Defined Contribution Pension Calculator
Project your DC pension pot, model employer matching and calculate estimated retirement income
Last updated: March 2026
DC Pension Projection Calculator
Model your defined contribution pension growth using realistic assumptions
Retirement Income Estimate
Contribution Breakdown
Auto-Enrolment Contribution Rates 2026
| Contribution Type | Minimum Rate | Qualifying Earnings Band |
|---|---|---|
| Total (employer + employee) | 8% | £6,240 – £50,270 |
| Employer minimum | 3% | Of qualifying earnings |
| Employee minimum | 5% | Including tax relief |
The PLSA recommends 12–15% total contribution rate for a comfortable retirement. Auto-enrolment minimums are the legal floor, not a savings target.
Understanding DC Pension Investment Charges
Investment charges erode your pension pot over time. The difference between a 0.5% and a 1.5% annual charge on a £200,000 pot over 20 years at 5% growth is approximately £65,000 in additional pension wealth. Check your annual management charge (AMC) and consider whether lower-cost alternatives are available:
| Pension Type | Typical AMC Range | Notes |
|---|---|---|
| Auto-enrolment default fund | 0.22% – 0.75% | Subject to 0.75% cap |
| Employer workplace SIPP | 0.15% – 0.45% | Institutional rates |
| Personal SIPP (index funds) | 0.15% – 0.50% | Plus platform fee |
| Personal SIPP (active funds) | 0.70% – 1.50% | Higher cost, variable performance |
| Older stakeholder pensions | 0.50% – 1.00% | May have guaranteed annuity rates |
The Power of Compound Growth — Why Starting Early Matters
Compound growth is the most powerful force in long-term pension accumulation. Every year you delay starting a pension has a disproportionate cost:
| Start Age | Monthly Contribution | Growth Rate | Pot at 67 |
|---|---|---|---|
| 25 | £400 | 5% | £795,000 |
| 35 | £400 | 5% | £461,000 |
| 40 | £400 | 5% | £329,000 |
| 45 | £400 | 5% | £224,000 |
| 50 | £400 | 5% | £141,000 |
Assumes no existing pot. Growth rate is net of charges. These are illustrative projections, not guaranteed outcomes.
Investment Choices in DC Pensions
Most auto-enrolment workplace pensions invest in a "default" fund if you don't make an active choice. Understanding your options can significantly affect outcomes:
Default Funds
Most workplace DC schemes use a lifecycle or target-date default fund that gradually de-risks as you approach retirement. In accumulation, these are typically 70–100% equities. Suitable if you don't want to manage your own investments.
Index Trackers
Low-cost passive funds tracking indices like the FTSE All-World or S&P 500. Charges typically 0.07%–0.20%. Long-term evidence shows most active funds underperform their benchmark after charges. Widely available in SIPPs and many workplace schemes.
Ethical / ESG Funds
Funds that screen out companies on environmental, social and governance criteria. Increasingly available in DC schemes. Performance has been broadly comparable to mainstream funds over the last 10 years, though sustainable funds faced headwinds in 2022.
Self-Select
Many SIPPs allow you to choose individual stocks, investment trusts, ETFs and bonds. Greater flexibility but requires investment knowledge. Ensure adequate diversification to avoid concentration risk.
Annuity vs Drawdown: Choosing Your Retirement Income Route
Since pension freedoms in 2015, retirees can choose between annuities, drawdown, or a combination of both:
Annuity Example (2026 Rates)
- Pot: £300,000 at age 65
- Tax-free cash (25%): £75,000
- Annuity purchase from remaining £225,000
- Level single-life annuity rate (2026): approximately 7.1%
- Annual annuity income: £15,975 p.a. guaranteed for life
- Add state pension: +£11,502 = £27,477 total income
Drawdown Example (4% Rule)
- Pot: £300,000 at age 65
- Tax-free cash (25%): £75,000 as lump sum
- Remaining pot: £225,000 in drawdown
- Annual withdrawal at 4% rule: £9,000 p.a.
- Add state pension: +£11,502 = £20,502 total income
- Pot remains invested, potential for growth and inheritance
Sources & Methodology
- GOV.UK – Auto-Enrolment Minimum Contributions
- MoneyHelper – Pension Calculator
- PLSA – Retirement Living Standards
Disclaimer: This calculator produces illustrative projections based on assumed constant growth rates and contributions. Actual pension outcomes depend on investment performance, inflation, charges, and future legislation. Past performance is not a guide to future returns. Always take regulated financial advice for retirement planning decisions.