How it works

What it does — and what it doesn’t

You describe your household once: ages, pay, pensions, savings, your home and mortgage, and what you spend. Plan My Freedom then works through every year from now to the end of the plan (age 90 unless you choose otherwise; for a couple, until the younger of you reaches that age).

Each year, income comes in and income tax, National Insurance and any student loan come off. Spending, the mortgage and other debts go out. Spare money is put away in the order you choose (by default it tops up a £10,000 cash buffer, then goes into ISAs). If there’s a shortfall, it comes out of savings: cash first, then taxable investments, then ISAs and pensions in the order you choose. The headline answer is whether that money lasts, and to what age.

• It shows what your figures add up to under the assumptions on this page. That is guidance, not financial advice.
• It doesn’t tell you what to do, and it never recommends a product, fund, provider or adviser. It sells nothing and earns nothing from anyone it mentions.
• It only knows what you tell it, and it doesn’t check your figures.
• Plan My Freedom is not authorised or regulated by the Financial Conduct Authority.

Everything is in today’s money

Every amount is in today’s pounds. You enter today’s figures, investments grow by how much they beat inflation, and tax thresholds and the State Pension are assumed to rise with prices. So £30,000 of spending at 80 means £30,000 of what money buys now, not £30,000 after decades of rising prices.

That’s why there is no inflation setting: inflation is already taken off everything. A growth rate of 5.5% means 5.5% a year more than prices rise. There are two exceptions. Capital gains tax, and the tax on savings interest, are charged on pounds of the day, including the part that is only inflation, so for those two calculations the plan assumes prices rise 2.5% a year.

The UK rules it uses

The plan uses the rates and allowances for the 2026/27 tax year (6 April 2026 to 5 April 2027). It works them out for each adult, every year.

• Income tax: a £12,570 personal allowance, 20% to £50,270, 40% above that and 45% above £125,140. The allowance shrinks by £1 for every £2 of income over £100,000.
• Scotland: for a household living there, Scotland’s six bands apply to pay, pensions and rent: 19% starter, 20% basic, 21% intermediate, 42% higher, 45% advanced and 48% top. Dividends and gains are taxed at UK rates, as the law says.
• National Insurance for employees: 8% on pay between £12,570 and £50,270 and 2% above, stopping at State Pension age.
• Pensions: tax relief on what you pay in, through salary sacrifice or relief at source, plus your employer’s contributions. The £60,000 annual allowance tapers down to £10,000 for the highest earners. Pensions can be drawn from 55, rising to 57 on 6 April 2028. With your month and year of birth the plan applies that date exactly: born before 6 April 1973, you reach 55 before the change and can keep drawing from 55 if you start by then (born 6 April 1971 to 5 April 1973, starting later means waiting until 57); born later, 57. With only an age, the change is taken from the start of 2028. Protected pension ages aren’t modelled. A quarter of what you take is tax-free, up to £268,275 over your lifetime, taken a bit at a time or as one lump sum. The rest is taxed as income. The plan leaves a pension alone until its owner retires; if the bills couldn’t otherwise be paid while they’re still working, it is drawn from the age the law allows, as a last resort.
• State Pension: the full new State Pension is £241.30 a week (£12,547.60 a year) in 2026/27. It starts at your State Pension age, which the law sets from your date of birth: 66, rising month by month to 67 for people born April 1960 to March 1961, then 67, and 68 for people born from April 1978, with fixed dates in between for those born April 1977 to March 1978. Give your month and year of birth and the plan uses that timetable (as if born mid-month, so in the band that covers most of the month), starting the State Pension the month after you reach it, so the first year pays only part. With only an age it uses whole years (66, 67 or 68 by year of birth). You can enter your own forecast or age instead; an age you choose is a whole year.
• ISAs: up to £20,000 a year each. Junior ISAs take up to £9,000 a year for each child, and at 18 they become the child’s own money.
• Taxable investment accounts: dividends of 2% of the value a year are assumed, taxed at 10.75%, 35.75% or 39.35% after a £500 allowance. Capital gains tax on money taken out is 18% or 24%, after a £3,000 allowance.
• Cash outside an ISA: its interest is taxed as income after the personal savings allowance (£1,000 at the basic rate, £500 at the higher rate, none at the additional rate) and the 0% starting rate for savings. Cash ISAs pay none.
• Income cliffs: Child Benefit is taken back between £60,000 and £80,000 of the higher earner’s income. Above £100,000 the plan shows what you lose. If you want, it can pay income over a limit into your pension.
• Student loans: Plans 1, 2, 4 and 5 and postgraduate loans, repaid at 9% (6% for postgraduate) above each plan’s threshold until paid off or written off.
• Buying a home: Stamp Duty in England and Northern Ireland, LBTT in Scotland and Land Transaction Tax in Wales, with the higher rates for a second home. Rental income is taxed in full, with a 20% credit for mortgage interest.
• Inheritance tax: a £325,000 nil-rate band and a £175,000 residence band when the home goes to children or grandchildren. The residence band shrinks for estates over £2 million. The rate is 40%, or 36% if you leave 10% to charity. A couple’s allowances are both used on the second death. From April 2027 unused pensions count towards the estate. Gifts use the £3,000 yearly exemption, gifts out of spare income and the seven-year rule.

All the tax figures sit in one place in the app. We update them for each new tax year and whenever a Budget changes them, and the app always says which tax year it is using. Changes already set in law are built in from the year they start, such as the pension age rising to 57 in 2028 and pensions counting for inheritance tax from April 2027.

Growth and inflation assumptions

Your money is split across four kinds of investment, and each has a long-run growth rate above inflation and a typical yearly swing. The main forecast grows at these rates every year (we call that steady growth). In the simulation they are the middle of each year’s range.

The defaults are more cautious than history for shares, because the last century was unusually good for US shares. The history column uses the default mix of 70% US and 30% UK shares and 30% US and 70% UK bonds. Property is UK house prices.

The four types don’t move independently. Shares and property tend to move together (60%). Bonds and property move together a little (20%), and so do cash and bonds (30%). Shares and bonds tend to move slightly in opposite directions (−10%), and cash is unrelated to shares and property.

With Premium you can change any of these in Settings, or set them to match history with one tap. You can also give an account its own growth figure. Pay rises, spending changes and the cash buffer are in your plan, and you can change them at any time.

The odds your money lasts

Markets don’t return the average every year, so Premium also runs your plan through 2,000 possible futures. In each one, every year’s returns for shares, bonds, cash and property are picked at random. They centre on the growth figures above, spread by the typical swing, and move together as described above. A year can’t lose more than everything. Everything else stays as in your plan: your pay, spending, tax rules and life events.

A future lasts if the household never runs short, meaning there is always enough in cash, investments, ISAs and pensions to pay for the year after tax. Your home isn’t sold to pay for spending unless your plan includes a move or downsizing.

“Your money lasts with 92% probability” means 1,840 of the 2,000 futures lasted. It is not a promise, and it is only as good as the assumptions behind it. In the other 160, the money ran out at some point, and the chart of the range shows when. The random picks are fixed, so the same plan always gives the same answer, and any change in the odds comes from a change you made.

The headline is green at 85% or more, amber from 70% to 85% and red below 70%, or red if the money runs out even with steady growth.

Real market history

Market Scenarios also replays your plan through what actually happened. Each year of real history from 1928 to 2025 is lined up with the plan year you choose (this year, the year you retire, or any other), and the years after it follow as they did. These are the real returns, not the averages. The 1929 crash, the inflation of the late 1960s and 70s, the 1973 oil shock, the dot-com bust and 2008 are marked, and you can start any of them in a year you pick.

Where history runs out (after 2025), average growth fills in and the chart stops drawing. The count of how many start years lasted only includes runs with real data all the way through.

UK shares, gilts, cash, inflation and house prices to 2016 come from the Bank of England’s “A millennium of macroeconomic data for the UK”. After that the figures come from ONS inflation, Bank Rate, total returns on UK shares and gilts, and the HM Land Registry house price index. US shares and Treasury bonds come from Professor Aswath Damodaran (NYU Stern). Everything is after inflation. The Bank of England share index has no dividends, so an estimated 5% a year is added, which means single years can be a few points out. Currency moves between the pound and the dollar are ignored.

Flexible spending

Most people would spend a bit less after a bad run in the markets. Flexible spending lets the plan do that too. It is off unless you turn it on in Market Scenarios.

Once everyone has retired, everyday spending is cut by 10% in any year when savings are below what they’d need to last to the end at average growth. It is lifted by 10% in any year when savings are more than 20% above the main forecast’s path. You can change all three numbers. Only everyday living costs change, not the mortgage, rent, debts or life events.

This only affects the simulation and the history replays. The main forecast assumes steady growth, so it never needs to cut back.

Trying changes: alternative plans and inheritance

Under Plan Intelligence you can keep up to two alternative plans beside your main one, such as retiring two years later or moving to a smaller house, and see their figures and charts side by side on the same scale. An alternative only stores what’s different, so changes to your main plan carry through to it.

Inheritance & gifts estimates the inheritance tax on the last death in each year of the plan and what your heirs would receive. It compares gifts during your lifetime, leaving 10% to charity, and which pot to spend first, showing each against the tax and against whether your money still lasts. Pensions inherited from someone who died at 75 or over are taxed as the heirs’ income, and the plan estimates that at the basic rate.

What it leaves out

Every model simplifies. Here is what this one simplifies or leaves out.

• Personal advice: it can’t weigh up your attitude to risk, your health or anything you haven’t entered.
• Frozen thresholds: tax thresholds are assumed to rise with prices. In fact many are frozen until April 2031, so tax over the next few years may be a little understated.
• Dividends are assumed at 2% a year, and capital gains tax is worked out only on taxable investment accounts, not on selling a property. Tax years are treated as calendar years.
• Investment charges: there’s no separate setting for fund or platform fees. The growth figures are what you keep, so if you pay 1% a year in charges, lower the growth figure to match.
• Annuities: pensions are drawn down a bit at a time, and the plan doesn’t price an annuity. A final-salary (defined benefit) pension can be entered as the income it pays.
• Care: care costs are included only if you add them as a life event with a yearly cost. Means-tested help with care, and benefits such as Universal Credit and Pension Credit, aren’t modelled.
• Living to the end of the plan: everyone is assumed to live to the end of the plan. It doesn’t model one partner dying first, with its effect on income and pensions. Inheritance tax is estimated on the last death.
• Your home is never sold automatically to pay for spending. Add a move or downsizing as a life event if that’s part of your plan.
• Life’s surprises: losing a job, an illness or a windfall are only in the plan if you add them. Markets are the only thing the simulation varies.
• Inheritance tax: business and farm relief, trusts, small and wedding gifts, gifts made before the plan starts and the costs of settling an estate aren’t included.
• Markets: the past is no guide to the future. In the simulation, one year’s returns don’t depend on the year before, and in the history replays currency moves are ignored.

Your data and privacy

• No bank links: you type your figures in, and the app never connects to your bank, pension or investment accounts.
• Before you make an account, your plan is kept only in your own browser.
• Once you sign up, your plan is stored encrypted (AES-256-GCM) on our server, with the key kept apart from the database. Backups are taken every night and kept for up to six months.
• We never sell your data. There are no tracking cookies, only the one that keeps you signed in. Our records of how the app is used hold no figures from anyone’s plan.
• You can download everything we hold about you, or delete your account and all of it, at any time from your Account page.
• If you subscribe, Stripe takes the payment, and we never see your card details.

Free, impartial help

For guidance from a person, or before a decision that’s hard to undo, such as taking or transferring a pension or buying an annuity, these services are free and impartial.

• MoneyHelper — Free help with money and pensions, backed by the government.
• Pension Wise — A free appointment about your options if you’re 50 or over with a defined contribution pension.
• Find a retirement adviser — MoneyHelper’s directory of regulated advisers, if you want personal advice.
• The FCA register — Check that an adviser is authorised before you pay for advice.

Questions people ask

Is this financial advice?

No. Plan My Freedom shows what your own figures add up to under the assumptions on this page. It doesn’t recommend what to do or which product to choose. For that you need a regulated financial adviser, and MoneyHelper can help you find one.

Why are all the amounts in today’s money?

So that a figure 30 years from now means something. Inflation is taken off everything, so £1 at any age buys what £1 buys today, and growth rates are how much investments beat inflation.

What does “lasts with 92% probability” mean?

Your plan was run through 2,000 possible markets, and in 92% of them, 1,840 futures, the money lasted to the end of the plan. It is an estimate based on the growth and swing assumptions, not a promise.

Is 85% good enough?

That’s yours to judge. The app colours 85% and above green and 70% to 85% amber. A lower figure means more futures in which you’d have to cut back. Flexible spending shows what spending a little less after bad years would do.

Where do the growth figures come from?

They are cautious long-run figures above inflation: 5.5% for shares, 1.5% for bonds, 0.5% for cash and 2.5% for property. History since 1928 did a little better for shares. With Premium you can change them or match history.

Why is my answer different from my pension provider’s forecast?

Providers use their own growth rates and usually look at one pension on its own. This plan looks at everything your household has, after tax and inflation, against the spending you enter, so the answers can differ.

Does it connect to my bank?

No. You type your figures in, and nothing connects to your accounts. Your plan is stored encrypted, and you can download or delete it at any time.

How often are the tax rules updated?

For each new tax year and whenever a Budget changes them. The app always says which tax year it is using, which is currently 2026/27.