UK Pension Drawdown Tax Calculator
Estimate the additional annual Income Tax caused by a pension withdrawal. Enter the tax-free cash already established by your scheme, then compare net withdrawal across regional bands.
Rule year: 2026/27 · GBP · Sources checked
Net pension withdrawal after incremental annual tax
Eligibility to access the pension and tax-free cash already established; ordinary non-savings income and allowance only. No savings/dividends, foreign residence, protected allowances, UFPLS qualification, emergency PAYE refund timing, benefits interaction, student loans or future-year planning. Pension withdrawal income itself is not charged employee NI here.
For informational purposes only. This estimate is not financial advice, a tax return, a payroll calculation or a lender decision. See the supported circumstances and exclusions below.
How this calculator works
Pension withdrawals can include established tax-free cash and taxable pension income. The taxable portion stacks on other non-savings income, can cross bands and can reduce the ordinary Personal Allowance. This tool calculates annual Income Tax before and after the taxable withdrawal and attributes the difference to it. It does not assume that every withdrawal is 25% tax-free or that a lump-sum allowance remains available.
Formula and rules
Taxable withdrawal = gross − confirmed tax-free cash. Additional tax = annual tax(other income + taxable withdrawal) − annual tax(other income). Net withdrawal = gross − additional tax.
Assumptions and limitations
Eligibility to access the pension and tax-free cash already established; ordinary non-savings income and allowance only. No savings/dividends, foreign residence, protected allowances, UFPLS qualification, emergency PAYE refund timing, benefits interaction, student loans or future-year planning. Pension withdrawal income itself is not charged employee NI here.
Worked example
With £30,000 other income and a £10,000 withdrawal containing confirmed £2,500 tax-free cash in England, £7,500 adds £1,500 annual Income Tax. The modeled net withdrawal is £8,500.
- Net pension withdrawal after incremental annual tax
- £8,500.00
- Additional Income Tax caused by withdrawal
- £1,500.00
- Taxable pension withdrawal
- £7,500.00
- Established tax-free cash entered
- £2,500.00
Official sources and review
Reviewed against the sources below on 2026-10-07. Rates are held in versioned rule modules. Versioned rules, official source review and year-specific calculation tests.
- GOV.UK: taxable pension income ↗
Taxable pension income combines with other income; tax-free amounts depend on actual access method and allowances.
- HMRC: individual lump sum allowances ↗
Standard LSA £268,275 and LSDBA £1,073,100; use established remaining allowances and correct benefit type.
- GOV.UK: Income Tax rates and Personal Allowances ↗
2026/27 allowance £12,570, taper above £100,000, and income bands.
- GOV.UK: Scottish Income Tax 2026/27 ↗
Current Scottish non-savings bands; supplied regional income follows its own schedule.
Common questions
Is a quarter of every withdrawal tax-free?
No. Access method, remaining allowances and scheme facts matter. Enter only independently confirmed tax-free cash; the calculator does not grant it.
Will my pension provider withhold this exact tax?
Not necessarily. Emergency/cumulative PAYE can differ from final annual liability. This models the latter increment.
What is different from Pension Tax-Free Lump Sum?
That page addresses a supported lump-sum allowance scope. This page uses established tax-free cash to estimate the taxable withdrawal’s income-band effect.