£400,000 pension pot: what it pays, and how much of it the bridge costs
Retiring at 50 on £400,000 spends 55% of the pot before the State Pension arrives at 67. What survives matters less than you would think, because from 67 the State Pension supplies roughly 63–89% of your income — the pot is topping up a state benefit rather than the other way round. The planning question at this size is how cheaply you can cross the 17-year gap.
On our assumptions £400,000 does not reach the £32,700 the PLSA links to a moderate single-person retirement at any age in this range — it supports a ‘minimum’ standard throughout. Closing that gap needs a bigger pot, a later finish, or a lower target.
£400,000 by retirement age
Every figure below is the highest income the pot can sustain while still lasting to age 95, net of tax and in today’s money. Pick an age for the year-by-year projection, the tax profile and the assumptions behind it.
Other pot sizes
Same assumptions, different starting pot — useful if you are still building and want to see what another £50k or £100k actually buys you.
What this means as a withdrawal rate
£400,000 draws 5.2% in the first year retiring at 50 and 6.4% retiring at 60 — either side of the 4% rule rather than far from it. This is the pot size at which conventional withdrawal-rate reasoning starts to apply properly, because the pot is genuinely being asked to last rather than to bridge.
Worth knowing what the 4% rule leaves out: it takes no account of the State Pension, which on this plan supplies 63–89% of income from 67. Applied literally to a UK pot it is therefore conservative — you can draw harder in the bridge years precisely because a second income starts later.
Tax is the binding constraint at this size
Across the ages on this page, £400,000 pays between £128,000 and £220,000 in income tax over the whole plan, and some years cross into the higher-rate band. That is not a rounding error against the pot itself, and unlike growth it is substantially within your control.
Three levers move it. A quarter of each pension withdrawal is tax-free, so the order you draw wrappers in changes the bill; the years before the State Pension starts have an unused personal allowance in them that is gone if you do not use it; and once the State Pension arrives it absorbs most of that allowance permanently, so income deferred into those years is taxed harder than income taken before them. Our calculator prices all three against your actual numbers.
Your pension becomes an ISA by age 55
On the optimised plan the SIPP inside £400,000 is emptied by age 55 — 5 years of retiring at 50 — and the ISA grows to £247,718 over the same period. The pot is not running out: the money is moving wrapper to wrapper, and the reason is tax.
In the years before the State Pension starts you have a personal allowance and a basic-rate band doing nothing. Drawing the pension down then — faster than you need to spend it, and re-sheltering the surplus in an ISA — uses that allowance while it is free. Leave the money in the SIPP instead and it is still taxable later, except that by then the State Pension has absorbed the allowance and every pound is taxed from the first. At £400,000 the SIPP is too large to move in one or two years without pushing into a higher band, so the plan spreads it over 5 — which is why the retirement age and the conversion window interact.
This is the single biggest lever the calculator finds that a spreadsheet usually misses, and it is worth £92,000 or so across the age range on a pot this size.
What the next £100,000 would buy
Going from £400,000 to £500,000 adds about £3,500 a year retiring at 50, and £4,100 a year retiring at 60. Put the other way, that extra £100,000 pays itself back as income over roughly 25 years of retirement.
Compare that with what the same effort buys through the retirement age instead: one more year of work is worth about £500 a year on this pot. On those numbers the extra saving is the stronger lever, which is unusual and specific to this pot size. See £500,000 in full →
What waiting is worth
Every year you delay is a year you are not funding from the pot and a year of bridge you no longer have to cross, which is why the gain compounds rather than accumulating. On £400,000 the difference between stopping at 50 and stopping at 60 is about £4,700 a year — roughly £500 for each year waited, on identical savings.
At this pot size that arithmetic dominates everything else on the page. No plausible change in investment growth moves the outcome as much as the retirement age does, because the binding constraint is the length of the unfunded gap, not the return on the money.
Questions people ask
How much income will a £400,000 pension pot give me?
Retiring at 50, about £20,900 a year sustainably to age 95. Retiring at 60, about £25,600 — £4,700 a year more for the same money, because it funds 10 fewer years and bridges less time before the State Pension.
Is £400,000 enough to retire on?
Not for a moderate retirement at these ages, on our model. Measured against the PLSA's £32,700 moderate benchmark for a single person, £400,000 falls short across the whole range. It exceeds the PLSA minimum standard at every age shown.
How much of £400,000 does retiring early actually cost?
Retiring at 50 rather than waiting spends 55% of the pot before the State Pension even starts. The 17 bridge years are the expensive ones because your pots are the only income in them — that single figure explains most of the £4,700 spread on this page.
Does the State Pension change the picture?
Decisively at this pot size. The full new State Pension is about £11,502 a year in today's money from age 67, and it provides roughly 63–89% of income once it starts. Before it, £400,000 carries everything; after it, it only tops up the difference. That asymmetry is why retiring later stretches the same pot so much further.
Run your own numbers
This page uses one fixed set of assumptions. Your real plan has your pots, your State Pension record, DB pensions, rental income and one-off events. See it modelled year by year with a free annual check-up.
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