How Long Will My Pension Last?
A Realistic UK Guide With Numbers
"How long will my pension last?" is the question everyone approaching retirement wants answered. The honest answer is: it depends on more variables than most people realise. But we can give you a realistic framework — with real numbers.
The Key Variables
Your pension's longevity depends on five main factors:
- Pot size — how much you have when you start drawing
- Annual withdrawals — how much you take, and whether it grows with inflation
- Investment returns — what your pot earns while you're drawing from it
- State pension — when it starts and how much it reduces your pot withdrawals
- Tax — income tax reduces your effective take-home from each withdrawal
Rough Estimates by Pot Size
The table below uses realistic UK assumptions: 4.5% nominal growth, 2.5% inflation, state pension starting at 67 (£12,548/year, 2026/27). Withdrawal amounts are before tax.
| Pot Size | Annual Withdrawal | Withdrawal Rate | Estimated Duration |
|---|---|---|---|
| £250,000 | £12,000 | 4.8% | 25–30 years |
| £250,000 | £18,000 | 7.2% | 15–18 years |
| £500,000 | £20,000 | 4.0% | 30+ years* |
| £500,000 | £30,000 | 6.0% | 20–25 years |
| £750,000 | £30,000 | 4.0% | 30+ years* |
| £1,000,000 | £40,000 | 4.0% | 30+ years* |
*Assumes retiring at 60, state pension starting at 67. Figures are illustrative — actual duration depends heavily on market conditions. Run the calculator for your specific situation.
The State Pension Changes Everything
One of the most underappreciated factors is the state pension. At £12,548/year (2026/27), it can reduce the amount you need to draw from your pot by a meaningful amount.
If you retire at 60 and your state pension starts at 67, you have a 7-year "bridging period" where you're entirely reliant on your private pension. Plan for this. Many people underestimate how much they need to draw in those early years.
Impact of State Pension on a £500k Pot
Without state pension (years 1–7): drawing £30k/year from pot
With state pension (years 8+): drawing only £18,500/year from pot (state pension covers the rest)
Result: pot could last 6–8 years longer than without state pension.
The "Safe" Withdrawal Rate in the UK
You've probably heard of the 4% rule — withdraw 4% of your pot in year one, then adjust for inflation each year. For US retirees with US tax rules, this had a 90%+ success rate historically.
For UK pension holders, UK tax complexity means a more conservative 3–3.5% is often more appropriate. On a £500,000 pot, that's £15,000–£17,500/year from the pot — supplemented by state pension later.
Why You Need More Than One Number
"Your pension will last 28 years" is only one possible outcome. Markets are unpredictable. A better question is: "In what percentage of realistic market scenarios does my pension last to age 90?" That's what Monte Carlo simulation tells you.
A 75–80% probability of success means you're well-positioned. A 50% probability means there's a coin-flip chance you run out — and you should reconsider the plan.