Retirement income estimator

Estimate your retirement income needs by entering your salary at retirement.

£

Calculated Values

Your calculated income need will be shown below.

Yearly Monthly
Gross salary
Income need

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Explained

In your retirement you will need income to meet your expenses, therefore the income you need will depend on your lifestyle. The lifestyle you desire today and the one you can afford at retirement may differ, so the question is often becomes what lifestyle should you target.

The Pensions and Lifetimes Savings Association tries to answer this question by defining three lifestyle standards . For an individual a minimum lifestyle requires £10,000 a year, a moderate lifestyle £20,000 a year, and a comfortable lifestyle £30,000 a year (all after tax).

Moneyed takes a different approach, instead of trying to define what lifestyle to target we consider what income you'd need at retirement to continue to live the same lifestyle you had before retiring. As during retirement you won't need to save for retirement, pay as many taxes, and likely have lower expenses the retirement income needed is lower. The ratio in income needed to final salary is usually termed the replacement rate and is defined as the retirement income need divided by the final salary.

The replacement rate can be determined empirically and in the UK the cannonical source a report from the Pension Commission in 2005 titled A New Pension Settlement for the Twenty-First Century: The First Report of the Pensions Commission. The values they measured were found to be dependent on the final salary as given in the table below,

Final Salary Replacement rate
Less the £13,385 80%
Between £13,385 and £24,656 70%
Between £24,656 and £35,928 67%
Between £35,928 and £60,328 60%
More than £60,328 50%

The CPI has been used to convert the salaries from the 2004 values given in the report to 2019 values. The 2004 values are £9,500, £17,500, £25,500, and £40,000.

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