Case studies

A man aged 40 years old, who plans to retire at 65
The current value of his pension fund is £60,000
His monthly contributions, net of basic rate tax, to his pension are £250

The value of his pension at retirement will be £683,565
The value of his pension at retirement if the government had not removed the tax break on pension dividends in 1997 would have been £807,399
Fund shortfall = £123,834
He will have to work an additional 26 months to make up the shortfall or will have to increase his monthly contributions by £95 which is 38%

A woman aged 45 years old, who plans to retire at 65
The current value of her pension fund is £100,000
Her monthly pension contributions (net of basic rate tax) are £500

The value of her pension at retirement will be £835,645
The value of her pension at retirement if the government had not removed the tax break on pension dividends in 1997 would have been £953,501
Fund shortfall = £117,856
She will have to work an additional 20 months to make up the shortfall or she will have to increase her monthly contributions by £143 which is 28%

A man aged 50 years old, who plans to retire at 68
The current value of his pension fund is £150,000
His monthly pension contributions (net of basic rate tax) are £1000

The value of his pension at retirement will be £1,231,613
The value of his pension at retirement if the government had not removed the tax break on pension dividends in 1997 would have been £1,376,288
Fund shortfall = £144,675
He will have to work an additional 16 months to make up the shortfall or he will have to increase his monthly contributions by £213 which is 21%

Please read the Assumptions and Important Notes to understand the numbers used in these calculations