What the portfolio becomes over the whole horizon
Investable wealth, an allocation, a withdrawal and a horizon, projected year by year after fees and UK tax, against the same capital compounding with nothing taken out.
By Eldar Edmond Grady, CEO, PPLI.com · Research checked 23 September 2026
Withdrawals, fees and tax all stop compounding
The simulator runs the portfolio held directly. Each year it pays the savings rate on interest, the dividend rate on dividends and 24% on realised gains. Withdrawals are funded by a pro-rata sale, and the CGT on the gain embedded in what is sold is paid too.
Inside a policy the annual tax on that part would be deferred, and the question would become whether the charges and the income tax at the end cost less. The break-even page measures that. Here the simulator shows which asset classes carry the drag and how much of the portfolio can be sold quickly when spending has to be met.
£1,000,000 over 10 years, three tax characters
No fees, no withdrawals, additional-rate taxpayer.
Bonds, 5%, all interest 1,000,000 x (1 + 5% x 55%)^10 = £1,311,651
Growth, 8%, never sold 1,000,000 x 1.08^10 = £2,158,925
Growth, 8%, all gains realised 1,000,000 x (1 + 8% x 76%)^10 = £1,804,410The first line pays 45% on every year's return. The second pays nothing until it is sold, and nothing at all if it is held until death. The third pays 24% every year. The instrument above does the same thing across a whole allocation, with fees and spending.
How the projection works
Each year
Gross return less fees; income taxed as it arises at the savings or dividend rate; growth realised by turnover taxed at the CGT rate; after-tax proceeds reinvested; the portfolio rebalanced to target weights with base cost carried in proportion.
Withdrawals
Grow at the rate you set. The sale that funds them is grossed up so the withdrawal arrives in full after CGT.
Access by wealth
Below £10m the private classes are treated as not allocable; between £10m and £25m they are held at half weight. These are modelling conventions, not rules.
Common questions
Why is the untaxed line not achievable?
No structure available to a UK resident removes both fees and tax. It is shown as a yardstick for what fees and tax take out over the horizon.
Can I change the dividend share?
Yes. Each row has its own dividend share of income; the rest of the income is taxed at the savings rate.
Instruments and related reading
Tax drag calculatorThe annual tax cost, asset class by asset classOpen →Offshore bond break-evenThe year a policy pays for its charges, if it doesOpen →Portfolio intelligenceWhat one allocation keeps that another does notOpen →Wealth Intelligence profileOne set of facts, carried into every instrumentOpen →Wealth IntelligenceThe full programme: portfolio, tax, alternatives and structureOpen →PPLI.com is not authorised by the Financial Conduct Authority and does not give personal advice. This is general information about UK law, not an invitation or inducement to enter into any insurance or investment contract. Policies issued by insurers outside the UK are not protected by the Financial Services Compensation Scheme (unless written through a UK branch).
The authorities this page relies on
Income tax, savings and dividend rates
Savings rates 20, 40 and 45% in 2026/27. Dividend rates 10.75, 35.75 and 39.35% from 6 April 2026. Savings rates of 22, 42 and 47% from 6 April 2027 (FA 2026 s.5), shown here only as a labelled option. gov.uk, rate changes
Capital gains tax rates
18 and 24% for disposals on or after 30 October 2024. Business Asset Disposal Relief at 18% from 6 April 2026. Annual exempt amount £3,000. gov.uk, CGT rates
HMRC helpsheet HS282
There is no capital gains tax charge when someone dies. The personal representatives take the assets at their market value on the date of death. gov.uk, HS282
Talk the numbers through with a specialist
Every enquiry is read personally by an experienced specialist. You receive a written reply, usually within one working day.
Ask about PPLI
Editorial standards