How we worked this out

Invested assets grow at 7% a year (nominal)

Pension and stocks & shares are treated as broadly-diversified, long-horizon investments and grown at 7% a year. Long-run global equity returns have historically sat in this region in nominal terms, though they vary enormously from year to year and the future may not resemble the past.

• UBS Global Investment Returns Yearbook (Dimson, Marsh & Staunton) — long-run global asset-class returns.
• Barclays Equity Gilt Study — over a century of UK equity, gilt and cash returns.

Cash grows at 4.5% a year — never the equity rate

Cash is grown at a separate, lower rate. It’s set closer to what a decent easy-access or cash ISA rate looks like in practice — still well short of equities over the long run, but not as punishing as treating it as static. Blending cash into the equity rate would flatter the picture, so we don’t.

• Bank of England — Bank Rate for the short-term rate cash broadly follows.

Pension contributions — yours if you give them, assumed if you don’t

Pension only grows from the balance you enter unless you also give it a monthly contribution. If you enter one directly, that figure is used exactly. If you leave it blank but give your annual income instead, we assume a typical 6% employer + 6% you split of that income and say so plainly wherever it’s used — it’s a stand-in for a number you haven’t told us, not a recommendation. Give neither, and the tool says so clearly next to your result rather than quietly assuming nothing forever.

Compounding and contributions

Balances compound monthly. Monthly contributions to investments and to pension are each added to their own pot every month and compounded to age 60. The annual rates above are converted to their exact monthly equivalents, so “7% a year” means 7% a year.

These are nominal figures

Numbers are nominal — not adjusted for inflation. £100 at 60 will buy less than £100 today. We show nominal figures because they’re the numbers you’ll actually see on a statement; just read them knowing inflation is working in the background.

What we deliberately don’t model

To stay honest about its limits, this tool ignores tax relief and tax on withdrawals, product charges, the State Pension, and the order in which returns arrive (sequence risk). It’s a clear-eyed sketch of a trajectory, not a financial plan — and it makes no comparison to anyone else.