How much income will a £750,000 pension pot give?
Income from a £750,000 pension pot
There are three common ways to turn a pot into income: take regular withdrawals (drawdown), buy a guaranteed income for life (an annuity), or take lump sums as you need them. The table uses simple withdrawal rates. A guaranteed annuity income depends on your age and the rates on offer.
£750,000 pot
| Withdrawal rate | Income a year | Income a month | Of which from the taxable part |
|---|---|---|---|
| 3% | £22,500 | £1,875 | £16,875 |
| 4% | £30,000 | £2,500 | £22,500 |
| 5% | £37,500 | £3,125 | £28,125 |
Before income tax. The 4% figure is a rule of thumb, not a guarantee.
Tax-free cash
Most people can take up to 25% of their pension tax-free. On a £750,000 pot that is £187,500, limited to £268,275 (the lump sum allowance). The remaining £562,500 is taxed as income when you withdraw it, using your tax code and bands.
How long will £750,000 last?
The table shows how many years the pot lasts if you take a fixed amount that rises 2.5% a year with prices, while the rest stays invested. Higher withdrawals and lower returns shorten it quickly.
£750,000 pension pot
| Starting withdrawal | Lasts (4% return) | Lasts (6% return) |
|---|---|---|
| 4% of the pot (£30,000 a year) | 32 years | 57 years |
| 5% of the pot (£37,500 a year) | 24 years | 34 years |
| 6% of the pot (£45,000 a year) | 19 years | 25 years |
| 7% of the pot (£52,500 a year) | 16 years | 20 years |
| 8% of the pot (£60,000 a year) | 14 years | 17 years |
Illustration only. Real returns vary and are not guaranteed.
Adding the State Pension
The full new State Pension for 2026/27 is £241.30 a week, or about £12,548 a year. You need 35 qualifying years of National Insurance for the full amount, and at least 10 to get any. Adding it to a £30,000 income from drawdown gives about £42,548 a year before tax.
How long will the pot last?
A 4% withdrawal rate has historically lasted around 30 years in many market conditions, but it is not guaranteed. Taking more, or investing too cautiously, can run the pot down sooner. Check your plan every year and take regulated guidance such as the free Pension Wise service from age 50.
Sources and further reading
Questions people ask
How much income will a £750,000 pension pot give?
How much of my pension can I take tax-free?
Is it better to take an annuity or drawdown?
Results are estimates for information only, not financial advice. Read the full disclaimer.