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Educational modelling only. ERIC explains CMP model output from your entered settings. Not financial advice, a suitability assessment or a personal recommendation.

Inputs

50
50
£
£
£
67
65

The calculator assumes that you and your partner retire at the same time.

Premium options:

Select a standard of living based on the widely recognised Retirement Living Standards:

Or set your own target income below:

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0

Use the budget calculator to set amounts for individual categories of spending:

Budget Calculator

0

0

If you have a final salary or career average pension, enter the annual pension you are entitled to start receiving at your scheme's Normal Pension Age. If you are an active member still accruing benefits, provide the projected benefits figure here that assumes you remain employed and your salary keeps increasing.

65
£

Have more than one Defined Benefit pension? Enter your largest scheme above (early retirement modelling applies to it only) and add the others below at the figures payable from their normal pension age.

If your scheme provides a DB lump sum, enter the gross amount below. CMP will apply your remaining Lump Sum Allowance, drip-feed any tax-free part into your ISA, and treat any excess as taxable DB pension income in the year it is paid.

£

Use this section to add any part time employment or self-employed earnings you expect to continue receiving into retirement.

0
75

Enter monthly rental income after allowable expenses have been deducted.

0
£
£
3%
75

Enter investments currently held outside pensions and ISAs in a General Investment Account. The balance is moved into the ISA over time using available ISA allowance.

£
20%

Enter dated gilt maturities or other one-off amounts. Set the timing by age, calendar year, or years from now. Each amount is paid into your GIA and can then move into your ISA using available ISA allowance.

The amount of your State Pension below assumes you will be entitled to the full amount. If this might not be the case due to gaps in your national insurance record, find out what your actual entitlement is at www.gov.uk and then update the value below.

If you are already retired, below State Pension age, and do not expect a full State Pension, consider whether purchasing missing National Insurance years could improve your entitlement using the NI Top-Up Contribution Calculator.

£

Defined Benefit Pension

Assumptions

Select an FCA Growth Scenario - These three scenarios are those specified by the Financial Conduct Authority for use in point of sale pension illustrations to demonstrate the uncertainty of investment outcomes.

i
7%
2.5%

See the effect on your retirement age from fund charges at three different levels, or use the sliders to set specific values. If you are planning to consolidate your pension funds in one place, use the level of charges expected for the destination provider.

1%
1%

Choose the end age of your retirement projection. You can view the average life expectancy for someone of your age using this calculator.

99

Rule Change Scenarios

See the effect of an increase to the state pension age. Select a new state pension age then tick the box to update the results.

67

Tax bands are currently frozen until 2031. The projection assumes they are indexed after this point (i.e. increased in line with inflation). Investigate the effect on your retirement income if the freeze is extended beyond this point. Enter the number of additional years to freeze the tax bands.

0

Explore the potential impact of a future reduction in the 25% tax-free lump sum entitlement. Use the slider to adjust the maximum tax-free percentage available on retirement.

25%

Explore the effect of a reduction in the current £268,275 tax-free lump sum lifetime limit. Use the box below to enter the limit.

£

Withdrawal Strategy

Select the age at which to start receiving your annual pension and to receive any tax free lump sum.

Provide the benefits you have already accrued, valued at your scheme's normal pension age (NPA), assuming you left service immediately.

£
£

Please also provide the number of years of service you have already accrued. This is required for the active-member approximation.

0
65
Defined Benefit Pension Amount
Reduced Tax Free Lump Sum

Temporarily increase your target income for a fixed period in retirement.

70
0%
0

The model allows more income early in retirement if you specify a reduction in income later in retirement. Indicate the age at which you want a reduction below, along with the percentage reduction. You can specify a second reduction at a later age.

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0%
65
0%

You can model the impact of deferring your State Pension. If your selected retirement age is after your State Pension age, deferral to retirement is applied automatically. Each deferred year increases annual State Pension payments by 5.8%, on top of the normal yearly increase (inflation or 2.5%, whichever is higher).

0

Enter a minimum balance cushion for your ISA throughout your retirement.

£

Risk Management

Stress-test your retirement income by simulating a market crash. Define your scenario below, then tick the box to apply the scenario.

The modelled income is lower after the crash. Set your maximum tolerable income reduction to compare with the reduced modelled income and see whether the modelled income falls below the threshold you selected.

60
0%
2
0%

Set parameters for a cash buffer below. Use these with the market crash modelling to compare the effect of different cash-buffer assumptions. CMP does not assess risk appetite or capacity for loss.

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0%
£
0%
3.5%

The weighted average growth rate for this asset mix is 0.0%. The asset mix in your funds is rebalanced each year to maintain these buffers and percentages for the whole projection.

In purchasing an annuity you exchange some or all of your pension fund for a guaranteed income for life. This removes the risk associated with a market crash and the risk that you run out of funds in later life. But in exchange for the certainty, the modelled income may be lower.

To calibrate the annuity rate calculator to rates currently available in the market and to your specific circumstances, use the Annuity Rate Calibration Tool.

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0%

Select the level of increases:

Tax Modelling Options

This section deals with tax free lump sums that have been taken or will be taken in the future and spent immediately rather than being used as a source of retirement income.

57

£0

Select your tax free cash withdrawal strategy:

The effect can be seen in the Tax Free UFPLS column of the Pension Fund Cashflow table and in the Gross Pension Payments and Cumulative Tax Free Cash charts.

Warning: Taking taxable income from your pension fund triggers the Money Purchase Annual Allowance (MPAA). This limits your future pension contributions to £10,000 per year.

Choose to divert your existing pension contributions to your ISA for additional flexibility or divert your ISA contributions to your pension for additional tax relief.

Select the percentage of salary to switch from pension contributions to take-home pay and add to your ISA.

0%

Divert your ISA contributions into your pension to boost tax relief.

0%

0

To observe how different strategies impact your Total Retirement Tax Rate, select a tax chart and watch the Key Figures change as you adjust the slider.

Note that the modelled tax result under the selected pension/ISA mix depends on the assumptions made about future investment returns and inflation.

Use this section to estimate how inheritance tax could affect your estate over time. Select the Fund Values Chart to view the results. Inheritance Tax is charged at 40% on the value of your estate above £325,000, with an additional £175,000 allowance if you pass your home to direct descendants (subject to tapering for estates over £2 million). It is assumed these allowances are fixed until at least 2030.

The red area on the chart shows the modelled amount not covered by modelled liquid assets — the part of the modelled inheritance tax liability that the liquid assets in this illustration would not meet. CMP does not determine how an estate would actually meet any liability.

£
£
3%
0

Other Income & Balances

Affordable Retirement Age

years months
Age Gross State Pension

i 		Gross Defined Benefit Pension

i 		Gross Annuity Payments

i 		Gross Part Time Earnings

i 		Gross Rental Income

i 		Gross Pension Fund Income

i 		Net State Pension

i 		Net Defined Benefit Pension

i 		Net Annuity Payments

i 		Net Pension Fund Income

i 		Total Tax Paid

i 		Net Part Time Earnings

i 		Net Rental Income

i 		ISA Withdrawals

i 		GIA Withdrawals

i 		Total Net Income

i

£
£
£

0

If your partner has a final salary or career average pension, enter the annual pension they are entitled to start receiving at their scheme's Normal Pension Age. If they are an active member still accruing benefits, provide the projected benefits figure here.

65
£

Does your partner have more than one Defined Benefit pension? Enter their largest scheme above (early retirement modelling applies to it only) and add the others below at the figures payable from their normal pension age.

If your partner will receive a DB lump sum, enter the gross amount below. CMP will apply their remaining Lump Sum Allowance, drip-feed any tax-free part into their ISA, and treat any excess as taxable DB pension income in the year it is paid.

£

0

0
75

Enter your partner's monthly rental income after allowable expenses have been deducted.

0
£
£
3%
75

Enter investments your partner currently holds outside pensions and ISAs in a General Investment Account. The balance is moved into their ISA over time using available ISA allowance.

£
20%

Enter your partner's dated gilt maturities or other one-off amounts. Set the timing by age, calendar year, or years from now. Each amount is paid into their GIA and can then move into their ISA using available ISA allowance.

The amount of your partner's State Pension below assumes they will be entitled to the full amount. If this might not be the case due to gaps in their national insurance record, find out what their actual entitlement is at www.gov.uk and then update the value below.

£

Defined Benefit Pension

Withdrawal Strategy

Partner's DB pension start age — the start age to use in the partner illustration, and the age at which any tax free lump sum is received.

Provide the benefits your partner has already accrued, valued at their scheme's normal pension age (NPA), assuming they left service immediately.

£
£

Please also provide the number of years of service your partner has already accrued. This is required for the active-member approximation.

0
65
Defined Benefit Pension Amount
Reduced Tax Free Lump Sum

Temporarily increase your partner's target income for a fixed period in retirement.

70
0%
0

You can model the impact of deferring your partner's State Pension. If your partner's selected retirement age is after their State Pension age, deferral to retirement is applied automatically. Each deferred year increases annual State Pension payments by 5.8%, on top of the normal yearly increase (inflation or 2.5%, whichever is higher).

0

Your partner may wish to maintain a minimum balance cushion in their ISA throughout retirement.

£

Risk Management

Lock in guaranteed income for your partner by converting some (or all) of their pension fund into an annuity.

To calibrate the annuity rate calculator to rates currently available in the market and to your specific circumstances, use the Annuity Rate Calibration Tool.

65
0%

Select the level of increases:

Tax Modelling Options

57

£0

This section deals with three different withdrawal strategies where your partner's tax free cash is used as a source of income rather than being spent immediately. Your partner can follow a different strategy from you.

There are three strategies to choose from. The first two take a PCLS (Pension Commencement Lump Sum), where funds are crystallised as the tax free cash is taken, so the tax free percentage of the remaining fund keeps reducing over time. They differ in when the tax free cash is taken.

  • Upfront PCLS – your partner takes their whole tax free entitlement as a single lump sum as soon as they retire. It is held in a taxable GIA and moved into their ISA as fast as their annual ISA allowance permits.
  • Staged PCLS – their tax free cash is taken gradually instead. Each year only enough of the fund is crystallised to move up to their annual ISA allowance straight into their ISA, so no GIA is needed.
  • UFPLS (Uncrystallised Funds Pension Lump Sum) – no lump sum is taken. They draw directly from uncrystallised funds, so 25% of every withdrawal is tax free until the Lump Sum Allowance of £268,275 is reached.

Select your partner's tax free cash withdrawal strategy:

The effect can be seen in the Tax Free UFPLS column of your partner's Pension Fund Cashflow table and in the Gross Pension Payments and Cumulative Tax Free Cash charts.

Warning: Taking taxable income from your partner's pension fund triggers the Money Purchase Annual Allowance (MPAA). This limits their future pension contributions to £10,000 per year.

Choose to divert your partner's existing pension contributions to their ISA for additional flexibility or divert their ISA contributions to their pension for additional tax relief.

Select the percentage of salary to switch from pension contributions to take-home pay and add to your partner's ISA.

0%

Divert your partner's ISA contributions into their pension to boost tax relief.

0%

0

To observe how different strategies impact your partner's Total Retirement Tax Rate, select a tax chart and watch the Key Figures change as you adjust the slider.

Note that the modelled tax result under the selected pension/ISA mix depends on the assumptions made about future investment returns and inflation.

Other Income & Balances