Pension calculator

Your current pot compounds on its own. Every monthly contribution, from you and from your employer, starts compounding from the month it goes in. The calculator runs all of it forward, month by month, to the retirement date you set, treating contributions as landing at the end of each month.

The dashed line is total contributions with no growth: simply everything paid in by each year. The gap up to the solid line is investment growth. Because that growth has decades to compound, it is often the largest part of a pension pot by the time you reach it. That is the case for paying in earlier rather than more.

A pot at retirement is a result, not a decision. The decisions it feeds are much nearer than the date on the chart, and there are three of them: whether you are paying in enough to get everything your employer will add, what an extra pound into the pension actually costs you, and whether the pension is the right home for money you might need before you can reach it.

The employer match is the one worth checking first, because it is the one input here that adds money you never had to find. Run the projection twice: once at what you pay in now, and once at the contribution rate that unlocks the full match your scheme offers. The difference between the two figures is what that single payroll change is worth over your horizon, and it is usually larger than people expect, because the employer's share compounds for as long as your own does. Where that sits against everything else competing for the same money is set out in the UK personal finance flowchart.

The cost side is not like for like either. A pension contribution attracts tax relief, so for a basic-rate taxpayer roughly £80 of taxed income becomes £100 in the pot, and more for a higher-rate taxpayer. If your scheme uses salary sacrifice, the contribution comes out before National Insurance as well, which changes the cost again. So “an extra £100 a month into the pension” and “an extra £100 a month into savings” are not the same £100 leaving your pay. Your tax rate and your scheme decide the exact figures, and your payslip is where to check them.

Against that runs the access question, which is the whole reason this is a decision rather than a calculation. Pension money is locked until the normal minimum pension age. Anything you might need before then, a deposit, a career break, school fees, a year of reduced hours, has to come from somewhere you can actually get at, which is what the savings goal calculator and the pension or ISA question are really about. A projection that looks healthy at 65 tells you nothing about being short at 45.

One stress test before you act on any of it. Run the projection again two percentage points lower on growth. If the plan holds at the lower rate, the rate assumption was not doing the work. If it falls apart, the plan depends on a return nobody can promise, and that is worth knowing while you still have years to adjust the contribution rather than the expectation.

What a single projection cannot show is the decade you have to get through first. Raising a contribution is a permanent cut to take-home pay, and it competes with the mortgage, the childcare years, the car that needs replacing and the fixed rate that ends in three years. The useful thing to do with the number above is to put the higher contribution against the months in between and check that nothing breaks. CrestCast forecasts a whole household ten years ahead, cashflow and net worth together, so a change to what goes into the pension can be judged against the years you have to live through before it pays out.