← Calculators/Tax year 2026/27·Last reviewed
Pension withdrawal tax calculator
How a flexible pension withdrawal is really taxed: the 25% tax-free / 75% taxable split, the taxable element stacked on your other income, and the effective marginal rate — with the £100k personal-allowance trap flagged when the slice crosses it.
Free, no sign-up. Runs the same engine and the same versioned tax-year config the signed-in suite uses — nothing leaves your browser. How we verify the numbers.
One payment, split and stacked.
The payment before any tax. The tool splits it 25% tax-free / 75% taxable.
Salary, State Pension, other pensions in payment, rental profit — gross, for the same tax year.
The bands and the personal allowance come from the year’s versioned config.
Scottish rates apply to non-savings income; the 25% split and the personal allowance are UK-wide.
The tax-free element is separately tested against the lump sum allowance — the UFPLS calculator checks the headroom.
For planning and illustration purposes only · Verify all inputs against source documents · This tool does not constitute financial or tax advice.
— In short
Up to 25% of a pension withdrawal is normally tax-free — the tax-free element of a UFPLS, or the PCLS taken at designation — within the lump sum allowance (PTM063300). The rest is pension income taxed at your marginal rate (ITEPA 2003 s.579A), stacked on top of everything else you earn in the same tax year. There is no flat rate: the tax depends on your total income for the year.
— How it's calculated
The 25% tax-free / 75% taxable split
An uncrystallised funds pension lump sum (UFPLS) is 25% tax-free and 75% taxable, payment by payment, with the tax-free quarter tested against the lump sum allowance. Flexi-access drawdown works the other way round: the tax-free cash is taken once, as a PCLS at designation, so every later income payment is taxable in full. Both routes produce the same overall split — the difference is when the tax-free element arrives.
PTM063300 · FA 2004 Sch 29 para 4A · ITEPA 2003 s.579A
Stacked as non-savings income, taxed by the marginal method
The taxable element is pension income under ITEPA 2003 Part 9 — non-savings income, sitting at the bottom of the income-tax computation, below savings and dividends in the statutory ordering. The tax a withdrawal actually costs is therefore the marginal difference: the year’s tax with the taxable element included, minus the year’s tax without it. A slice can start in one band and finish in another, which is why the effective rate on the withdrawal rarely equals a single headline rate.
ITEPA 2003 s.579A · ITA 2007 s.16
The £100,000 personal-allowance taper
The taxable element counts in adjusted net income. Above £100,000 the personal allowance is withdrawn at £1 for every £2 of income over the threshold, reaching zero at £125,140 — so a withdrawal that lifts income across that zone loses allowance as well as paying tax, an effective marginal rate of about 60% in the rest of the UK (higher in Scotland) on the affected slice. The tool reports the allowance stripped separately, and the cost is already inside the tax figure it shows.
— Worked example
- Tax-free element (25%)
- £10,000
- Taxable element (75%)
- £30,000
- Tax on the other income alone
- £1,486
- Tax on other income plus the taxable element
- £7,486
- Tax attributable to the withdrawal
- £6,000
- Net in the member’s pocket
- £34,000
- Effective marginal rate on the taxable element
- 20%
Figures computed live by the same engine the tool above runs. Here the taxable element sits wholly inside the basic-rate band on top of the other income, so the effective rate equals the basic rate — larger slices straddle bands and can cross the £100,000 personal-allowance taper.
— Frequently asked questions
How much tax will I pay on my pension lump sum?
For a UFPLS, 25% is tax-free within the lump sum allowance and 75% is taxed as income at your marginal rate on top of your other income for the year (PTM063300). There is no flat rate: the taxable element can straddle bands, and a large payment can push adjusted net income past £100,000, where the personal-allowance taper raises the effective rate on the affected slice to about 60% in the rest of the UK.
Do I pay tax on my pension?
Pension income — drawdown payments, annuity income, scheme pensions and the State Pension — is taxable as non-savings income (ITEPA 2003 s.579A). Only the tax-free element escapes: the PCLS taken at crystallisation, or the 25% of each UFPLS, tested against the lump sum allowance. If your total income for the year sits within the personal allowance, no tax is due.
Why was my first withdrawal taxed so heavily?
The first flexible payment from a pension is usually taxed under an emergency month-1 code, which sets only one-twelfth of the allowance and bands against the whole payment — so the provider deducts more than the year actually owes. The over-deduction is reclaimable in-year on form P55, P53Z or P50Z, or comes back through HMRC’s end-of-year reconciliation. The correct annual figure is what this calculator shows.
Does a pension withdrawal affect my personal allowance?
It can. The taxable element counts in adjusted net income, and above £100,000 the personal allowance falls by £1 for every £2 over, reaching zero at £125,140 (ITA 2007 s.35). A withdrawal that lifts income across that zone therefore carries an effective marginal rate of about 60% in the rest of the UK on the affected slice. The tax-free element does not count towards adjusted net income.
— When you're ready
Several withdrawals to plan across a year, or a full crystallisation position? The pension workbench builds the whole picture and saves it to a client.
With a free account, the same engine runs inside the workbench:
- save the calc to a client file, with the audit trail and sign-off workflow
- export the branded compliance annex PDF — full working, legislative references, config version
- multi-gain, multi-scheme and prior-year history the single-screen tools don't take
- upload statements and certificates — the figures are extracted for your review
Free plan: 3 calcs / month · no card required · cancel any time. Unlimited on Pro and Firm.
— Related
- Pension withdrawals: the complete guide
- UFPLS calculator — the 25/75 split and the lump sum allowance test
- Pension emergency tax calculator — the month-1 over-deduction and the reclaim
- How pension withdrawals are taxed — the complete picture
- Lump sum allowance calculator — how much tax-free cash is left
- How every figure is verified against the HMRC corpus
For planning and illustration purposes only · Verify all inputs against source documents · This tool does not constitute financial or tax advice.