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Understanding the Assumptions tab

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Summary

  • The Assumptions tab (Active Configuration) shows every portfolio, tax rule, and inflation setting behind your simulation.
  • You can edit inflation (mean and standard deviation) and tax band inflation settings directly here.
  • Inheritance tax nil-rate bands are always held fixed for your whole projection, regardless of the tax band inflation setting.

What's shown

A transparent view of every assumption powering the simulation: your portfolio allocations, the current tax year's bands (region-aware — England/Wales/NI or Scotland), inflation assumptions, and withdrawal logic.

What you can edit

  • Inflation — set the mean and standard deviation used each year. Each simulation year draws a random inflation rate from a normal distribution with these parameters; set standard deviation to 0% for fixed inflation.
  • Tax band inflation — by default, income tax thresholds and the personal allowance stay frozen at current levels through the known freeze period (tax year 2027/28), then grow from 2028/29 in line with your assumed inflation rate. Untick to freeze bands indefinitely instead (fiscal drag).
  • State Pension triple lock — on by default, growing the State Pension at CPI plus a small premium (approximating the higher of CPI, average earnings, or 2.5%). Untick for CPI-only growth.

What's always fixed

Inheritance tax nil-rate bands are never inflated, regardless of the tax band inflation setting above — they're held fixed for your whole projection. See Inheritance Tax (IHT) planning for why.

Frequently asked questions

Can I change the tax assumptions the simulation uses?
Yes — inflation and tax band inflation settings are editable directly on the Assumptions tab.
Why don't the IHT nil-rate bands follow the tax band inflation setting?
They're deliberately modelled as permanently fixed — a conservative choice explained in Inheritance Tax (IHT) planning.
What happens if I set inflation standard deviation to 0%?
Inflation becomes fixed at the mean rate every year, rather than varying randomly.

More in Your Dashboard

Reading the projection chartUsing the sidebar slidersReal vs Nominal valuesUnderstanding the cashflow chartProbability of success explained
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