Used to calculate your tax relief rate
Typical range: 4-7%. Past performance doesn't guarantee future returns.
Projected Pot at 67
£727,313
Tax-Free Lump Sum (25%)
£181,828
Monthly Retirement Income
£2,462.33
after tax (drawdown + state pension)
Years to Go
37
Tax Relief Rate
20.0%
Everything you need to know about pension planning in the UK
How does pension tax relief work?
When you contribute to a pension, the government adds tax relief at your marginal rate. Basic rate (20%) relief is added automatically by your pension provider. Higher (40%) and additional (45%) rate taxpayers claim the extra relief through self-assessment. For every £80 you contribute, £100 goes into your pension if you're a basic rate taxpayer.
What is the Annual Allowance?
The Annual Allowance for 2025/26 is £60,000. This is the total amount you, your employer, and tax relief combined can contribute in a tax year. If you exceed this, you'll face an annual allowance charge.
What is the 25% tax-free lump sum?
When you access your pension (from age 55, rising to 57 in 2028), you can take 25% as a tax-free lump sum, capped at £268,275. The remaining 75% is taxed as income when you draw it down.
What is the 4% drawdown rule?
The 4% rule is a guideline suggesting you can withdraw 4% of your pension pot annually for a sustainable income lasting approximately 25-30 years. It's a starting point — actual sustainable withdrawal depends on investment returns and life expectancy.
State Pension
The full new State Pension for 2025/26 is £230.25/week (£11,973/year). You need 35 qualifying years of National Insurance contributions for the full amount. State Pension age is currently 67, rising to 68 for those born after April 1978.
Important: This calculator provides estimates based on assumptions about growth rates and contributions remaining constant. Investment values can go down as well as up. For personalised advice, consult a qualified financial adviser.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms