Pot Over Time

How It Works

Each year your pension pot grows at the investment return rate, then your annual withdrawal is deducted. If you choose to inflation-adjust, the withdrawal amount rises by the inflation rate each year to maintain purchasing power.

The 4% rule is a common guideline suggesting you can sustainably withdraw 4% of your pot each year. On a £250,000 pot that is £10,000 per year. A more cautious 3% rule (£7,500/year on £250k) offers extra safety margin.

Flexi-access drawdown lets you keep your pension invested while drawing an income. Up to 25% of your pot can be taken as a tax-free lump sum. The remainder stays invested and is subject to income tax when withdrawn.

Investment returns shown are before charges. A typical SIPP platform fee plus fund charges might reduce your net return by 0.5-1% per year.

Drawdown Scenarios · £250,000 Pension Pot

At 4% annual investment return with 2.5% inflation-adjusted withdrawals

Annual Withdrawal	Monthly Equivalent	Withdrawal Rate	Years Pot Lasts	Verdict
£8,000	£667	3.2%	50+ years	Pot keeps growing
£10,000	£833	4.0%	50+ years	Borderline sustainable
£12,500	£1,042	5.0%	~35 years	Comfortable
£15,000	£1,250	6.0%	~24 years	Moderate risk
£20,000	£1,667	8.0%	~16 years	High withdrawal
£25,000	£2,083	10.0%	~11 years	Unsustainable
£30,000	£2,500	12.0%	~9 years	Very high risk

Pension Drawdown FAQs

What is the 4% rule for pension drawdown?

The 4% rule suggests you can withdraw 4% of your pension pot each year without running out of money over a 30-year retirement. On a £250,000 pot that is £10,000 per year. It originated from US research in the 1990s · while a useful starting point it should not be treated as a guarantee, especially given UK-specific tax and inflation considerations.

How long will a £250,000 pension pot last?

At £10,000 per year (4% withdrawal) with 4% investment growth and inflation-adjusted withdrawals, a £250,000 pot can last 35 or more years. At £20,000 per year it may last only 15-16 years. The key variables are your withdrawal rate, investment returns and whether you increase withdrawals with inflation · use our calculator to model your own numbers.

What is flexi-access drawdown and how does it work?

Flexi-access drawdown lets you keep your pension pot invested and withdraw money as and when you need it. You can take up to 25% of your pot as a tax-free lump sum (the pension commencement lump sum). The remainder stays invested and any withdrawals are taxed as income. It offers more flexibility than an annuity but you bear the investment risk and must manage the risk of outliving your pot.

Should I buy an annuity or use drawdown?

An annuity provides a guaranteed income for life regardless of how long you live or how markets perform · ideal if you want certainty. Drawdown keeps your pot invested and can grow, and unused funds pass to your beneficiaries free of inheritance tax. Many retirees use a hybrid approach: an annuity to cover essential expenses and drawdown for discretionary spending. The right balance depends on your health, other income sources, and attitude to risk.

Can I take my entire pension as a cash lump sum?

Yes, you can withdraw your entire pension pot but only 25% is tax-free. The remaining 75% is added to your taxable income in that year and taxed at your marginal income tax rate. Withdrawing a large pot in one year could push you into the 40% or 45% band, resulting in a large tax bill. Most people take the 25% tax-free element and leave the rest in drawdown to manage their tax liability over time.

Drawdown Scenarios · £250,000 Pension Pot

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