Pension Fund Withdrawal (Income Drawdown) GAD Calculator – work out ‘unsecured income’ limits.

The purpose of this calculator is work out:

The maximum income that you could take from a pension fund withdrawal plan, based upon relevant factors, such as your age, gender and the current Gilt Index Yield. The are two main options within the calculator:

  • Calculate Income Withdrawals from a given pension fund value(s)
  • Work out limits from known GAD factors


Calculate Income Withdrawals from a given pension fund amount

This is the main method that is used to calculate a maximum income allowable from a given pension fund. You will need to input:

  • Your gender / status. Normally this will either be male or female, but there is another entry relating to children or adults under the age of 23 – this narrow option relates to people who are taking a survivor’s pension (death benefits) by way of pension fund withdrawal.
  • Your age at the reference date (see further sections below).
  • The reference date of the calculation. This is set to today’s date by default. You can do calculations based on previous dates (but not before 06 April 2006).
  • The fund values / transfer values of the pension funds that you plan to take a direct income from.
  • Any tax-free lump sum you plan to take from your pension funds. Either leave it at the default value of 25% of the fund values, or enter a specific value in the adjacent input box. If you have already taken the maximum tax-free lump sum from your pension funds, uncheck the ‘maximum lump sum’ checkbox, and set the value in the adjacent input box to 0.

Work out limits from known GAD factors

This option is likely to be used less frequently, but it enables you to do a quick ‘look-up’ on the GAD Tables, and work out the maximum income per £1,000 of pension fund. You will need to input:

  • Your gender / status.
  • Your age at the reference date.
  • The Gilt Index Yield at the reference date (see below for more details).

Pension Fund Withdrawal – General Points.

If you want a more detailed overview of the subject, please view the page about pension fund withdrawal.

If you have come this far, we are assuming that you have some knowledge about how pension fund withdrawal works, and the following notes deal with points mainly relating to the calculator.

What is ‘unsecured income’

Before 1995, the only pension options were a company pension scheme for the lucky, and an annuity for individuals with private pension funds. Then in 1995, it was decided to allow individuals to draw an income directly from their pension funds (within certain limits), and was given the name ‘income drawdown’. The was changed a few years later to ‘pension fund withdrawal’, but the term ‘income drawdown’ was still widely used, and still is even to this day.

After the pension simplification changes of April 2006, another definition is now applied – namely ‘unsecured income’. This is to reflect the fact that pension income is either ‘secured’ or ‘unsecured’. A ‘secured’ pension reflects the fact that there is some form of security or guarantee behind the pension payments (which will be usually fixed) – i.e. an annuity or Final Salary company pension would be described as ‘secured’. However, as a Pension Fund Withdrawal contract remains invested, and therefore the value of the investments can go up and down, it does not provide the same level of security as a secured pension – hence the title ‘unsecured’.


Reference Dates and Gilt Index Yields

It is important to input all the relevant details into this calculator in order to work out the maximum allowable income accurately. This section will describe the relevance of the individual factors.

The ‘reference date’ of the calculation refers to the date when pension funds are ‘crystalised‘ and you actually start to draw an income from the pension fund(s). Therefore, if you are just working out an estimate or an indicative figure, use today’s date. Also use today’s date if you are in the process of taking the benefits from a pension fund via withdrawals. However, because of the time delays that can and do occur when setting up such an arrangement (as pension funds are often transferred between different administrators and insurance companies), the reference date ultimately used may only be known in the future.

The main factor in working out the income that can be taken from a pension fund withdrawal plan is the current Gilt Index Yield. The yield that is used in any given month is the yield on 15-Year Gilts as published in the Financial Times on the 15th day (or the next available date if the 15th falls on a weekend) of the previous month, and rounded down to the nearest quarter of a percent (unless it is an exact quarter of one percent anyway) and rounded down to the nearest quarter of a percent (unless it is an exact quarter of one percent anyway).

Therefore, if you are calculating figures based on an earlier reference date, it is likely that the gilt index yield used will be different from this month’s yield.

As most annuities are secured by insurance companies by the purchase of Gilts to meet their long-term liabilities, annuity rates at any given time are sensitive to changes in Gilt Yields. Because the maximum income that can be taken from a pension fund withdrawal contract is based upon the equivalent on the equivalent income that could be received if you had purchased an annuity instead, the upper income limits that are set for the next five years upon entering an PFW contract are calculated partly by the current gilt index yield.

Once the gilt index yield is known, it is necessary to reference tables provided by the Government Actuaries Department (GAD), and look up the maximum income that can be taken per £1,000 based upon this index yield and your age. There are three separate tables for men, women and children / adults aged under 23.

Once the basic amount of income per £1,000 of pension fund is known, the maximum income withdrawal is 120% of this figure, and the minimum amount is £0 per annum (this allows you to postpone taking income at any time if you do not need it).

Once the income limits are set, they are reviewed again exactly five years from the reference date, and the new limits will also depend upon the same factors – age, gender, Gilt Index Yield.


This calculator works out results and factors on both an ‘Unsecured Income’ basis and an ‘Alternatively Secured Pension’ basis if applicable (ASPs are available after age 75).

Important Points

Use of this calculator does not constitute a recommendation to use pension fund withdrawal. If you are considering going down this route, we recommend that you seek Independent Financial Advice in the first instance, as there may be more suitable options in your particular circumstances. If you are still in doubt, read through the consumer guidance sections within the Financial Services Authority website.

The figures projected by this calculator are only for guidance purposes – whilst we aim to ensure the accuracy of our calculators, we can take no responsibility for the usage made of the calculations generated on this site.