DC (Defined Contribution)
A pension where you and your employer contribute to a pot that's invested in the stock market. The final value depends on contributions and investment performance.
DC pensions — including workplace pensions, SIPPs, and NEST — build up a pot of money rather than promising a specific income. You bear the investment risk: if markets do well, your pot grows; if they do badly, it shrinks. At retirement, you choose how to use the pot — drawdown, annuity, lump sum, or a combination.
DC pensions are now the standard for most UK private sector workers via auto-enrolment. The key variables are: contribution rate (yours + employer's), investment choice, fees, and how long you contribute. The biggest controllable factor for most people is the contribution rate.
This calculator provides estimates based on 2025/26 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.