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

We use official UK government sources to ensure accuracy. All rates are for the 2024/25 tax year unless otherwise stated.

Calculation	Rate/Value	Source
Personal Allowance	£12,570	HMRC
Basic Rate Band (20%)	£12,571 - £50,270	HMRC
Higher Rate Band (40%)	£50,271 - £125,140	HMRC
Additional Rate (45%)	Over £125,140	HMRC
State Pension (Full New)	£221.20/week (£11,502.40/year)	DWP
State Pension Age	67 (rising to 68)	DWP
NI Qualifying Years (Full SP)	35 years	DWP
ISA Annual Allowance	£20,000	HMRC
Pension Annual Allowance	£60,000	HMRC
Lump Sum Allowance (PCLS)	£268,275	HMRC
Dividend Allowance	£1,000	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 State Pension requires 35 qualifying years of National Insurance contributions
• Pro-rated for fewer years: (Your Years / 35) × Full Amount
• Minimum 10 qualifying years required to receive any State Pension
• Triple Lock projection assumes minimum 2.5% annual increase

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 calculated using current HMRC bands with Personal Allowance taper above £100,000
• National Insurance calculated on employment income above threshold
• Dividend tax calculated after £1,000 dividend allowance at appropriate rates
• Capital Gains calculated after £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

• Tax Rules: Based on 2024/25 tax year; 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: Projections use average life expectancy data; 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

Last Updated: April 2024 (2024/25 Tax Year)

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