How RetirementInSight works

What information we use

The calculator uses the information you enter about your household. It can include current age, planned retirement age, private pension balances, accessible savings, State Pension forecast, defined benefit pensions, other income, target retirement spending, downsizing or other lump sums, and partner details where relevant.

Start the retirement calculator when you want to test your own figures.

Year-by-year projection

RetirementInSight works through retirement one year at a time. For each year it considers which income sources have started, estimates income tax, applies income towards your spending target, uses savings or accessible pensions where needed, applies one-off inflows or expenses, then records the remaining balances.

Investment growth is applied at the end of each projection year after income, spending, withdrawals and one-off events for that year. This is a modelling convention, not a prediction of when markets move.

Today's money

Headline results are shown in today's money. For example, £3,000 a month in the results is intended to represent roughly the spending power of £3,000 today, rather than an inflated future-pound figure.

The default inflation assumption is 2%. The engine uses real returns, meaning returns after inflation and investment costs for V1 modelling purposes. This helps avoid adding inflation twice.

Investment return scenarios

The calculator runs three deterministic scenarios. These are not forecasts and they are not guaranteed returns.

Tax treatment

RetirementInSight includes a simplified UK income-tax estimate for England, Wales, Scotland and Northern Ireland using centrally configured 2026/27 rules. Taxable income can include State Pension, defined benefit pensions, taxable private pension withdrawals, employment or business income, and other taxable income streams.

The calculator does not model National Insurance, tax codes, every HMRC edge case, capital gains tax, dividend tax or provider-specific emergency tax handling. It is not a tax-planning tool.

State Pension

RetirementInSight asks you to enter your own State Pension forecast and start age. It does not try to calculate entitlement from your National Insurance history, because that can depend on details the calculator does not know.

Where possible, use your official GOV.UK State Pension forecast. For a practical walkthrough, read the State Pension forecast guide.

Private pension access

Private pension money may not be available immediately. The calculator models access ages separately for each DC pension, using an editable default of 57.

This matters because someone can have enough overall wealth but still have a short-term funding problem before pension money is accessible. RetirementInSight calls this a pension access bridge.

Tax-free pension cash

The calculator does not automatically assume every private pension withdrawal is 25% tax-free. Normal DC pension withdrawals are treated as taxable pension income. Users can optionally model a separate tax-free pension cash event, which reduces the relevant pension balance and adds the cash to accessible assets.

RetirementInSight does not optimise pension crystallisation, Lump Sum Allowance usage or tax-free cash strategy.

Defined benefit pensions

Defined benefit or final salary pensions are modelled simply: annual amount, start age and whether the income broadly keeps pace with inflation in today's-money terms. Scheme-specific rules, early or late retirement factors, commutation and transfer values are not modelled.

Couples

Couple mode models both people separately for age, retirement age, State Pension, pension income, taxable income and DC pension access. Household spending and accessible assets are pooled for V1. Survivor or death modelling is not included; both people are assumed to remain in the projection through the selected end age.

Downsizing and future events

Users can model simple future changes such as downsizing proceeds, inheritance, one-off lump sums or major expenses. Downsizing proceeds are treated as net money available to the household. The calculator does not model property price growth, sale costs, stamp duty, mortgage refinancing or equity-release products.

How we decide whether a plan is on track

The calculator checks whether your target spending can be funded through your selected projection end age. The default end age is 95. Results are grouped into plain-language statuses:

These statuses are not probabilities. They are a way to summarise one set of assumptions.

Sustainable spending

Sustainable spending is an estimate of the level of spending the base projection could support through your selected end age, using the information and assumptions entered. It is not a recommended spending amount or personalised financial advice.

Retirement bridges and income gaps

RetirementInSight distinguishes between a pension access bridge and an income gap before later pensions start. For example, you may stop work at 55, access a private pension at 57 and receive State Pension at 67. The projection shows how accessible savings may need to cover those different periods.

What the calculator does not model

Some omissions are intentional V1 scope choices. The calculator does not currently model:

• Monte Carlo simulation
• survivor or death modelling
• care costs
• National Insurance
• annuity pricing
• detailed benefits modelling
• scheme-specific DB rules
• lifetime tax optimisation
• sophisticated pension crystallisation
• property appreciation
• inheritance tax
• saved accounts or saved plans

Why scenarios instead of Monte Carlo?

The first version uses conservative, base and optimistic scenarios because they are easier to understand and show how sensitive a plan may be to weaker or stronger real returns. They do not show probabilities. A future version could add more advanced risk modelling if it improves decisions without making the calculator harder to use.

Sources and updates

Changing financial rules and reference figures are maintained in central configuration where practical, with source and last-verified metadata. Last reviewed: 2026-08-18.