The cases studies are based on our current understanding of the legislation in place from 6 April 2021.

The following assumptions are applicable to all case studies:

  • The case studies show the final pension pot values that might be payable when you have chosen a retirement option. The figures are examples and are for illustrative purposes only.
  • The figures are not guaranteed and may be higher or lower.
  • The figures have made no allowance for the future effects of inflation. Price inflation reduces the worth of your pension pot over time.
  • We have assumed that the pension pot grows by 5% per year until the chosen retirement age. However, the actual growth rate you achieve may be more or less than this.
  • A Total Annual Fund Charge of 1%. The actual Total Annual Fund Charge you are charged may be more or less than this.
  • The contributions shown are the gross amount (that is basic rate tax relief has been included) and do not increase.
  • Tax rates and allowances are based on the 2021/22 tax year. The rates that apply when you choose a retirement option may differ.

The calculations are based on UK income tax bands. If you are a Scottish or Welsh taxpayer, we will claim tax relief at the Scottish or Welsh basic rate of income tax. If you pay tax at a higher rate you can claim any extra relief from your tax office.

The following assumptions apply for any case study which produces an annuity income figure:

  • Tax Free Cash Sum (TFCs) is 25% of the projected pension pot at retirement which will reduce the annual income you will receive in retirement.
  • The annuity income is based on the current annuity rates of the top 3 annuity providers in the United Kingdom as at March 2021. The annuity rates used are those for the retirement age you have chosen in the case study. For example, if you are aged 64 now and assume a further 5 years of additional contributions, the annuity rates used are for a retirement age of 69. The annuity rates you might get at the chosen age are likely to differ significantly.
  • The annuity rate that we have used depends on the projected fund size (after deduction of TFCs).
  • The annuity income which is payable for life will stay the same, will be paid monthly in advance, and is guaranteed to be paid for at least 5 years.
  • For index linked annuities, it is assumed that the annuity income varies in line with the Retail Price Index (RPI).
  • For an enhanced annuity it is assumed that the standard annuity rate is increased by an enhanced annuity percentage of 25%. If you qualify for an enhanced annuity, the increase may be more or less than this.
  • The annuity income you receive will be taxable.
  • Where a spouse’s annuity is shown we’ve assumed the spouse is three years younger.