£400,000 pension pot: what income will it give?

Retiring at 67 with £400,000 and the full State Pension, you could draw about £29,068 a year after tax (£2,422 a month) in today's money until age 95. About £16,754 of that comes from the pot and the rest from the State Pension. That assumes balanced investments growing on average.

At about £29,068 a year it is planned to last to 95 if markets deliver average returns, which happened in 43% of 1,000 simulated markets. A more cautious income of £22,709 a year lasted to 95 in 9 out of 10 of them.

Usually 25%, so £100,000. You can take it in one go or a quarter of each withdrawal. The rest is taxed as income when you draw it.

On top of the full State Pension, cashing in £400,000 in one tax year would cost about £126,849 in income tax, leaving £273,151. Spread over 10 years the tax falls to about £59,955. Your first withdrawal is often taxed on an emergency code, and any overpaid tax can be reclaimed from HMRC.

With the full State Pension, £400,000 gives about £29,068 a year, which meets the minimum Retirement Living Standard for one person (£13,900 a year after tax). Whether it is enough depends on your costs, your home and any partner's income.

Retiring at 60, the same pot gives a flat income of about £24,010 a year to 95, lower because it has to cover the years before your State Pension starts and last longer overall.