SIPP Calculator (UK)
Estimate the future value of your Self-Invested Personal Pension (SIPP) and a potential retirement income, factoring in tax relief, fees, growth and inflation.
How this SIPP calculator works
This tool models your Self-Invested Personal Pension (SIPP) using standard compound‑interest formulas. It combines:
- Your current SIPP balance
- Regular monthly contributions (including tax relief and employer payments)
- Expected investment return minus fees
- Inflation, to show results in today’s money
1. Time to retirement
First we calculate how many years your money is invested:
2. Effective annual return after fees
You enter an expected gross annual return and an annual fee level. The calculator subtracts fees to get a net growth rate:
where \( r_{\text{gross}} \) and \( f \) are expressed as decimals (e.g. 5% = 0.05).
3. Monthly contributions and tax relief
If you enter a net personal contribution (what leaves your bank account), we gross it up for tax relief:
where \( t \) is the tax relief rate (e.g. 25% for basic‑rate relief at source).
Employer contributions are added on top. Contributions can optionally increase each year by a fixed percentage.
4. Future value of your SIPP
The projected pot at retirement is the sum of:
- The future value of your current SIPP balance
- The future value of a growing series of monthly contributions
\( FV_{\text{pot}} = P_0 \times (1 + r_{\text{net}})^n \)
Regular contributions (simplified constant contribution version):
\( FV_{\text{contrib}} = C_{\text{month}} \times \frac{(1 + r_m)^{12n} - 1}{r_m} \)
where \( r_m = (1 + r_{\text{net}})^{1/12} - 1 \).
In the actual calculator we simulate year by year, allowing contributions to rise annually by your chosen percentage.
5. Adjusting for inflation
To show results in today’s money, we discount the nominal pot by your inflation assumption:
where \( i \) is the annual inflation rate.
6. Estimating retirement income from your SIPP
Finally, we estimate a sustainable annual income using your chosen withdrawal rate:
where \( w \) is the withdrawal rate (e.g. 4% = 0.04).
This is a rule‑of‑thumb only. In practice, your safe withdrawal rate depends on market returns, how long you need the income to last, and how flexibly you can adjust withdrawals.
Understanding SIPP assumptions and limits
This calculator is designed for typical UK SIPP savers and makes several simplifying assumptions. It does not model every HMRC rule in detail.
- It assumes contributions remain within the annual allowance and any tapering or money purchase annual allowance (MPAA) is handled by you.
- It does not cap tax relief at your relevant UK earnings.
- It does not model the 25% tax‑free lump sum or income tax on withdrawals.
- It assumes a constant average return each year, which is not how markets behave in reality.
Use the results as a planning guide, not as a guarantee. For personalised advice, speak to a regulated financial adviser.
Tips for using the SIPP calculator effectively
- Run multiple scenarios: Use the cautious, balanced and adventurous tabs to see a range of outcomes.
- Stress‑test fees: Try 0.3% vs 1.5% fees to see how charges compound over decades.
- Model pay rises: Add a 2–3% annual increase in contributions if you expect your income to grow.
- Check affordability: Compare the suggested contribution level with your monthly budget.
Important disclaimer
This SIPP calculator is for information and educational purposes only and does not constitute financial advice, tax advice or a personal recommendation. Tax treatment depends on your individual circumstances and may change in future. Investment values can fall as well as rise, and you may get back less than you invest.
Frequently asked questions
What is a SIPP?
A SIPP (Self-Invested Personal Pension) is a type of UK personal pension that gives you control over how your retirement savings are invested. You can choose from a wide range of assets (funds, shares, ETFs, investment trusts and more), within a tax‑advantaged wrapper. Contributions normally receive tax relief, and investments grow free of UK income and capital gains tax inside the SIPP.
How accurate is this SIPP calculator?
The calculator uses standard compound‑growth maths and your assumptions for returns, fees, inflation and contributions. It does not predict future market performance or guarantee outcomes. Use it to explore “what‑if” scenarios and sense‑check your plans, not as a precise forecast or a substitute for regulated financial advice.
What investment return should I assume?
There is no single correct figure. Historically, diversified equity‑heavy portfolios have delivered higher long‑term returns but with more volatility. Many planners model real (after‑inflation) returns of around 3–5% per year. You can use the built‑in cautious, balanced and adventurous scenarios as a starting point, then adjust based on your risk tolerance and investment mix.
How does the calculator handle tax relief?
By default, the tool assumes you enter the net amount you pay from your bank account. It then applies a tax‑relief uplift (25% by default) to get the gross contribution that lands in your SIPP. If you are a higher‑ or additional‑rate taxpayer and reclaim extra relief via self‑assessment, you can approximate this by increasing the tax‑relief rate or by modelling the extra relief as additional contributions.
Can this calculator tell me how much I need to contribute?
This version focuses on projecting your pot and income from the contributions you enter. To work backwards from a target retirement income, you can experiment by adjusting the monthly contribution until the projected income matches your goal. A future enhancement may add a direct “required contribution” solver.