The 4% pension rule to retire comfortably

We explain how the 4% rule can help ensure you don’t run out of money even as retirement expenses rise

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Have you heard of the 4% pension rule?
(Image credit: © Getty Images )

Retirement costs are rising but one mantra has stood the test-of-time to ensure retirees don’t run out of money – the 4% pension rule.

Retirees have enjoyed pension freedoms for a decade now, giving people the flexibility to access their hard-earned pension pot from age 55 without the requirement to take an annuity or enter drawdown.

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Withdrawals

Total withdrawn

Pot left after 10 years

Lowest value

4%

£47,779

£188,977

£81,660 (11/02/2016)

5%

£59,749

£169,809

£80,771 (11/02/2016)

6%

£71,698

£150,642

£76,537 (23/03/2020)

7%

£83,648

£131,474

£71,925 (23/03/2020)

Marc Shoffman
Contributing editor

Marc Shoffman is an award-winning freelance journalist specialising in business, personal finance and property. His work has appeared in print and online publications ranging from FT Business to The Times, Mail on Sunday and the i newspaper. He also co-presents the In For A Penny financial planning podcast.

With contributions from