Retirement Savings Calculator
Retirement planning is compound interest given decades to work. This calculator projects what your current savings and monthly contributions grow into by the time you stop working.
Formula
FV = PMT × [ ((1 + i)ⁿ − 1) ÷ i ]
- PMT = monthly contribution
- i = annual growth ÷ 12
- n = months to retirement
£200 a month at 5% from 35 to 65: £166,452 from £72,000 paid in
What Drives the Outcome
Three inputs decide almost everything: how much you have, how much you add each month, and how long it compounds.
Time is the dominant one. A pound saved at 25 has forty years to grow; the same pound at 55 has ten. This is why starting earlier usually beats saving harder later, and why small increases in your twenties matter disproportionately.
Do Not Ignore the Employer Match
Under UK auto-enrolment, minimum contributions are 8% of qualifying earnings, of which at least 3% comes from your employer. Contributing below the level your employer will match is turning down part of your pay.
Pension contributions also attract tax relief at your marginal rate, so for a higher-rate taxpayer £100 in the pot costs £60 of take-home pay.
Read the Projection Carefully
Any long-range projection assumes a steady growth rate, which real markets do not deliver. It also shows a nominal figure: £500,000 in thirty years will not buy what £500,000 buys now. At 3% inflation it is worth roughly £206,000 in today's money.
Use the projection to compare scenarios rather than to predict a number, and revisit it every few years.
Quick Reference
| Start age | Years | You pay in | Projected pot |
|---|---|---|---|
| 25 | 40 | £96,000 | £305,204 |
| 35 | 30 | £72,000 | £166,452 |
| 45 | 20 | £48,000 | £82,207 |
| 55 | 10 | £24,000 | £31,056 |
Frequently Asked Questions
- How much should I save for retirement?
- A common rule of thumb is to contribute half your age as a percentage of salary when you start, so 15 per cent if beginning at 30. The right figure depends on target income and retirement age.
- When should I start?
- As early as possible. Time in the market matters more than the amount: contributions made in your twenties have decades to compound.
- Does the State Pension count?
- It helps but rarely suffices alone. Check your forecast on GOV.UK, since it depends on your National Insurance record.
- Is the projected figure in today's money?
- No, it is nominal. At 3 per cent inflation, money loses roughly half its purchasing power over 24 years, so discount long-range figures accordingly.