John is 53 years old and he has never been a member of a pension scheme. He gets a new job in a supermarket and he is automatically enrolled into a workplace pension. His gross earnings are 17,500. The pension scheme works on a defined-contribution basis; he pays in 5% of his earnings, which rises to 9% with tax relief and contributions from his employer.

At retirement, John also expects to get a state pension worth 8700 (before tax) in todays money.

Using the Pension calculator:

• 1. Work out Johns disposable income and drawdown income in the first year of retirement, if he retires at age 67 and uses the whole of his pension fund for drawdown, choosing to draw out a fixed income equal to 33% of his gross pre-retirement income (2 marks)

• 2. Comment on the sustainability of Johns drawdown strategy.