Estimate your potential pension fund value based on your current savings, contributions, and expected growth.
Understanding Your Pension Worth
A pension worth calculator is a vital tool for financial planning, helping individuals estimate the future value of their retirement savings. It takes into account your current financial standing, your ongoing contributions, and the anticipated growth of your investments over time. Understanding your projected pension worth allows you to make informed decisions about your savings strategy and retirement goals.
How the Calculation Works
The calculation is based on a future value of an annuity formula, compounded annually. It projects the growth of your current savings and each future contribution.
Current Savings Growth: Your existing pension pot grows each year based on the expected annual growth rate.
Future Value = Current Savings * (1 + Growth Rate)^Years
Future Contributions Growth: Each annual contribution also grows over time. The formula accounts for the fact that later contributions have less time to grow than earlier ones.
The future value of a series of payments (an ordinary annuity) is given by:
FV = P * [((1 + r)^n - 1) / r]
Where:
FV is the Future Value of the annuity
P is the periodic payment (your annual contribution, which increases each year)
r is the interest rate per period (your annual growth rate)
n is the number of periods (the number of years)
Total Pension Worth: The sum of the projected growth of your current savings and the future contributions.
The calculator iteratively adds the new contribution (increased by the annual increase percentage) and applies the growth rate for each year.
Key Inputs Explained:
Current Pension Savings (£): The total amount you currently have in your pension pot.
Annual Contribution (£): The amount you contribute to your pension each year (e.g., from your salary or personal payments).
Annual Contribution Increase (%): The percentage by which you expect your annual contribution to rise each year. This is crucial for reflecting salary increases or planned boosts to your savings.
Expected Annual Growth Rate (%): The average annual percentage return you anticipate your investments will generate. This is an estimate and actual returns may vary.
Number of Years to Pension: The total number of years you plan to continue saving before you access your pension.
Why Use This Calculator?
This calculator is designed to provide a clear, estimated picture of your future pension fund. It helps you:
Assess if you are on track for your retirement goals.
Motivate you to increase your contributions or aim for a higher growth rate.
Understand the long-term impact of compounding and consistent saving.
Make more informed decisions about your financial future.
Disclaimer: This calculator provides an estimation for educational and planning purposes only. It does not constitute financial advice. Actual investment returns may vary, and it is recommended to consult with a qualified financial advisor for personalized guidance.
function calculatePensionWorth() {
var currentSavings = parseFloat(document.getElementById("currentSavings").value);
var annualContribution = parseFloat(document.getElementById("annualContribution").value);
var contributionIncrease = parseFloat(document.getElementById("contributionIncrease").value) / 100; // Convert percentage to decimal
var expectedGrowthRate = parseFloat(document.getElementById("expectedGrowthRate").value) / 100; // Convert percentage to decimal
var investmentYears = parseInt(document.getElementById("investmentYears").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "; // Clear previous results
// Validate inputs
if (isNaN(currentSavings) || isNaN(annualContribution) || isNaN(contributionIncrease) || isNaN(expectedGrowthRate) || isNaN(investmentYears) ||
currentSavings < 0 || annualContribution < 0 || contributionIncrease < 0 || expectedGrowthRate < 0 || investmentYears <= 0) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
var totalPensionValue = currentSavings;
var currentAnnualContribution = annualContribution;
for (var i = 0; i < investmentYears; i++) {
// Add the current year's contribution
totalPensionValue += currentAnnualContribution;
// Apply the growth rate to the total accumulated value
totalPensionValue *= (1 + expectedGrowthRate);
// Increase the contribution for the next year
currentAnnualContribution *= (1 + contributionIncrease);
}
// Display the result
resultDiv.innerHTML = 'Your estimated Pension Worth after ' + investmentYears + ' years: £' + totalPensionValue.toFixed(2).replace(/(\d)(?=(\d{3})+(?!\d))/g, '$1,') + '';
}