Contribution calculator

How much should I invest?

As a first step, think about your lifestyle. Would you want your retirement to be as good as your life today?

What would you do with an extra 35 hours a week? A few more holidays perhaps? Days out with the grandchildren?

Don't be forced into compromising your lifestyle because of a low income when you retire. Use our contribution calculator to help you work out how much you are likely to need to invest to try to achieve the income and lifestyle that you want when you retire.

This calculator assumes the pension pot is used to buy a pension income with or without taking a tax-free cash lump sum. There may be wider options available when the benefits can be taken. When the time comes, it's important to make sure the product you buy is suitable for your needs.

This calculator uses the Government's maximum permitted annual management charge for Stakeholder pensions which is currently 1.5% a year of the value of the pot for the first 10 years of the plan and 1.0% a year after that.

Remember that any money you invest will be tied up until you take your benefits, which is normally from age 55 at the earliest, and that the value of your pension pot may fall as well as rise.

Calculator

Your details

 
 

Your requirements (see Notes below)

 
 

Please enter either your monthly/single contribution or state what level of income you would like each month/percentage of current salary.

Income at retirement

%
 
 
 

Notes

Remember your outgoings may not be as high as they currently are once you reach retirement. For example, you may have paid off your mortgage and you may receive income from other sources, including:

  • State pension
    To get a statement of your expected State Pension you'll need to complete a BR19 form, available from your local office of the Department for Work and Pensions, and send it to the Benefits Agency. Alternatively go to the following site (www.gov.uk/state-pension-statement).
  • Employer's pension
    Ask your previous employers or their pension provider for a statement of what any pension income with them may be in today's terms.
  • Personal pension
    If you already have a personal pension plan, ask your adviser or pension provider for a statement of your projected pension, in today's terms.
  • Other Savings
    If you have any other savings such as ISAs or unit trusts that could provide additional income in your retirement, these should also be taken into account.

Help

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Help: Current annual salary

This should include all taxable salary. You may also want to include any regular bonuses.

Back to Current annual salary

Help: Retirement age

You can normally take your benefits from age 55. Also, please note that the minimum term to your selected retirement date for our Stakeholder Pension is five years.

Back to Retirement age

Help: Index your contributions

Indexation means that your contribution automatically increases each year either by a fixed percentage or in line with the Average Weekly Earnings Index, which is assumed to be 2.5% for the purposes of these calculations.

Back to Index your contributions

Help: Monthly net contribution

Enter the actual net amount you would like to contribute, and the calculator will automatically add on basic rate tax relief at 20%. The minimum monthly gross contribution to our Stakeholder Pension is £20. This means that the minimum monthly net contribution is £16 (allowing for 20% basic rate tax relief).

There's no limit on how much you can contribute, however, there is a limit on how much tax relief you can get. If you have no earnings, or earn up to £3,600 in a tax year, you can contribute £2,880 net across all your pension schemes and get tax relief of £720, giving you a gross contribution of £3,600. If you earn more than £3,600 in a tax year, you can get tax relief on 100% of the earnings you contribute up to the Annual Allowance.

Your contract is for the gross contribution, so if the basic rate of tax changes, the amount you pay will change. If you're a higher/additional rate taxpayer, you can reclaim any further tax relief through your yearly tax return.

Tax relief does not apply to:

  • Transfer payments
  • Employer contributions
  • Any contributions on or after your 75th birthday.
When you reach age 75 your regular net contribution will increase as your contract is for the gross contribution and the tax relief will no longer be added.

Annual Allowance

If the total gross contributions paid by you, your employer or a third party, into any UK Registered Pension Scheme you've taken out are over the Annual Allowance, you'll be subject to a tax charge. If you're also in a final salary pension scheme (defined benefit), your gross contributions for that scheme will be based on the increase in the value of your benefits during the tax year.

The Annual Allowance for the current tax year is £40,000. Where the total contributions exceed the Annual Allowance in a given tax year, unused allowances from the three previous tax years may be available (known as 'carry forward').

In some circumstances a reduced Annual Allowance may apply:
  • Your Annual Allowance will be reduced if your income (including the value of any pension contributions) is over £150,000 and your income (excluding the value of any pension contributions) is over £110,000.
  • A Money Purchase Annual Allowance (MPAA) will apply if you take money directly out of any money purchase (defined contribution) pension pot you have, unless you:
    • Only take your tax-free cash amount, or
    • Take all of it under the small pension pot rules, or
    • Continue taking Capped Income Drawdown.
Not all of these options will be available from every pension pot.

The MPAA is £10,000 and you won't be able to use carry forward. It will apply to all future contributions made to your money purchase pension scheme(s). If you are a member of a final salary pension scheme your overall Annual Allowance stays at £40,000 and you can still use carry forward in that scheme.

The Annual Allowance will not apply in the tax year in which you die or if you take your benefits because of serious ill health.

More information is also available at www.gov.uk. You may wish to seek financial advice on this matter.

Back to Monthly net contribution

Help: Single or one-off net contribution

You may want to start your plan with a lump sum contribution. Enter the net amount you would like to contribute. The minimum single gross contribution to our Stakeholder Pension is £20. This means that the minimum single net contribution is £16 (allowing for 20% basic rate tax relief).

There's no limit on how much you can contribute, however, there is a limit on how much tax relief you can get. If you have no earnings, or earn up to £3,600 in a tax year, you can contribute £2,880 net across all your pension schemes and get tax relief of £720, giving you a gross contribution of £3,600. If you earn more than £3,600 in a tax year, you can get tax relief on 100% of the earnings you contribute up to the Annual Allowance.

Your contract is for the gross contribution, so if the basic rate of tax changes, the amount you pay will change. If you're a higher/additional rate taxpayer, you can reclaim any further tax relief through your yearly tax return.

Tax relief does not apply to:

  • Transfer payments
  • Employer contributions
  • Any contributions on or after your 75th birthday.
When you reach age 75 your regular net contribution will increase as your contract is for the gross contribution and the tax relief will no longer be added.

Annual Allowance

If the total gross contributions paid by you, your employer or a third party, into any UK Registered Pension Scheme you've taken out are over the Annual Allowance, you'll be subject to a tax charge. If you're also in a final salary pension scheme (defined benefit), your gross contributions for that scheme will be based on the increase in the value of your benefits during the tax year.

The Annual Allowance for the current tax year is £40,000. Where the total contributions exceed the Annual Allowance in a given tax year, unused allowances from the three previous tax years may be available (known as 'carry forward').

In some circumstances a reduced Annual Allowance may apply:
  • Your Annual Allowance will be reduced if your income (including the value of any pension contributions) is over £150,000 and your income (excluding the value of any pension contributions) is over £110,000.
  • A Money Purchase Annual Allowance (MPAA) will apply if you take money directly out of any money purchase (defined contribution) pension pot you have, unless you:
    • Only take your tax-free cash amount, or
    • Take all of it under the small pension pot rules, or
    • Continue taking Capped Income Drawdown.
Not all of these options will be available from every pension pot.

The MPAA is £10,000 and you won't be able to use carry forward. It will apply to all future contributions made to your money purchase pension scheme(s). If you are a member of a final salary pension scheme your overall Annual Allowance stays at £40,000 and you can still use carry forward in that scheme.

The Annual Allowance will not apply in the tax year in which you die or if you take your benefits because of serious ill health.

More information is also available at www.gov.uk. You may wish to seek financial advice on this matter.

Back to Single or one-off net contribution

Help: Monthly income at your selected retirement date in today's money

To use this area, imagine that you are retiring today. Enter how much income you think you would need to live comfortably, assuming for example that the mortgage is paid off and the children have left home. Alternatively you may wish to enter this as a percentage of your current salary.

Back to Monthly income at selected retirement date in today's money

Help: Monthly contribution to your plan after tax relief is added to it

This is the estimated contribution to your plan that you will need to make to achieve your requirements in retirement, this includes basic rate tax relief of 20%. Don't forget that there are limits to how much tax relief you can get. If you have no earnings, or earn up to £3,600 in a tax year, you can contribute £2,880 net across all your pension schemes and get tax relief of £720, giving you a gross contribution of £3,600. If you earn more than £3,600 in a tax year, you can get tax relief on 100% of the earnings you contribute up to the Annual Allowance.

Your contract is for the gross contribution, so if the basic rate of tax changes, the amount you pay will change. If you're a higher/additional rate taxpayer, you can reclaim any further tax relief through your yearly tax return.

Tax relief does not apply to:

  • Transfer payments
  • Employer contributions
  • Any contributions on or after your 75th birthday.
When you reach age 75 your regular net contribution will increase as your contract is for the gross contribution and the tax relief will no longer be added.

Annual Allowance

If the total gross contributions paid by you, your employer or a third party, into any UK Registered Pension Scheme you've taken out are over the Annual Allowance, you'll be subject to a tax charge. If you're also in a final salary pension scheme (defined benefit), your gross contributions for that scheme will be based on the increase in the value of your benefits during the tax year.

The Annual Allowance for the current tax year is £40,000. Where the total contributions exceed the Annual Allowance in a given tax year, unused allowances from the three previous tax years may be available (known as 'carry forward').

In some circumstances a reduced Annual Allowance may apply:
  • Your Annual Allowance will be reduced if your income (including the value of any pension contributions) is over £150,000 and your income (excluding the value of any pension contributions) is over £110,000.
  • A Money Purchase Annual Allowance (MPAA) will apply if you take money directly out of any money purchase (defined contribution) pension pot you have, unless you:
    • Only take your tax-free cash amount, or
    • Take all of it under the small pension pot rules, or
    • Continue taking Capped Income Drawdown.
Not all of these options will be available from every pension pot.

The MPAA is £10,000 and you won't be able to use carry forward. It will apply to all future contributions made to your money purchase pension scheme(s). If you are a member of a final salary pension scheme your overall Annual Allowance stays at £40,000 and you can still use carry forward in that scheme.

The Annual Allowance will not apply in the tax year in which you die or if you take your benefits because of serious ill health.

More information is also available at www.gov.uk. You may wish to seek financial advice on this matter.

The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.

Back to Monthly contribution to your plan after we have added basic rate tax relief to it

Help: Monthly contribution to your plan after basic rate tax relief is added to it

This is the estimated contribution to your plan that you will need to make to achieve your requirements in retirement, this includes basic rate tax relief of 20%. Don't forget that there are limits to how much tax relief you can get. If you have no earnings, or earn up to £3,600 in a tax year, you can contribute £2,880 net across all your pension schemes and get tax relief of £720, giving you a gross contribution of £3,600. If you earn more than £3,600 in a tax year, you can get tax relief on 100% of the earnings you contribute up to the Annual Allowance.

Your contract is for the gross contribution, so if the basic rate of tax changes, the amount you pay will change. If you're a higher/additional rate taxpayer, you can reclaim any further tax relief through your yearly tax return. Tax relief does not apply to:

  • Transfer payments
  • Employer contributions
  • Any contributions on or after your 75th birthday.
When you reach age 75 your regular net contribution will increase as your contract is for the gross contribution and the tax relief will no longer be added.

Annual Allowance

If the total gross contributions paid by you, your employer or a third party, into any UK Registered Pension Scheme you've taken out are over the Annual Allowance, you'll be subject to a tax charge. If you're also in a final salary pension scheme (defined benefit), your gross contributions for that scheme will be based on the increase in the value of your benefits during the tax year.

The Annual Allowance for the current tax year is £40,000. Where the total contributions exceed the Annual Allowance in a given tax year, unused allowances from the three previous tax years may be available (known as 'carry forward').

In some circumstances a reduced Annual Allowance may apply:

  • Your Annual Allowance will be reduced if your income (including the value of any pension contributions) is over £150,000 and your income (excluding the value of any pension contributions) is over £110,000.
  • A Money Purchase Annual Allowance (MPAA) will apply if you take money directly out of any money purchase (defined contribution) pension pot you have, unless you:
    • Only take your tax-free cash amount, or
    • Take all of it under the small pension pot rules, or
    • Continue taking Capped Income Drawdown.
Not all of these options will be available from every pension pot.

The MPAA is £10,000 and you won't be able to use carry forward. It will apply to all future contributions made to your money purchase pension scheme(s). If you are a member of a final salary pension scheme your overall Annual Allowance stays at £40,000 and you can still use carry forward in that scheme.

The Annual Allowance will not apply in the tax year in which you die or if you take your benefits because of serious ill health.

More information is also available at www.gov.uk. You may wish to seek financial advice on this matter.

The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.

Back to Monthly contribution to your plan after basic rate tax relief is added to it

Help: Required monthly cost to you

Don't forget that if you are a higher rate taxpayer you can currently claim back any additional tax relief via your tax return.

Back to Required monthly cost to you

Help: Lump sum contribution to your plan after we have added the tax relief to it

Don't forget that if you are a higher or additional rate taxpayer you can currently claim back any additional tax relief via your tax return.

Back to Lump sum contribution to your plan after we have added the tax relief to it

Help: Projected pension pot value at your selected retirement date in today's money

This gives you an estimate of your future pension pot value in today's money, taking into account inflation at an assumed rate of 2.5% a year.

Back to Projected pension pot value at retirement in today's money

Help: Monthly pension income at your selected retirement date in today's money

This gives you an estimate of your future pension income in today's money, taking into account inflation. This will be subject to income tax.

Back to Monthly pension income at selected retirement age in today's money
 

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