About Our Calculations

Important Disclaimer

• Illustrations Only: All outputs are projections based on assumptions, not guarantees of future performance.
• Past Performance: Historical returns used in calculations are not a reliable indicator of future results.
• Personal Circumstances: Our calculations cannot account for your complete financial situation, health, or personal goals.
• Tax Advice: Tax calculations are estimates based on current rules; tax treatment depends on individual circumstances and may change.
• Investment Risk: The value of investments can fall as well as rise; you may get back less than you invest.

Data Sources

2026/27 UK tax year — legislated figures. rUK income tax bands are shown; Scotland differs. Projected figures are modelling assumptions, not enacted rates.

Calculation	Rate/Value	Source
Personal Allowance	£12,570	HMRC
Basic Rate Band (20%)	Above £12,570 to £50,270	HMRC
Higher Rate Band (40%)	Above £50,270 to £125,140	HMRC
Additional Rate (45%)	Over £125,140	HMRC
State Pension (Full New)	£241.30/week (£12,547.60/year)	DWP
State Pension Age	State Pension age depends on date of birth, including transition cohorts. Check the exact date at gov.uk/state-pension-age.	DWP
NI Qualifying Years (Full SP)	35 years (individual entitlement may differ)	DWP
ISA Annual Allowance	£20,000	HMRC
Pension Annual Allowance	£60,000	HMRC
Lump Sum Allowance (PCLS)	£268,275 (subject to remaining allowance)	HMRC
Dividend Allowance	£500	HMRC
Savings Allowance (Basic Rate)	£1,000	HMRC
Capital Gains Tax Allowance	£3,000	HMRC
IHT Nil Rate Band	£325,000	HMRC
IHT Residence Nil Rate Band	£175,000	HMRC

Calculation Methodologies

Pension Pot Projections

We use compound interest calculations to project your pension pot growth:

• Formula: FV = PV × (1 + r)^n + PMT × [((1 + r)^n - 1) / r]
• Default Growth Rate: 7% per annum (realistic scenario), adjustable by user
• Inflation Adjustment: Real returns calculated by subtracting assumed inflation from nominal growth
• Fees: Separate fee deduction applied annually if specified

State Pension Calculations

• Full new State Pension generally requires 35 qualifying years; individual entitlements can differ.
• Check your own NI record and forecast; a simple years-based fraction may not reflect contracted-out history.
• Minimum qualifying years: 10
• Future increases are projections, not guaranteed statutory amounts.

Monte Carlo Simulation

Our Monte Carlo analysis runs 1,000 simulations with randomised annual returns:

• Mean Return: User-specified (default 7%)
• Standard Deviation: 15% (typical equity market volatility)
• Output: Probability bands showing 5th, 25th, 50th, 75th, and 95th percentiles

Tax Calculations

• Income tax uses year-specific bands; 2026/27 Personal Allowance taper starts above £100,000
• National Insurance calculated on employment income above threshold
• Dividend tax calculated after the 2026/27 £500 allowance at applicable rates
• Capital gains calculated after the 2026/27 £3,000 annual exempt amount

Sustainable Withdrawal (4% Rule)

• Based on the Trinity Study methodology
• Calculates initial withdrawal as 4% of portfolio value
• Adjusted for inflation each subsequent year
• Conservative (3%) and aggressive (5%) alternatives available

Assumptions & Limitations

The main household projection uses the horizon configured for that plan. Specialist calculators, stress tests, Monte Carlo illustrations, and presentation views may use a separate fixed or selected period; where they do, that local period is identified on the relevant result and does not redefine the household projection horizon.

• Tax Rules: 2026/27 UK tax year — legislated figures; future tax policy cannot be predicted
• Inflation: Default 2.5% per annum; actual inflation may vary significantly
• Investment Returns: Not guaranteed; actual returns depend on market conditions and investment choices
• State Pension: Subject to government policy changes
• Life Expectancy: Person-specific life-expectancy assumptions can inform household and specialist periods; individual outcomes vary
• Exchange Rates: Not applicable; all calculations in British Pounds (GBP)

Regulatory Information

Wealth365 is a financial planning tool, not a regulated financial adviser.

• We are not authorised by the Financial Conduct Authority (FCA) to provide regulated financial advice
• We do not recommend specific financial products, investments, or providers
• We do not receive commission on any financial products
• Your data is used solely for calculations and is not shared with third parties for marketing

For regulated financial advice, we recommend consulting an FCA-authorised Independent Financial Adviser. You can verify an adviser's authorisation status on the FCA Financial Services Register.

Updates & Accuracy

We review and update our calculations annually to reflect changes in:

• HMRC tax rates and allowances
• DWP State Pension amounts
• Pension regulations and allowances
• Other relevant UK financial regulations

Tax figures displayed: 2026/27 UK tax year — legislated figures

If you believe any of our calculations are incorrect, please contact us.