How the retirement figures are worked out

What the Retirement projection in Oxygene Finance assumes, where its figures come from and what it leaves out. It describes how a projection is made from the figures you enter. It is not a forecast, and it does not tell you what to do.

One projection, in today’s money

Everything is in today’s money: £50,000 at 70 means what £50,000 buys now.
Your money is split by when it can be reached: money you can get to now (ISAs, a general investment account, savings and cash), pensions, and a Lifetime ISA from 60. A year that cannot be paid from what is reachable is a shortfall, even when the total is large. The years between stopping work and the pension are called the bridge.
The projection runs one year at a time to 95 unless you change it. Each year’s balances are taken before that year’s spending; growth is added after the spending, and saving at the end of the year.
The same projection gives the answer on the Retirement page, the year-by-year table, the simulations, the comparisons and the searches. Ten made-up households are checked by hand against it to the pound.

Returns, inflation and costs

Each kind of asset has its own assumption before inflation: shares 7% a year unless you change it, bonds and gilts 4.5%, cash your own cash rate (3% unless you change it), Premium Bonds 3.80% (NS&I prize fund rate from the July 2026 draw; an average, most holders receive less), and gold no more than inflation.
Each pot earns the blend of what its accounts hold. An account with no holdings recorded is counted at the rough mix you gave it, or a balanced mix if you have not said.
Inflation is 2.5% a year unless you change it. Returns are turned into real returns by compounding (Fisher), not subtraction.
Costs (platform and fund charges, 0.35% a year unless you change them) come off invested money’s return before inflation. Cash and Premium Bonds carry no charge. The Retirement page shows what the costs take in pounds: the plan run as it is and again with no costs, compared at the end.
The year-by-year table grows at the median rate, a little below the average, because returns that vary compound to less than their average. The middle line of the simulations follows the same rate.

Simulations

The chance the money lasts comes from up to 2,000 simulated futures. Each year’s return is drawn at random around the assumption (lognormal), independently of other years.
How much each pot swings comes from its mix: shares swing more than bonds, cash hardly at all. Shares and bonds are assumed to move together a little (a correlation of 0.2).
Inflation is fixed in every simulation unless you let it vary. Then it varies by about 1.5 percentage points a year, and is more often high in years when returns are poor.
Four built bad starts sit beside the simulations: a fall in the year work stops, a flat decade, two bad years, and inflation above the assumption.

Spending rules

Fixed: the same spending every year after inflation, with any stages you add.
Guardrails (after Guyton and Klinger): when the share of reachable money being withdrawn rises more than 20% above where it started at retirement, spending is cut by 10%; when it falls 20% below, spending is raised by 10%, but not after a losing year and not above 30% over the plan. The rule is not relaxed in the last years of the plan. The page reports the cuts and the lowest year as well as the chance.
Variable percentage: each year’s spending is the balance spread over the years left, as a level payment at the expected return. It cannot run out by its own rule, so the spending path is the thing to read.

Tax

Income tax uses the 2026/27 rates, per person, each with their own Personal Allowance (£12,570) and bands, at Scottish rates for a Scottish taxpayer. Pension withdrawals are split by who owns each pot.
A quarter of each pension withdrawal is tax-free until the Lump Sum Allowance (£268,275) is used; the rest is taxed as income.
Capital Gains Tax is charged on the general investment account share of each withdrawal, from the recorded cost, after each person’s annual exempt amount. Interest on cash is taxed every year after the savings allowances.
Thresholds fixed in cash shrink in today’s money: the Personal Allowance and basic rate limit until 5 April 2031, then assumed to rise with prices; the Lump Sum Allowance, the Capital Gains Tax exempt amount and the savings allowances for good.
By default the pots are drawn by access age: money you can get to first, then the pension, then the Lifetime ISA. A tax-aware order takes pension income up to each person’s remaining Personal Allowance first. The page shows the income tax under both, whichever is chosen.
The estate at the end of the plan is estimated with Inheritance Tax under the rules before and after 6 April 2027, when most unused pensions come into the estate.

Pensions and the State Pension

The minimum age for taking a pension is 55 until 5 April 2028 and 57 from 6 April 2028. People aged 55 or 56 on 5 April 2028 can take pension from 55 before then. Under current law nothing carries on past that date, so the projection reaches their pension at 57. A draft order, not yet made, would let payments that started before 6 April 2028 carry on; with announced and draft changes included, a plan that starts drawing before then reaches the pension from 55, with that condition and a note that it is not yet law shown beside it.
A protected pension age recorded on a pension account (55 or 56 under the 2028 rules, or an earlier age kept from 2006) is used when every pension that person holds carries one. Armed forces, police and firefighter schemes keep 55, and are recorded the same way.
A rise to 58 can be assumed with a switch. Not law. The government has said the minimum pension age should stay around 10 years below State Pension age, which rises to 68, but has set no date or rule for a rise to 58.
The State Pension is the full new rate (£12,548 a year in this tax year) for 35 qualifying years, scaled for fewer, from the State Pension age the law gives your date of birth. National Insurance years stop building when you stop work, unless you record that they continue. A weekly forecast you enter is topped up only for the years you work before stopping, up to the full rate. Each person can set their own State Pension expectations on the Family page instead: a weekly amount or a share of the full rate, the age it starts, the qualifying years expected, how it rises, or not counting it at all. What anyone gets depends on their National Insurance record and on the rules when they reach State Pension age.
Workplace pension saving comes from the employment lines on the Budget page, with tax relief and the annual allowance (tapered for high incomes), into each person’s own pension until they stop work.
Defined benefit pensions are paid from the age you plan to take them, with the scheme’s early or late factors, and their own increases.

Current law, and changes that are not law yet

Every figure follows the law as it stands unless a household switches on “Include announced and draft changes” in Settings. The switch brings in the changes below together, everywhere in the app, and a figure that depends on one says so. The free calculators always use current law.

Pension access for people aged 55 or 56 when the minimum age rises (draft, The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2026, checked 2026-10-06). People aged 55 or 56 on 5 April 2028 who started taking pension before 6 April 2028 could keep being paid after that date. Pension not moved into payment by then would still wait until 57. Current law: From 6 April 2028 the minimum pension age is 57, with no carry-on rule: payments after 5 April 2028 and before 57 could fail the pension rules, even for pension already being drawn.

Some figures rest on assumptions rather than law or announcements. They apply whichever way the switch is set:

Figures for 2027-28 that are not yet set are carried forward from 2026-27. They are set at the Autumn Budget and nothing about them has been announced. Carrying the figure forward is a placeholder, not a forecast of policy, so it is labelled as unconfirmed rather than offered as an announced change.
Years after the last one held use that year’s rates. Nothing is published that far ahead. Each such year says which year’s rates it uses.
Scottish bands after the last Scottish Budget move as the UK thresholds do. The Scottish Rate Resolution sets one year at a time. Without a rule a Scottish taxpayer’s bands would keep their real value while the rest of the UK’s shrank. The Scottish Budget 2026-27 statement that the higher, advanced and top thresholds will be held to 2028-29 agrees with it, but is a statement of intent, not a resolution.
After a freeze ends, thresholds rise with the plan’s inflation figure. CPI uprating once the freeze ends is the law (Income Tax Act 2007 ss.21 and 57; Inheritance Tax Act 1984 s.8). The projection has no CPI forecast of its own, so the plan’s inflation figure stands in for it.
The additional rate threshold and the £100,000 allowance taper move with the Personal Allowance after 2031. No law indexes them; Finance Acts set them in cash. Shrinking them for fifty years would put the additional rate on about £35,000 of today’s money by the 2070s, which no plan should rest on. It is a modelling choice, not an announcement, so the switch leaves it alone.
The State Pension keeps its value in today’s money. The projection runs in today’s money and has no forecast of earnings, so it holds the State Pension level, as if it rose with prices. The law requires the new State Pension to rise at least as fast as average earnings (Social Security Administration Act 1992 s.150A), and the government’s triple lock raises it by the highest of earnings growth, CPI or 2.5%. Over long periods earnings have usually risen faster than prices, so this is the cautious reading. Each person’s State Pension settings on the Family page can choose differently.

What-if scenarios

A household can also pick what-if scenarios in Settings. They are not law and have not been announced: each is a question some people plan around. None is on unless picked, they are separate from the switch for announced and draft changes, and every figure a scenario changes carries its line. The free calculators never use them.

Income tax and Inheritance Tax thresholds stay frozen to April 2033 (hypothetical, checked 2026-10-06). The Personal Allowance, the basic rate limit and the higher thresholds that move with them (and the Scottish bands, which follow them), and the Inheritance Tax nil-rate band, residence nil-rate band and its taper threshold stay at today’s cash figures to 5 April 2033, two years longer than the law says, and then rise with prices. Why it is asked: The income tax freeze has been extended twice before it ended: to 5 April 2028 at the Autumn Statement 2022 and to 5 April 2031 at Budget 2025. The Inheritance Tax bands are fixed to the same date. Nothing about a further extension has been announced. Sources: source 1, source 2, source 3. Shown beside each figure it changes: “What-if, not announced: tax thresholds frozen to April 2033.”
State Pension age rises to 68 between 2041 and 2043 (hypothetical, checked 2026-10-06). People born from 6 April 1974 to 5 April 1975 reach State Pension age on a date between 6 May 2041 and 6 March 2043, set by their month of birth, and people born from 6 April 1975 reach it at 68. Under the law the rise to 68 runs from 2044 to 2046, for people born from 6 April 1977. Why it is asked: The independent report for the 2023 State Pension age review proposed the rise to 68 between 2041 and 2043. The government kept the law’s timetable and said the next review would consider age 68; that third review began in July 2025. The report gave years, not dates, so the steps by month of birth here are the law’s own, moved three years earlier. Sources: source 1, source 2, source 3. Shown beside each figure it changes: “What-if, not law: State Pension age reaching 68 between 2041 and 2043.”

The searches on “When could we stop?”

Each answer runs the same plan again with one thing changed. The earliest age and the highest spending are found by halving the range until the answer is pinned down.
The simulated answers use 500 simulated futures for each try, with the same random draws every time, so two tries differ only in what is being searched. The central answers use the year-by-year projection.
If saving stopped now (sometimes called Coast): work carries on paying the bills until the age you stop, but no more is saved.
Part-time work before the pension (Barista): earnings from the age you stop until the pension can be reached, taxed as income. National Insurance on them is not included.
Other spending levels (Lean and Fat): the Budget items marked essential, the plan’s spending, and a larger budget. The target beside each is the rule of thumb: the spending, less income already flowing when you stop, divided by your withdrawal rate (4% unless you change it, or 3.5% for a retirement longer than 40 years).

What it does not do

Returns are assumptions, not forecasts, and each kind of asset has its own: shares the app's default of 7% a year before inflation and fees unless you change it, bonds about 4.5%, cash your cash rate, Premium Bonds the prize fund rate, and gold no more than inflation. Each pot earns the blend of what it holds, and these move every figure here.
Everything is in today's money. A £50,000 figure at age 70 means £50,000 of today's buying power, not the cash amount you would see.
Tax rules are those of the current tax year. Allowances fixed in cash are shown shrinking in today's money: the income tax thresholds until April 2031 (after which they are assumed to rise with prices), and the Lump Sum Allowance and the capital gains and savings allowances for good. Other announced changes from 2027 onward are not yet projected forward.
Pension withdrawals are taxed as income, per person, split by who owns each pot. A pension not assigned to anyone is split equally between the two of you, which understates the tax if one of you really holds it.
The 25% tax-free lump sum is taken phased — a quarter of each withdrawal, until the Lump Sum Allowance runs out. The allowance is fixed at £268,275 in cash, so in today's money it is worth less every year. Taking it as one lump early instead would change the tax, usually for the worse.
Pension contributions come from the employment lines on the Budget page — your percentage, your employer's, and whether it is salary sacrifice or relief at source — with tax relief, into each person's own pension until retirement. Anything above the annual allowance (tapered for high incomes) is left out rather than charged, and carry-forward of unused allowance is not modelled.
Withdrawals are drawn by access age unless you choose otherwise: money you can get to first, then the pension, then the Lifetime ISA. A tax-aware order, which takes pension income up to each Personal Allowance first, can be chosen under "How the money is drawn"; the results compare the income tax under both orders. Neither order takes account of the April 2027 Inheritance Tax change.
Capital gains tax is charged on the General Investment Account share of each withdrawal, using your recorded cost basis and each person's annual exempt amount. Deliberate harvesting — bed-and-ISA, or realising the exemption every year on purpose — is not assumed, so the real bill is usually lower than this.
Savings interest on the cash share is taxed every year, whether or not you withdraw anything, against the starting rate band and the personal savings allowance.
Where a holding has no cost basis recorded, or the cost and the price are in different units, no gain is assumed and no tax is charged on it. That understates the bill rather than inventing one — Data health lists the holdings concerned.
Spending is flat in real terms for life unless you add staged spending phases. Real retirees typically spend less through their seventies and more in late old age.
The plan ends at a fixed age. It is not weighted by how likely you are to live that long, or by which of you lives longer.
Long-term care costs are not modelled.
Simulated returns are drawn independently each year. Real markets have runs — good and bad years cluster — so genuine tail risk is worse than these bands show.
Inflation is a fixed rate in every run unless you let it vary under "How the money is drawn". Even then it is drawn year by year with no long spells, so a decade like the 1970s is less likely in the bands than it was in history.
Fixed spending does not react to the portfolio. Guardrails or the variable percentage rule, under "How the money is drawn", show a plan whose spending moves with it.
There is no replay of historical market returns, UK or US, and no allocation that changes with age (a bond tent) or cash buffer drawn after bad years. Each pot keeps one mix for life.
Inheritance Tax at the end of the plan is estimated from what is left in the pots, the pension, and property still held, grown at the property return. Company value is not projected and is left out. It is an estimate, not a probate valuation.
The drawdown order still preserves the pension to last. From 6 April 2027 most unused pension funds count towards the estate for Inheritance Tax, so the estate estimate shows the tax under both rules. The order itself is not changed to take account of it.
National Insurance on part-time earnings after you stop is not charged.
There is no comparison yet with other planners. Ten made-up households are checked by hand; a check against a commercial planner is still to be done.

Prices and exchange rates

Investments are valued at the latest price the app holds for each one, converted to pounds where they are priced in another currency. Where a holding has no price feed, the price you enter, or the platform’s own price from an import, is used, with the date it is from.

Prices: Prices are end of day, refreshed each evening and morning. Each one shows the date it is from.
Exchange rates: Source: ECB statistics. Rates in pounds are worked out from the ECB’s euro reference rates for each working day.
Crypto prices: Powered by CoinGecko.

Sources

Tax rates and allowances are kept in one place in the app, each with the page it was checked against and the date. The main ones:

Oxygene Finance provides information, not financial advice. Oxygene Group Ltd, which runs it, is not authorised or regulated by the Financial Conduct Authority (FCA).