Tools · Pensions
Pension Gap Calculator
Find out if you are on track for retirement. Enter your current pot, contributions, and target retirement income to calculate your pension gap and the monthly saving needed to close it.
Projected pension pot at age 65
£639,045
£459,255 above your target
This calculator uses compound growth projections and simplified assumptions. It does not account for tax relief, investment charges, variability in returns, changes to contribution levels, or the specific terms of your pension scheme. State Pension figures are illustrative — verify your NI record at gov.uk. This is not financial advice. Investments can fall as well as rise.
We can help you bridge the gap
Our pension specialists can review your retirement strategy and recommend practical steps to close the shortfall — whether through contributions, QROPS, or alternative vehicles.
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Pension gap — common questions
What is a pension gap?
A pension gap is the shortfall between your projected pension pot at retirement and the pot you would need to fund your desired retirement income. The gap is calculated by comparing your projected fund (current pot + future contributions with investment growth) against the pot required to sustain your target annual income — either using the 4% drawdown rule or a discounted annuity calculation.
How does the 4% rule work for retirement income?
The 4% rule is a widely used rule of thumb suggesting that withdrawing 4% of your pension pot per year should sustain your income for approximately 25–30 years, assuming a balanced portfolio. To use it: multiply your desired annual income by 25 to find your required pot. For example, a desired income of £40,000/year requires a pot of approximately £1,000,000. The 4% rule is a starting point, not a guarantee — it is sensitive to the sequence of investment returns in the early years of retirement.
How does the State Pension affect my pension gap?
The UK State Pension (approximately £12,548/year as of 2026–27 for a full new State Pension) reduces the income your private pension needs to provide. If you include State Pension in this calculator, it reduces your required pension pot by the present value of the State Pension income stream over your expected retirement — typically reducing the required pot by £150,000–£250,000, depending on your assumed return and retirement length. Check your NI record at gov.uk to verify your actual entitlement.