How your pension pot grows
A pension is a long-term investment. Each contribution you and your employer make is invested and grows over time, and because the growth compounds, starting earlier makes a big difference. This calculator projects your pot at retirement from your current age, current pot, monthly contributions and an assumed growth rate.
To give a rough idea of retirement income it applies a 4% annual withdrawal to the projected pot — a common rule of thumb — and can add the full new State Pension of £12,548 a year (2026/27). Remember that up to 25% of a pension pot can normally be taken tax-free.
Tax relief: the government top-up
Pensions come with a valuable perk: tax relief on what you pay in. For a basic-rate taxpayer, a £100 contribution effectively costs just £80, because the government adds £20. Higher and additional-rate taxpayers can claim back even more through their tax return. It's one of the main reasons a pension usually beats saving the same money in an ordinary account.
Employer contributions and auto-enrolment
If you're employed, you're normally auto-enrolled into a workplace pension, with a minimum total contribution of 8% of qualifying earnings — at least 3% from your employer and the rest from you including tax relief. Employer contributions are essentially free money on top of your salary, so opting out, or not paying in enough to earn the full employer match, means leaving money on the table.
Workplace pensions, personal pensions and SIPPs
Most people build up a workplace pension through their job. You can also open a personal pension or a SIPP (self-invested personal pension) yourself, which give you more control over how the money is invested. Many people accumulate several pots from different jobs over a career — it's worth keeping track of them all and considering whether to combine them.
The State Pension on top
Your private and workplace pensions sit on top of the State Pension, which is based on your National Insurance record. The full new State Pension is around £12,548 a year for 2026/27, but it usually isn't enough to live on comfortably by itself — which is exactly why building your own pot matters.
Frequently asked questions
How much will my pension be worth at retirement?
It depends on your contributions, how long you save and investment growth. For example, a £20,000 pot plus £350 a month at 5% growth over 32 years could reach around £430,000. Use the tool to model your own figures.
What is the full State Pension for 2026/27?
The full new State Pension is £241.30 a week, or about £12,548 a year, for those who reach State Pension age with enough qualifying years.
How much should I pay into a pension?
A common guideline is to save a percentage of your salary equal to half your age when you started. Employer contributions and tax relief boost what you put in.
What is the 4% rule?
It's a rule of thumb suggesting you can withdraw about 4% of your pot each year in retirement. It's a rough guide, not a guarantee.
Can I take some of my pension tax-free?
Normally you can take up to 25% of your pension pot tax-free from age 55 (rising to 57 from 2028), with the rest taxed as income.