Pension Gap Calculator

Find out if your current pension savings will give you the retirement income you want. See your projected pot, identify any shortfall, and discover how much extra you need to save.

Your pension gap is the difference between what your current savings are on track to provide and what you will actually need in retirement. If you want £25,000 a year in retirement income and your pension is projected to deliver £18,000, your gap is £7,000 per year — and the earlier you know about it, the easier it is to close.

Most people underestimate how much they need saved. A general rule of thumb is that you need a pension pot of roughly 25 times your desired annual income (assuming a 4% drawdown rate). So £25,000 a year requires a pot of around £625,000. That sounds like a lot, but compound growth and employer contributions do most of the heavy lifting if you start early enough.

The Pensions and Lifetime Savings Association estimates that a single person needs £31,300 per year for a moderate retirement lifestyle (PLSA Retirement Living Standards, 2024). Use this calculator to see whether your current contributions will get you there, and how much extra you would need to save to close any gap.

How to check your pension gap

  1. Enter your current age, target retirement age, and existing pension pot
  2. Add your monthly contributions and expected employer match
  3. Set your desired annual retirement income
  4. See your projected pot, any shortfall, and how much extra to save each month

Written by the CalcStack team · Last updated March 2026

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Frequently asked questions

What is a pension gap?▾
A pension gap is the difference between the retirement income you want and the retirement income your current savings are projected to provide. If you want £25,000 per year but your pension will only generate £18,000, your gap is £7,000 per year.
How does the 4% rule work?▾
The 4% rule suggests you can withdraw 4% of your pension pot each year in retirement without running out of money over a 25-30 year period. For example, a £500,000 pot would provide £20,000 per year. This is a guideline, not a guarantee — actual returns vary.
What is the current UK state pension?▾
The full new state pension is £11,502 per year (2025/26 rate). You need 35 qualifying years of National Insurance contributions to get the full amount. With 10 years you get the minimum, and partial amounts are calculated proportionally.
How much should I have in my pension by age 40?▾
A common rule of thumb is to have 3x your annual salary saved by age 40. So if you earn £40,000, aim for £120,000 in your pension. However, the right amount depends on your target retirement income and when you plan to retire.
Does this calculator include employer contributions?▾
Yes. You enter both your personal monthly contribution and your employer's monthly contribution separately. Both are included in the growth projection. Under auto-enrolment, the minimum employer contribution is 3% of qualifying earnings.
What growth rate should I assume?▾
A 5% annual growth rate is a reasonable default for a balanced pension fund after fees. Conservative funds might return 3-4%, while aggressive equity-heavy funds might average 6-8% over long periods. Past performance does not guarantee future returns.
What happened to the lifetime allowance?▾
The lifetime allowance (LTA) was abolished from April 2024. However, some tax charges on lump sums above the old threshold (£1,073,100) still apply. The calculator flags if your projected pot exceeds this level for awareness.
Can I use this for a SIPP or workplace pension?▾
Yes. This calculator works for any defined contribution pension — workplace pensions, SIPPs, personal pensions, or a combination. Simply enter your total current pot value and total monthly contributions across all schemes.
How accurate is the projection?▾
The projection uses compound growth with constant assumptions. Real investment returns fluctuate year to year. Use this as a planning tool to understand the ballpark, not as a guarantee. Review and recalculate regularly as your circumstances change.
Should I pay more into my pension or invest elsewhere?▾
Pension contributions benefit from tax relief (20-45% depending on your rate) and employer matching. However, you cannot access pension money until age 55 (rising to 57). For flexibility, consider ISAs alongside pensions. Seek professional advice for your specific situation.

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