We’ve used information you’ve provided, combined with assumptions made by HSBC, to illustrate whether funds you are prepared to invest are enough to achieve your financial goals. The figures shown are indicative only - they're not guaranteed and are not maximum or minimum amounts.
GBP capital market assumptions e.g. inflation and annual growth rates, have been used to calculate the figures shown.
There is a 1 in 20 chance that the investments may under-perform the low return market conditions represented in this illustration. This may indicate a potentially negative return and in a worst case scenario, it’s possible to lose your entire investment.
Our Key Assumptions
Growth Rate
The initial results are based on an assumed growth rate associated with the risk level you selected.
Investments with higher risk usually have a greater potential for gains or losses. Whereas lower risk investments usually offer more stability and a lower return.
No Risk
You are unwilling to accept any investment risk and financial products that may fluctuate in value are likely not to be suitable for you. Products that are suitable for you will be cash-based and pay interest at the prevailing rates. The value of your money may be eroded by inflation over time.
Very Low
You are only willing to accept a very low level of investment risk and only financial products whose values are likely to fluctuate a very small amount may be suitable for you. These products may provide better returns than cash-based investments with the aim of keeping pace with inflation.
Very low risk products can still fall in value to below the amount you invest.
Low
You are only willing to accept a lower level of investment risk than average and only financial products whose values are likely to fluctuate a small amount may be suitable for you. These products may provide better returns than cash-based investments with the aim of keeping pace with inflation. Lower risk products can fall in value to below the amount you invest.
Moderate
You are prepared to accept a moderate level of investment risk for the increased potential to earn higher returns. Financial products that are moderate risk are likely to be suitable for you and you accept that although these products may provide better returns over time, they are likely to fluctuate in value.
Moderate risk products can fall in value to below the amount you invest, and are more likely to do so than lower risk investments.
High
You are prepared to accept a higher level of investment risk for the potential to earn higher returns. Financial products that are high risk are likely to be suitable for you and you accept that the value of high risk products can fluctuate significantly. Higher risk products can fall in value to significantly below the amount you invest, and are more likely to do so than moderate or lower risk investments.
Very High
You are prepared to accept a very high level of investment risk for the potential to earn much higher returns. Financial products that are very high risk are likely to be suitable for you and you accept that the value of these types of products can fluctuate substantially. Very high risk products can fall in value to substantially below the amount you invest, and are much more likely to do so than moderate or lower risk investments.
Inflation rate and forecasts of your target income
Due to the rising cost of living, the target income you provide is increased in line with inflation at the rate of 2.30% when calculating your desired retirement fund. It is assumed that upon retirement, a fixed amount that’s in line with inflation will be withdrawn from the retirement fund each month as income.
Your regular contributions
We have assumed that any regular savings or investments will remain constant over the contribution period, regardless of inflation. For example, if you start off at £1,000 per month, you will continue adding £1,000 per month for each year that contributions are made.
Average life expectancy
We have assumed that average life expectancy is 81 years.
Figures shown in the graph/table
To illustrate the uncertainty of returns, we show a range of potential outcomes for the risk level you selected. However this isn’t guaranteed, and the value of the investments can be higher or lower than the ranges illustrated. Negative returns are possible and the entire investment could be lost.
Please note that all the returns shown in the table are future values, rounded down to 3 significant figures.
Making adjustments
If either the amount contributed at the start, or the monthly contribution to the retirement fund is changed, we assume that the changes occur immediately.
The value of the retirement fund is adjusted to take into account any changes made. The return is then calculated based on the new value of the retirement fund.
If the risk profile is changed, the calculator will adjust the growth rate to that associated with the new risk profile.
