Accurate Pension Calculator

tony4147

Looking for a reasonably accurate pension calculator. I've looked at several HL, Pen Advisory, Std Life, Aviva and I'm getting very, very different results.
Can anyone recommend one?

BLB53

I use the one on Candid Money - several options
http://www.candidmoney.com/calculators/

dunstonh

There is no such thing as an accurate pension calculator. All will be based on assumptions as there are too many unknown variables. Many will allow you to select the assumptions whilst others will use predetermined ones.

You have investment return (which should reflect the types of investment return.
inflation
indexation
SMPI basis (todays terms) or monetary basis (future terms).
You then have different annuity rate assumptions (single life, 50% spouse, 66% spouse, 100% spouse. Then level or increasing and the increasing but use different levels of indexation. With or without tax free cash etc).

The reason you get different results is due to different figures being input. Not because one is more accurate than another. They will all be accurate to the data input. Whether the assumptions are reasonable or suitable is a different matter.

tony4147

dunstonh wrote: »

There is no such thing as an accurate pension calculator. All will be based on assumptions as there are too many unknown variables. Many will allow you to select the assumptions whilst others will use predetermined ones.

You have investment return (which should reflect the types of investment return.
inflation
indexation
SMPI basis (todays terms) or monetary basis (future terms).
You then have different annuity rate assumptions (single life, 50% spouse, 66% spouse, 100% spouse. Then level or increasing and the increasing but use different levels of indexation. With or without tax free cash etc).

The reason you get different results is due to different figures being input. Not because one is more accurate than another. They will all be accurate to the data input. Whether the assumptions are reasonable or suitable is a different matter.

I have inputted the same figures on all of them and have very different results.

Lokolo

tony4147 wrote: »

I have inputted the same figures on all of them and have very different results.

Including inflation rates, growth rates and annuity rates?

tony4147

Lokolo wrote: »

Including inflation rates, growth rates and annuity rates?

The majority of them you don't enter that information, usually DOB, Existing Pen, Existing Contributions, Pen for spouse, index linked etc.

dunstonh

tony4147 wrote: »

The majority of them you don't enter that information, usually DOB, Existing Pen, Existing Contributions, Pen for spouse, index linked etc.

Consumer ones tend to be basic and dont allow many edits. So, that should be expected.

I have inputted the same figures on all of them and have very different results.

But you have only had a limited selection of info to input. All the rest will be chosen for you and those will be different. They should disclose their assumptions though.

sandsy

Most calculators use the same rate for price inflation (2.5%).
However, they will use different assumptions for future investment returns, with 5% or 7%, being most common but anything in between being considered fair game.
Most will make assumptions that your contributions will grow in line with salary inflation for which the most common assumptions are 2.5% (SMPI basis) or 4% (FSA basis).

They will then make different assumptions about the annuity format, eg. Whether it has a spouse's pension attached, if so, what %, and whether it increases each year automatically.

The big thing to watch out for is how the results are presented. Two calculators could have exactly the same assumptions but if one presents the results in today's terms and one presents them in money terms, the outcome will be very different, particularly the further you are away from retirement.