How large a retirement pot do you need?

Work backwards from the income you want. Every assumption here is yours to set, because a retirement calculator that picks the inflation rate for you has already decided the answer.

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The method is written out below. It is the present value of an inflation-linked income lasting a set number of years, discounted at the return you expect.

This is an estimate based on the figures you entered. It is not a quotation, and it does not reflect any insurer's product terms or pricing. What a policy actually costs is set by the insurer at underwriting.

Nothing you type here leaves your browser. There is no server involved, no record kept, and nothing sent anywhere — you can close the tab and it is gone.

How this is worked out

Three steps, and the second is the one people underestimate.

  1. Inflate the income. The figure you entered is in today's money. By the time you retire, the same standard of living costs more — so it is compounded at your inflation rate for the years between now and then.
  2. Work out what pot funds that income. Not simply income × years: the pot keeps earning while you draw on it, and the withdrawals keep rising with inflation. The standard way to handle both at once is the "real return" — how much your return beats inflation by — and that is what this uses.
  3. Where return equals inflation, the real return is zero and the sum collapses to income × years. The calculator handles that case rather than dividing by zero.

Inflation is an input, never an assertion. This site does not tell you what inflation will be, because nobody knows. Try two or three rates — the gap between the answers is the honest measure of how uncertain this exercise is.

Questions people ask

Why does the monthly figure grow so much by retirement?

Compounding. At six per cent, prices roughly double every twelve years — so an income that feels comfortable today needs to be far larger in nominal terms by the time you retire. This is the single most underestimated part of retirement planning.

What return should I assume during retirement?

Your assumption, and it is usually more conservative than the return you would assume while building the pot, because money you are actively drawing on is normally invested more cautiously. Try it both ways.

How many years should the income last?

Longer than you expect is the safer error. Running out of money at eighty-five is a far worse outcome than leaving some behind, and the whole point of an annuity as a product is that it removes exactly this guess.

Does this account for a pension or other income?

No. It sizes the pot needed for the income you entered. If you will have other income in retirement, reduce the monthly figure by that amount before using this.

Related reading

Last reviewed: 31 August 2026