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.

1.1Using the Pension calculator, work out how much disposable income John will have in the first year of retirement if he retires at age 67 and uses the whole of his pension fund to buy an annuity (which in the calculator is an index-linked annuity).