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Annuity Calculator

The income a pot supports, or the pot an income needs.

Finance Calculators Free, no sign-up Runs in your browser

Used when solving for the income.

Used when solving for the pot.

An escalating annuity keeps pace with inflation and starts lower.

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Answer
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Total paid out
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Of which growth
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First payment
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Final payment
Year by year
YearPaid outGrowthPot left
A level annuity pays the same amount for life and loses purchasing power every year. An escalating one starts lower and keeps up with prices. Which is better depends on how long you live, which is the part nobody knows.

About the Annuity Calculator

Annuity Calculator works in both directions. Give it a pot of money and it returns the income that pot can pay for a chosen number of years; give it the income you want and it returns the pot required. Both assume the money left keeps earning while it is being drawn down, which is what makes an annuity pay out more than the pot divided by the years.

Escalation is included because a level income is a falling income. Paying the same amount for twenty years means the last payment buys far less than the first, and at three per cent inflation it buys about half. An escalating annuity starts lower and rises each year, and setting the escalation rate shows exactly what that trade costs at the start.

The year-by-year table shows the pot running down and the growth running alongside it. The pattern is the opposite of a savings plan: growth is largest at the start, when the pot is still big, and shrinks towards the end. That is also why drawing more in the early years costs far more than it appears to.

This is arithmetic, not financial advice. It tells you what the numbers do; it cannot tell you whether a decision is right for your circumstances. Fees, taxes and local rules vary, so check anything that matters against the actual offer and speak to someone qualified before committing.

Everything is worked out inside your browser. Nothing you enter is uploaded, logged or stored, which matters for the financial calculators in particular: the figures you put into them are nobody else's business.

How to use the Annuity Calculator

  1. Choose work out and paidThe fields below change to match what you pick, so only the figures that matter to your case are asked for.
  2. Enter pot of money, income wanted per period and return while paying out (% a year)Decimals are fine, and thousands separators are accepted and ignored.
  3. Read the answer, total paid out and of which growthThe figures update as you type. The Calculate button is there if you would rather press something, but nothing waits for it.
  4. Copy or check the resultCopy the summary with the copy button, or open the table to check it row by row.

Features

  • Shows answer, total paid out, of which growth, first payment and final payment together, so you are not running it twice
  • Full year by year you can open and check
  • Updates as you type, with no button to press and no page reload
  • Copy the result in one click
  • Free, no sign-up, and it runs entirely in your browser

Who uses this tool

The annuity calculator is used by writers, developers, students, marketers and anyone else who needs the job done once without installing software. Common cases include:

  • Estimating the income a pension pot could provide
  • Working out the pot needed for a target retirement income
  • Comparing a level annuity with an escalating one
  • Seeing how long a pot lasts at a chosen withdrawal rate

Frequently asked questions

Is this the same as an annuity I would be quoted?

No. A real annuity is priced on life expectancy, interest rates and the provider's margin. This is the arithmetic of drawing down a pot over a fixed period, which is the right way to sanity-check a quote but not the same thing.

What return should I assume during drawdown?

Lower than during accumulation, usually, because a pot being drawn down is normally invested more cautiously. It is worth running a pessimistic figure: running out of money early is not a recoverable mistake.

Level or escalating?

Level pays more now and less in real terms later; escalating is the reverse. The longer you expect the payments to last, the more the escalating version is worth.

If the annuity calculator is not quite what you need, these other free tools solve closely related problems, and there are 38 more in finance calculators.

Retirement Calculator

Project a retirement pot and the income it would pay.

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Inflation Calculator

What a sum is worth after inflation, and what you would need to match it.

Finance Calculators Use tool

Checked and rebuilt on 2026-10-14. The method this calculator uses is described in the section above, and corrections go through the contact page.