Net worth is what you own minus what you owe. The arithmetic is easy. The argument is about what goes in: the house you live in, a pension you cannot touch for years, a defined benefit pension that has no pot at all. The useful answer is not one number but three.
The house, and the mortgage against it
Your home is an asset, and for most people the largest one. Leaving it out understates what you are worth. Putting it in at full value overstates what you could use, because you need somewhere to live and selling it costs money.
Two rules settle most of the argument. If the house is in, the mortgage is in: a £700,000 house with a £250,000 mortgage adds £450,000, not £700,000. And it goes in at a realistic value, an estimate you would accept from a buyer, updated now and then, rather than the price at the top of the last market.
The pension
A defined contribution pension, a SIPP or a workplace pot, is money you own, and it belongs in your net worth. But it is different from an ISA in two ways that matter:
- You cannot reach it before the normal minimum pension age: 55 today, rising to 57 on 6 April 2028.
- Most of it is taxed when it comes out. Normally a quarter can be taken tax-free, up to £268,275, and the rest is taxed as income. A £600,000 pension is not worth £600,000 to you.
What your investments are worth after tax works through that second point wrapper by wrapper.
A defined benefit pension
A final salary or career average pension pays an income rather than holding a pot, so there is no balance to add up. There are two common ways to give it a value. One is the cash equivalent transfer value, which the scheme will quote on request: what it would pay out if you transferred the pension elsewhere. The other is a multiple of the annual pension; HMRC used a factor of 20 when it tested defined benefit pensions against the old lifetime allowance. The two can be far apart, and neither is a price anyone will pay you. Whichever you use, use it consistently.
The rest
Cars, furniture and possessions usually stay out: they lose value quickly and are rarely sold to fund anything. Collections that hold or gain value, such as art, wine or precious metals, are a judgement call and belong in if you would sell them. Every debt goes in: loans, credit balances, a margin loan, money owed to family.
Three numbers instead of one
Net worth. Everything you own, at realistic values, minus everything you owe. The house and its mortgage are in; so is the pension.
Without your home. The same, with the house you live in and the loans secured on it left out. This is the money that is working as an investment.
Within reach. What you could actually get at: no pensions before pension age, nothing locked in a private fund or an unsold property. This is what you could spend if you had to.
Each answers a different question. The first says how much you have built. The second says how much is invested. The third says how much room you have. Tracking all three over time says more than any one of them on a single day.
How Fairworth does it
The Overview in Fairworth shows gross assets, money owed and net assets for everything you have recorded: listed investments, pensions and ISAs, private funds and private shares, property, cash and collectibles, set against mortgages, loans and margin. A property is valued at its purchase price and your own revaluations after that, and a loan can be linked to the property it is secured on. Loan interest builds up automatically each month.
The Holdings page sorts everything by when you could reach it (available now, not until pension age, or not easily at all) and by how it would be taxed on the way out, ending in an after-tax figure. Your main home stays in net assets; Projections can include or exclude it and the loans secured on it. A defined benefit pension can be held as an account of its own, at the value you record for it, such as its transfer value; Fairworth does not turn a pension income into a capital value for you.
Pension rules were checked against GOV.UK in October 2026 and may change. This page is information, not tax or investment advice.
More on Net worth
- Cash, debts and investments on one balance sheet ExplainerThe cash buffer, expensive debt and five-year horizon that guidance asks about before you invest, side by side.