Pension withdrawal tax calculator
- See the 25% tax-free portion
- See the income tax due on the rest
- See what you actually receive
- Handles other income and the £100k allowance taper
- No sign-up required
Pension withdrawal tax calculator
Enter how much you want to take and your other income for the year. This shows the tax-free 25%, the tax on the rest at 2026/27 rates, and your net cash. England, Wales and Northern Ireland rates.
| Withdrawal | £40,000 |
| Tax-free portion | £10,000 |
| Taxable portion | £30,000 |
| Taxed at 20% | £6,000 |
| Taxed at 40% | £0 |
| Taxed at 45% | £0 |
| Total tax on withdrawal | −£6,000 |
| Net cash received | £34,000 |
This is an estimate, not financial advice, and not a recommendation to withdraw. Pension tax depends on your full circumstances. Speak to a regulated adviser or the free government service Pension Wise before taking money out. Source: gov.uk tax on your private pension.
Sources
- Tax on your private pension contributions and withdrawals gov.uk
- Income tax rates and personal allowance 2026/27 gov.uk
- Pension Wise free guidance appointments MoneyHelper
How pension withdrawals are taxed
When you take money out of a defined contribution pension from age 55 (rising to 57 in 2028), the tax works in two parts. The first 25% is normally tax-free. The remaining 75% is treated as income and taxed at your normal rates once it's added on top of anything else you earn that year. That stacking is the part people get wrong, and it's where big tax bills come from.
Take a simple case. You withdraw £40,000 and have £20,000 of other income, say a part-time salary or your state pension. £10,000 of the withdrawal is tax-free. The other £30,000 is taxable. Your £20,000 of other income has already used your personal allowance and sits in the basic-rate band, so the £30,000 fits inside the 20% band too. You'd pay about £6,000 tax and receive £34,000. The calculator above runs this for your own figures.
Why a big lump sum can cost more than you think
The taxable 75% sits on top of your other income, so a large one-off withdrawal can push part of it into the 40% higher-rate band, or even 45%. Say you're already earning £50,000 and you pull £40,000 from your pension. The £30,000 taxable part lands almost entirely in the 40% band, so you'd pay around £12,000 tax on that withdrawal rather than £6,000. Same withdrawal, double the tax, purely because of your other income.
The £100,000 trap
There's a nastier version of this. Once your total income for the year passes £100,000, your personal allowance shrinks by £1 for every £2 above that line, and it's gone entirely at £125,140. A pension withdrawal that tips you over £100,000 gets taxed at an effective 60% on the slice between £100,000 and £125,140, because you lose allowance as well as paying 40%. If you're anywhere near that threshold, spreading the withdrawal across tax years usually saves a lot.
Spreading withdrawals to pay less
Because the tax is worked out each year, you can use your personal allowance and basic-rate band fresh every April. Instead of taking £60,000 in one year and paying higher-rate tax on much of it, taking £20,000 a year over three years can keep it all in the 20% band. The tax-free 25% applies each time too under flexi-access drawdown. This is the single biggest lever most people have over their pension tax bill.
Emergency tax on your first withdrawal
Here's a common shock. The first time you take a flexible payment, your provider usually applies an emergency tax code on a month-1 basis. That treats your one-off lump sum as if you're going to take the same amount every month, so it over-taxes you heavily up front. You get the overpayment back, either automatically through your tax code over the year, or by claiming it with HMRC form P55, P53Z or P50Z. The figure this calculator shows is the correct full-year tax, which is what you end up paying once it's all settled.
What to do next
Model your withdrawal above, then think about timing before you act. The free government service Pension Wise gives everyone over 50 a free appointment to talk through their options. For the bigger picture on how much you'll have, use the pension pot calculator, and see what the state pension adds with the state pension estimator.
Common questions
The first 25% of what you take is normally tax-free. The other 75% is added to your other income for the year and taxed at your normal rates: 20% basic, 40% higher, 45% additional, after your personal allowance. So if you take £40,000 and have £20,000 of other income, £10,000 is tax-free, £30,000 is taxable, and you'd pay roughly £6,000 in tax, leaving £34,000.
You can normally take 25% of your pot tax-free, up to a lump sum allowance of £268,275. You can take it in one go, or take 25% of each withdrawal tax-free under flexi-access drawdown or UFPLS. On a £100,000 pot the tax-free cash is £25,000.
The first time you take a flexible payment, providers often apply an emergency tax code on a month-1 basis. That treats the withdrawal as if you'll take the same amount every month, so it over-taxes a one-off lump sum. You claim the overpayment back from HMRC using form P55, P53Z or P50Z, or it corrects itself through your tax code over the year. This calculator shows the correct full-year tax.
Often yes. Because the taxable 75% stacks on top of your other income, taking a large lump sum in one year can push you into the 40% or 45% band. Spreading withdrawals across several tax years, using your personal allowance and basic-rate band each year, can mean paying 20% instead of 40% on much of it. This is why timing withdrawals matters.
It can. The taxable part of a withdrawal counts as income, and once your total income passes £100,000 your personal allowance drops by £1 for every £2 above that, gone entirely at £125,140. A large withdrawal that tips you over £100,000 can be taxed at an effective 60% on the slice between £100,000 and £125,140.