How much is my pension worth?

If you’re already planning for retirement and have been steadily paying into a personal pension, it can be difficult to understand how long it will fund the lifestyle you want in retirement when you do stop working. In this article, we look at how to find out what your pension’s worth so you can calculate if it’s enough to live the retirement you want.

Updated: 29.07.26

By Paul Steed

This content was factually correct when written but may not reflect current developments or information.

How to find out what your pension is currently worth

The type of pension you have will influence how much your pension is worth at retirement. The two main types of pensions are:

Defined contribution (DC)

A defined contribution pension - often called a money purchase scheme - is where you, and potentially your employer, pay regular contributions into a pension. These funds are invested, and your eventual retirement income is based on how much was paid in and how those investments perform.

As funds are invested, the final value of your pension pot can fluctuate. Other factors that affect DC pensions include your age at retirement and the level of risk you’re willing to take when investing.

Defined benefit (DB)

Defined benefit schemes guarantee a certain income at retirement based on your salary and how long you’ve been with your employer. Final salary pensions are a type of DB scheme.

If you have a defined benefit pension and you want to transfer it to a defined contribution scheme, you’ll be given a ‘cash equivalent transfer value’ or CETV for short. The CETV is calculated by your DB scheme provider and is equivalent to the cash value you would receive from the pension at retirement. You won’t receive this amount as a lump sum; it’s usually transferred directly from your old scheme into the new one, which you can then access at retirement age.

You’ll normally need to receive professional financial advice if you wish to explore this option as you could be giving up valuable guarantees and you’ll need to remember that once you’ve left a DB scheme, you cannot go back into it.

Tracing lost pensions

If you’ve lost track of various pensions over the years, you can use the government’s free pension tracing service. Head to: GOV.UK/Find pension contact details.

If you’ve accumulated several pensions, you may want to read our guide to pension consolidation.

How much monthly income will my pension pot generate?

Income from a defined contribution pension will depend on how you decide to use your pension pot, for example, whether you choose a drawdown model or decide to buy an annuity.

If you choose to drawdown your pension, you’ll withdraw a certain amount each year and keep the rest invested. Depending on the markets, your funds could continue to grow (though remember this isn’t guaranteed, and investments can go down as well as up).

Alternatively, you can use your funds to buy an annuity. This provides you with a guaranteed income, typically for the rest of your life. The annuity can be fixed or index-linked, meaning it will increase with inflation throughout your retirement.

To give you an idea of how much your pension might be worth, we’ve put together some examples. These assume:

You qualify for the full State Pension, which is currently £12,547.60 (£241.30 per week).
You’re 66 years old (please note, the State Pension age is rising to 67)
You drawdown 4% of your pension each year.

What is a £100,000 pension pot worth per month?

Annual income (without the State Pension): £4,000 (£333 per month)
Annual income including the State Pension: £16,547.60 (£1,379 per month)

What is a £300,000 pension pot worth per month?

Annual income (without the State Pension): £12,000 (£1,000 per month)
Annual income including the State Pension: £24,547.60 (£2,046 per month)

What is a £500,000 pension pot worth per month?

Annual income (without the State Pension): £20,000 (£1,667 per month)
Annual income including the State Pension: £32,547.60 (£2,712 per month)

Figures have been rounded to the nearest pound.

It’s important to remember that if you withdraw a 25% tax-free lump sum from your pension at retirement, these values will be reduced accordingly. These figures also don’t account for the potential investment returns you’d receive while the remainder of your pension remains invested.

Please note, the pension income figures detailed above are gross and will be taxed in the same way as earned income.

What is the 4% rule?

The 4% rule in pension planning is a model for calculating withdrawals from your pension fund. It assumes that you’ll drawdown 4% of your pension each year (plus a little extra for inflation). In theory, this model predicts your money could last around 30 years.

The 4% rule should be used only as a very rough guide to pension planning, and it doesn’t account for individual circumstances. For example, 4% may not be enough to live the lifestyle you want, and if your pension fund is small, it might not last 30 years.

If you’d prefer a more accurate measurement, it’s worth speaking to one of our independent financial advisers. They’ll be able to take you through various scenarios using cashflow modelling to demonstrate what different amounts look like in real terms each month or year.

Are your retirement savings on track?

How much you need depends on the retirement lifestyle you want. If you’re concerned about how long your pension might last, you can take a look at the Retirement Living Standards website. The information provided shows you how much life during retirement could cost, based on three levels of spending (minimum, moderate, comfortable).

For example, at the minimum standard of spending, a two-person household would need £22,500 per year. This would cover the cost of basics and leave you with a little extra spending money. A moderate-spending couple would need £45,400 per year, and living a comfortable lifestyle would cost a couple £62,700 per year. Bear in mind that, provided you qualify, the State Pension will contribute towards this, which means you don’t need to have the full amounts outlined in a private pension alone.

Avoiding the 40% and the 60% trap

When you take money out of your pension, you could be liable for 40% Income Tax if your total income falls into the higher rate tax bracket (from £50,271).

The 60% Income Tax bracket applies to anyone taking home between £100,000 and £125,140, as your tax-free personal allowance (currently £12,570) reduces as your earnings increase. The impact of being taxed at the higher rate and losing some of your personal allowance means you’re essentially taxed 60p for every £1 you earn.

If you have a large pension, you can avoid this by adjusting your withdrawals so they are below these thresholds (below £50,270 or £100,000).

Don’t forget that you can withdraw 25% of your pension tax-free (up to £268,275) when you reach age 55 (rising to age 57 in 2028). The remaining 75% is liable for tax.

Speak with an expert for tailored advice

It’s often tempting to put off pension planning, especially if you’re also concerned that you’re not saving enough, but an independent financial adviser can help you make sense of what might seem daunting.

At Alan Boswell Group, we can help you work out your goals for later life and how much you’ll need in retirement. We can also talk you through your options if you want to understand generational wealth management in more detail and how to secure your family’s financial future.

To speak to an expert, call us on 01603 967967.

The value of investments and any income from them can go down as well as up and you might not get back the original amount invested. The past is not a guide to the future. The value of tax benefits depends on your individual circumstances. Tax laws can change.

Need help with your financial planning?

If you’d like to find out more about retirement planning, get in touch with one of our experienced independent financial planning experts.

Speak to us: 01603 967967

How much is my pension worth?

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