Pension Drawdown Projection (Pro) United Kingdom

What the pension drawdown calculator does

The calculator shows how long a UK pension pot lasts when you draw a flexible income from it. It can take the 25% tax-free lump sum first, then draws your chosen gross annual income from the rest, taxing each withdrawal at UK Income Tax rates and tracking the balance year by year until the pot runs out or the projection period ends.

It is a Pro tool. The calculation runs on the server, and the year-by-year schedule of opening balance, growth, gross withdrawal, tax, net income and closing balance is the premium output, turning a single “your pot lasts X years” figure into a path you can plan around.

How pension drawdown works

Since the 2015 pension freedoms, drawdown has become the usual way many people take a defined contribution pension. Instead of exchanging the pot for a guaranteed annuity, you keep it invested and withdraw money as needed. You keep control and the chance of further growth, but the pot can run out if you draw too much or returns disappoint.

Each year in the model, the remaining pot earns the expected return, you take your gross withdrawal, which is taxed as income, and the closing balance carries forward. This repeats until the balance reaches zero or the period you set ends.

The 25% tax-free lump sum

You can usually take up to 25% of a UK pension pot free of Income Tax, within the lump sum allowance. If you model taking it up front, the lump sum comes out of the pot before drawdown begins, so the income phase runs on the remaining 75%.

The cash is useful and tax-free, but taking it leaves less invested to produce income and growth, which shortens how long the drawdown income lasts. Switching the option on and off shows how much difference it makes.

How each withdrawal is taxed

Withdrawals after any tax-free cash are taxed as income. The calculator applies the Personal Allowance and the basic, higher and additional rate bands to each year’s gross withdrawal, showing the tax and the net income you receive. The bands, the allowance and the tax-free fraction are read from parameters, so they follow the current tax year. A large withdrawal in one year can push part of it into a higher band, so a steady income is often more tax-efficient than irregular lump sums.

Worked example

A £400,000 pot with the 25% tax-free lump sum taken leaves £300,000 invested. Drawing £25,000 gross a year at a 5% return, with inflation set to zero, the pot lasts about 19 years. Each £25,000 withdrawal carries about £2,486 of Income Tax, leaving about £22,514, and the projection pays about £46,000 of tax in total before the pot runs out.

With inflation switched on, withdrawals rise each year to keep their buying power, so the pot runs out sooner. A higher return makes it last longer; a higher income makes it run out sooner. The year-by-year table shows each effect.

Assumptions and limits

The projection uses a steady annual return, which is useful for comparing scenarios but ignores market swings. A run of weak returns early in retirement, while the pot is large and you are drawing from it, can do lasting damage that later good years cannot repair, so treat a plan that only just survives on paper as fragile.

The tool takes the tax-free lump sum as a single amount at the start, applies Income Tax bands to the whole withdrawal each year, and does not model the State Pension, other income, the lump sum allowance in full or changes to tax rules. It is a planning aid, not a prediction or personal advice.

Using the projection wisely

Test a range of assumptions rather than one optimistic set: a lower return, higher inflation and a longer period. If the pot runs out sooner than you would like, you can draw less, stay flexible in weak years, change the investment mix or keep a cash buffer so you need not sell investments at a bad time.

Revisit the projection regularly as markets and your circumstances change, and confirm the figures for your own pension with a regulated financial adviser.

This is general information only and not financial advice.

About This Pension Drawdown Calculator

Use this pension drawdown calculator to get an instant, accurate estimate. The figures follow official GOV.UK guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.