Pension Withdrawal Tax Calculator

It depends on how much you withdraw and your other income. Usually, 25% of a withdrawal is tax-free (up to the £268,275 Lump Sum Allowance) and the remaining 75% is added to your other income for the year and taxed at your normal Income Tax rate. There's no special 'pension tax rate' - a large withdrawal can simply push more of your income into a higher tax band.

25% of each uncrystallised withdrawal is tax-free if you're using the UFPLS method (taking lump sums directly from an untouched pot). If you've already moved your pension into drawdown and taken your tax-free cash upfront, further withdrawals from the remaining 75% are fully taxable - there's no more tax-free portion left in that pot. Select which situation applies to you in the calculator above.

When you make your first flexible withdrawal from a pension, your provider usually doesn't have a tax code for you yet, so HMRC requires them to tax it on a 'Month 1' emergency basis. This treats the withdrawal as if it were one-twelfth of your income repeated every month for a year, which typically overtaxes a one-off withdrawal significantly. You can reclaim the overpaid tax faster using HMRC forms P55, P53Z or P50Z, or it usually corrects automatically after the tax year ends. This calculator shows the tax you actually owe, not what your provider is likely to deduct upfront.

It's the £268,275 lifetime cap on tax-free cash you can take across all your pensions combined, which replaced the old Lifetime Allowance from 6 April 2024. Every tax-free lump sum you take, from any pension, reduces what's left of this allowance. Most people never get close to it, since 25% of a typical pension pot is well under £268,275, but it becomes relevant for larger pension savings.

No. Pension income, whether from a workplace pension, personal pension, or the State Pension, is never subject to National Insurance, regardless of your age. Only Income Tax can apply.

A large withdrawal that pushes up your taxable income for the year doesn't affect your State Pension amount, but it could affect income-related benefits or tax credits you receive, and can trigger the Money Purchase Annual Allowance (MPAA), which cuts your annual pension contribution allowance to £10,000 if you flexibly access taxable income from a defined contribution pension. This calculator doesn't check either of those; consider them separately if they might apply to you.

With UFPLS (Uncrystallised Funds Pension Lump Sum), each withdrawal you take is automatically 25% tax-free and 75% taxable, straight from your untouched pot. With flexi-access drawdown, you first move some or all of the pot into a 'crystallised' drawdown account, taking up to 25% of the amount moved as tax-free cash upfront, and any further withdrawals from that drawdown account are then fully taxable, since the tax-free part has already been taken. Both are common ways to access a defined contribution pension flexibly.