Assumptions
Everything we assume, and why
Every Plan prints its own assumptions. Here they are in public, before you buy anything — because a projection you can't interrogate is just a number somebody told you.
Every Plan prints its own assumptions. Here they are in public, before you buy anything — because a projection you can't interrogate is just a number somebody told you.
A lifetime projection is not a prediction. It's a map of what follows from a set of assumptions — and if you don't know what those are, you can't tell whether the answer means anything.
Plenty of firms treat their assumptions as proprietary. We think that's backwards: the assumptions are the thing you should be arguing with. If you disagree with one, say so and we'll run it your way. That's the point of writing them down.
Every figure in your Plan is in today's purchasing power. So “£3,600 a month” means what £3,600 buys now, not a number that looks enormous in 2050 and buys the same weekly shop.
Which means we never have to guess at inflation separately. If you assume 5% growth and 2% inflation, that's the same plan as 3% real growth — and the second is harder to fool yourself with.
A common working assumption for a mixed portfolio over a long period. It is not a promise and it is not what any particular investment will do. Some years will be far better, some far worse, and that variation is modelled separately.
Money in cash is assumed to roughly keep pace with inflation and no more. Over thirty years that matters enormously, and it's why holding everything in cash shows up as a risk rather than as safety.
The single most uncomfortable assumption, and the one people most want to skip.
We run every projection to age 100 rather than to an average life expectancy. Average is the wrong tool here: roughly half of people outlive it, and the whole point of the exercise is to find out whether you're one of the ones who runs out. Planning to an average means planning to be fine about half the time.
Where there's a couple, we model both, and we test what happens when one of you lives well beyond the other. That's not morbid — it's usually the difference between a plan that survives and one that doesn't, because household spending falls by much less than half when one person dies while a lot of pension income can fall by more.
Get the tax wrong across seventy years and every number after it is fiction. So the engine applies it properly, year by year.
Personal allowance £12,570, higher rate from £50,270, additional rate from £125,140, and the allowance taper above £100,000. Scottish bands where they apply — that's a real difference and most simple calculators ignore it entirely.
Charged where it's actually due, which for most people means it stops mattering at State Pension age — a detail that quietly improves a lot of projections.
Annual allowance of £60,000 with the taper for high earners, 25% tax-free cash capped by the lump sum allowance of £268,275, and the rest taxed as income when drawn.
Nil-rate band £325,000, residence nil-rate band £175,000 with the taper above £2m, transferable bands between spouses, and the 36% rate where 10% or more goes to charity.
Tax rules change, and over a forty-year projection they will change a lot. We model today's rules throughout because inventing future ones would be guessing dressed up as arithmetic. That's a limitation, we'd rather say it than hide it, and it's one of the reasons the plan is worth re-running.
A single projection assumes smooth growth. Real markets don't do that, and the order the good and bad years arrive in matters enormously.
So the same plan is run two thousand more times with those years reshuffled — same money, same goals, different luck — and you're told in how many of them the money lasted. That number isn't a probability of anything happening in the real world. It answers one question: how much does this plan depend on getting lucky?
The randomisation is seeded, which means a quoted success rate is the same tomorrow as it was today. That matters when the document promises every assumption is printed.
We can model spending falling through retirement if you want it to — most people's does, then rises again if care is needed. But it's your assumption to make, not ours to impose.
Businesses, second properties, anything with a buyer attached: modelled at zero as standard, then again at your figure. The gap tells you how much rests on it.
Never assumed unless you ask, and even then we show you the plan without it. Plans built on someone else dying are uncomfortable and unreliable in equal measure.
We don't model a specific fund, provider or policy, because recommending one is regulated advice we're not authorised to give.
Every one of these is printed in your document with the figure used, and you can change any of them and have it re-run. The free tool lets you push the growth rate around yourself to see how much it moves the answer — usually less than people expect, which is itself worth knowing.
Because it is a working assumption rather than a forecast, and an optimistic one flatters every plan it touches. Three per cent is quoted above inflation, so it already assumes your money grows in real purchasing power rather than only in nominal pounds. If you would rather see four per cent, or two, say so and we will run it. The genuinely useful exercise is usually looking at all three together, because the spread tells you something the middle figure on its own cannot. A plan that still works at two per cent is robust. A plan that only works at four is relying on an outcome you have no control over, and that is worth knowing before you commit a retirement date to it.
It is deliberately cautious, yes. The alternative is planning to an average life expectancy, and roughly half of all people outlive an average, which makes it a strange thing to aim at. The consequence of being wrong in that direction is running out of money in your late eighties with almost no way left to fix it, at an age when returning to work is not available and cutting spending means cutting things that matter. The consequence of being wrong the other way is leaving rather more behind than you intended. Those two errors are not equivalent in weight, so we plan for the one you cannot undo. If you also want to see the numbers to 90, we will show you both.
They will, and over a forty-year projection they will change repeatedly. We model today's rules throughout, because inventing future ones would be guessing with extra arithmetic wrapped around it. That is a real limitation and we would rather write it down than bury it. Two things make it manageable. The first is that the rules which matter most to a long projection, meaning the personal allowance, the pension allowances and the inheritance tax bands, tend to move gradually rather than vanish. The second is that any plan is worth re-running every year or two regardless, which is when a change gets picked up. Treating the document as finished is the mistake, rather than the assumption itself.
Yes, and you should push on them. Every assumption is printed in the document with the figure actually used, which is the whole reason for publishing them rather than filing them in an appendix nobody opens. Growth, inflation, the age we run to, whether spending falls as retirement goes on, whether an asset sells and for how much, when you stop and what you draw: all of it is adjustable. If you think three per cent is pessimistic, or that you will spend considerably less at 85 than at 65, tell us and we will re-run it on your figures. Arguing with an assumption is the most productive thing anybody does with a projection.
The same growth and inflation approach, yes. It works in today's money at a flat real rate, exactly as the full projection does. Two things are missing, and they happen to be the two that matter most. It applies no tax at all, so it cannot show you what drawing from a pension actually leaves in your hand, or how the State Pension using up most of your personal allowance changes what every other pound of income costs you. It also runs once rather than two thousand times, so it cannot tell you how much of the answer depends on the first few years being kind. That is the gap between a rough shape and a plan.
The projection runs in your browser in about a minute. Nothing is sent anywhere and no email is needed to see the answer.
Thirty minutes with a planner to work out whether you need a Plan at all. Some people leave that call having been told they don't.
One written document — every year to 100 with the tax done properly, what breaks it priced in years, and the ninety days after. £1,500.