Pension drawdown calculator 2026/27
Tax-free cash, then an income taxed as earned income on top of everything else you receive — with what each extra slice would cost, and what the pot does over the term.
Calculator
The defined contribution pot you are drawing from, before anything is taken out. A defined benefit (final salary) pension is not this, and is not modelled here.
Normally up to 25% of the pot can be taken free of income tax. There is also a cash cap on it — the lump sum allowance — and this calculator does not apply that cap. On a large pot the tax-free figure below can therefore be higher than what you could actually take.
A year at a time, before tax. It is paid in 12 equal instalments across the year, and the pot is charged each instalment.
State pension, a salary, rental profit, an annuity — anything taxed as income in the same year.
Leave this at £0 only if it really is £0. The taxable part of a drawdown is earned income and is stacked on top of everything else you receive, so it is taxed at whatever rate your other income has already taken you to. The full new state pension alone uses most of the personal allowance. With this box empty the tax below is too low for most people who are actually in drawdown.
Your assumption, not a rate this page can look up. It is applied at the same rate every period, which is not how returns arrive.
0% is a level income, which buys less every year. Set this to your inflation assumption for an income that keeps pace with prices — the whole schedule changes, because a rising income is real money leaving the pot.
Charged on the value of the pot and deducted from it. A fund's own ongoing charge is taken inside the fund and is not this — enter it, if you want it modelled, by reducing the growth assumption above.
The term the arithmetic runs over. It is not a life expectancy and this page does not have one.
Growth and charges are applied on the same cycle, once per month.
Income tax on a pension withdrawal is devolved, so a Scottish taxpayer meets a different set of bands.
Figures are 2026/27 income tax on the withdrawal. No National Insurance is charged on a pension withdrawal, and none is shown. Emergency tax codes, the lump sum allowance, defined benefit pensions and the high income child benefit charge are not modelled. Every calculation runs in this tab: there is no application server and no database, so nothing you type is transmitted or stored. A share link is the exception — it carries your figures in the URL. What that means.
Your drawdown, taxed band by band — and what the pot does
Year one: what you take, and what it costs
| Tax-free lump sum (25% of the pot) | £100,000.00 |
|---|---|
| Left in the pot to draw an income from | £300,000.00 |
| Taxable income drawn in year one (£1,666.67 a month × 12) | £20,000.04 |
| Your other taxable income | £0.00 |
| Total taxable income for the year | £20,000.04 |
| Income tax on all of it | £1,486.01 |
| Of which the drawdown caused (the bill with it, less the bill without it) | £1,486.01 |
| Income from the pot after that tax | £18,514.03 |
The cap on the tax-free lump sum is not applied here. The 25.00% share is a figure this site checks against gov.uk. The cash limit on it — the lump sum allowance — is not modelled by the tax engine at all, so on a large pot the figure above can be more tax-free cash than you are actually entitled to take. Check the allowance on gov.uk before relying on it.
Where that income is taxed, band by band
| Band | Income in it | Rate | Tax |
|---|---|---|---|
| Basic rate | £7,430.04 | 20.00% | £1,486.01 |
Effective rate on your total income 7.43%. Rate on your next £1 20.00%.
Another £30,270 of income takes you into the Higher rate.
What taking more this year would cost
| If you took | Extra | Total taxable income | Extra tax | Rate on the slice | Rate on your next £1 |
|---|---|---|---|---|---|
| Another £10,000 this year | £10,000 | £30,000 | £2,000 | 20.00% | 20.00% |
| Enough to take your income past £100,000 | £80,001 | £100,001 | £25,946 | 32.43% | 60.00% |
| The rest of the pot, taken this year | £280,000 | £300,000 | £119,717 | 42.76% | 45.00% |
Above £100,000 of total income the personal allowance is withdrawn at £1 for every £2 above it. A pound taken there is taxed at its band rate and exposes another £0.50 that the allowance was covering, so the rate on your next pound is half as much again as the band rate — over 60% for a higher-rate taxpayer in England, Wales or Northern Ireland, and higher still in Scotland. The last column above is that rate at each slice. A single large withdrawal is the most common way to land there by accident, because the whole of it counts as income in one tax year.
What happens to the pot
This half of the page is arithmetic, not a forecast. It is what would happen if the pot grew at exactly 5% every single month for 30 years, which nothing does. Real returns arrive in an order, and the order changes the answer — badly so once money is being withdrawn, because a poor first few years sells more of the pot to pay the same income. There is no statutory figure in this part of the calculation and nothing here has been checked against gov.uk, because a growth assumption is not the sort of thing an authority could confirm.
| Paid out over 30 years | £514,023.92 |
|---|---|
| Growth over the term, after charges taken inside the pot | £225,607.62 |
| Charges deducted from the pot | −£11,583.70 |
| Left in the pot after 30 years | £0.00 |
On these assumptions the income is first short in year 26, and the pot pays nothing after that. That is the year the requested payment cannot be made in full — not the year the balance reaches zero, which is the more useful of the two answers and the earlier one.
The largest level income this pot pays in full, every month, for the whole 30 years on these assumptions is £18,537 a year. That is a statement about this arithmetic and nothing else: it is not a rate this page recommends, it is not a rate anyone has judged prudent, and changing the growth assumption changes it. What it does not know is how long you will live, what returns will actually do or in what order, what you will need in a year you had not planned for, or what your income will have to buy by then.
What drawing an income does to future contributions
Taking taxable income out of a defined contribution pot — as opposed to taking only the tax-free lump sum — triggers the money purchase annual allowance. From that point the most that can go into money purchase pensions each year, with tax relief, falls from £60,000 to £10,000, a drop of £50,000. Unused allowance from earlier years cannot be carried forward against it, and it does not reset. This catches people who take an income while still working, and it is the consequence readers are least likely to have been told about.
Two things this page does not do with that figure: it does not apply the taper that reduces the annual allowance for high earners, because the two income measures the taper is based on have statutory definitions this page does not collect; and it treats the allowance as one flat limit, where a member with both a money purchase and a defined benefit scheme really has two.
Worked example: a 2026/27 drawdown from a £400,000 pot
These are the figures the calculator above loads with, so every number in this section can be checked against it without typing anything. A £400,000.00 pot, the full 25% taken as tax-free cash, £20,000.00 a year drawn as taxable income, no other income, 5% a year assumed growth, a 0.25% platform charge, over 30 years in 2026/27.
| Tax-free lump sum | £100,000.00 |
|---|---|
| Left in the pot to draw from | £300,000.00 |
| Taxable income drawn in year one | £20,000.04 |
| Income tax on it | £1,486.01 |
| Income from the pot after that tax | £18,514.03 |
| Rate on the next £1 of income | 20.00% |
| Left in the pot after 30 years | £0.00 |
Three things in that table are worth pausing on.
- The lump sum leaves the pot before anything is projected. The £300,000.00 figure, not the £400,000.00 one, is what grows and what the income comes out of. A calculator that projects the whole pot and then subtracts the cash grows money that has already been spent, for the whole term.
- The tax is on the withdrawal alone here only because the other-income box is empty. Put a state pension in it and the same £20,000.04 withdrawal costs more, because it is stacked on top rather than starting again at the personal allowance.
- Taking more in one year is not charged at “your rate”. Taking an extra £80,001 this year adds £25,946 of tax — an average of 32.43% across the slice — and leaves the next pound charged at 60.00%, because total income above £100,000 withdraws the personal allowance as well as being taxed.
Methodology and sources
Two engines, and which claim belongs to which
This page is two calculations joined at one figure. What the pot does — growth, charges, the income coming out, how long it lasts — is a projection. What the income costs is income tax. They are computed by different code, they rest on different kinds of claim, and the rest of this section keeps them apart on purpose.
The pot, period by period
There is one loop and it is the only place money moves. The tax-free lump sum is taken out first, so the projection opens on what is left. Then, for each period: apply the period’s growth; deduct the platform charge; take the withdrawal last. Every figure is a whole number of pence and every row satisfies opening + growth − charges − withdrawal = closing exactly, so the headline cannot disagree with the schedule it was read off.
The balance floors at zero. A withdrawal larger than the pot is truncated to what is there, and once a payment cannot be made in full the income stops for good — the page reports that period rather than the period the balance hits zero, because the first short payment is the one the reader needs to know about. It also means the taxable income this page taxes is what the pot actually paid, which on a failing plan is less than what was asked of it.
The projection makes an arithmetic claim, and no other
There is no statutory figure anywhere in this half of the calculation. The growth rate, the charge, the term and the income are all yours, and there is nothing in them an authority could confirm, because a growth assumption is not the sort of thing that can be correct. So this part carries no gov.uk verification claim and it will not borrow one from the tax half below. The claim it makes is arithmetic: given these inputs and the conventions above, the schedule is right and every figure is read off it.
A fixed-rate projection is not a forecast. Nothing grows at the same rate every period. Real returns arrive in an order, and the order changes the outcome — worse here than on a pot that is only being paid into, because a poor run of years early on sells more of the pot to fund the same income, and the pot never recovers the units it sold. Treat every figure about the pot as what a constant rate would have produced.
The tax on what you take out
Normally 25% of a defined contribution pot can be taken free of income tax. The rest is taxed as earned income in the year it is withdrawn, which is the fact that makes most drawdown calculators wrong: it is added to your other income and taxed at whatever rate that income has already taken you to, rather than starting again at the personal allowance. So the withdrawal and the other-income box go into the tax engine together, and the tax attributable to the drawdown is measured — the bill with it, less the bill without it — rather than derived from a rate.
Above £100,000 of total income the personal allowance is withdrawn at £1 for every £2 of income, so a pound taken there is taxed at its band rate and exposes another £0.50 besides. The rate on the next pound is half as much again as the band rate — over 60% in England, Wales and Northern Ireland, more in Scotland. One large withdrawal is the usual way into it, and the panel above measures the cost rather than describing it.
No National Insurance is charged on a pension withdrawal, at any age, so none is shown.
Where the tax figures come from
- gov.uk — Income tax rates and allowances: current and past
- gov.uk — Tax when you get a pension
- gov.uk — Pension schemes rates and allowances
- gov.scot — Scottish income tax rates and bands
The income tax rates, thresholds and allowances this page calculates with — and the 25.00% tax-free share — were verified against gov.uk on 12 August 2026. That check covers the published figures used by the tax half of this page and nothing else. It does not verify any figure the page produces, and it does not reach the projection at all: the growth rate, the charge and the term have no published source to be checked against. The check was carried out automatically and no named person has signed it off. Check anything that matters against gov.uk, or with an accountant or a regulated adviser.
What this calculator does not model
- The lump sum allowance — the cash cap on tax-free cash. The 25.00% rate is in the tax engine and is verified; the cap on it is not in the engine at all, and it is not applied here. On a large pot this page shows more tax-free cash than could actually be taken.
- Emergency tax on a first withdrawal. A provider commonly operates a month-1 code on the first payment, which taxes it as though it were the first of twelve identical ones and takes far too much. It is reclaimed, but not until it is claimed back or the year ends. This page shows the tax-year position, not the payslip.
- Defined benefit pensions, annuities bought with the pot, and the different tax treatment of a pot inherited on death.
- The annual allowance taper, which reduces the annual allowance for high earners. It depends on threshold income and adjusted income, two statutory measures with definitions this page does not collect, so the allowance figures shown are the standard, untapered ones. Carry forward is not offered either: it needs three prior years of contributions and allowances, and it cannot be used against the money purchase annual allowance in any case.
- Inflation as a change of units. The schedule is in nominal money throughout. Increasing the income each year is the way to express an income that keeps pace with prices, and it changes the plan rather than the units — which is the honest one of the two, because a rising income really does empty the pot faster.
- Anything about you. No life expectancy, no health, no partner, no other savings, no care costs, no state pension age. This is information, not advice: it does not recommend an income, a rate, a product or a provider, and no figure on it is a personal recommendation.
Nothing you type here is transmitted or stored — there is no application server and no database. A share link is the exception: it carries your figures in the URL, and opening one is an ordinary request that carries them to the host. What that means.
Pension drawdown questions
- How much tax will I pay on a pension drawdown?
Normally 25% of the pot can be taken free of income tax, and the rest is taxed as earned income in the year you take it. That means it is added to everything else you receive that year — the state pension, a salary, rental profit — and taxed at the rates your other income has already reached, not from scratch. On the calculator's default figures a £400,000.00 pot with the full lump sum taken and £20,000.00 drawn costs £1,486.01 in income tax with no other income, and more than that for anyone who has some. No National Insurance is charged on a pension withdrawal.
- Is 25% of my pension really tax-free?
The rate is: normally 25% of a defined contribution pot can be taken free of income tax. There is also a cash cap on it, the lump sum allowance, which bites on large pots — and this calculator does not apply that cap, because the tax engine behind it does not model it. So the tax-free figure shown here is right on an ordinary pot and too high on a big one. Check the allowance on gov.uk before acting on the figure.
- Why is my marginal rate over 60%?
Because total income above £100,000 withdraws the personal allowance at £1 for every £2 of income. A pound taken in that zone is taxed at its band rate and also exposes another 50p that the allowance had been covering, so the effective rate on the next pound is half as much again as the band rate — over 60% in England, Wales and Northern Ireland and higher in Scotland. A single large drawdown withdrawal is the usual way to end up there, because the whole of it counts as income in one tax year. The panel above measures what each extra slice would actually cost.
- How long will my pension pot last?
That depends entirely on the growth rate, the charges and the income you take, all of which are assumptions rather than facts. On the figures above the calculator states two things: the year the requested income would first fall short, and the largest level income the pot would pay in full for the whole term. Both are arithmetic on the assumptions on screen — change the growth rate and both change. Neither is a recommendation, and neither knows how long you will live or in what order returns will arrive, which is the part that matters most when money is being withdrawn.
- What withdrawal rate should I take?
This page will not answer that, and no calculator honestly can. It is information, not advice: it does not know your health, your other savings, whether you have a partner, what you would need in a bad year, or how long the money has to last. What it can do is show what a rate you choose does to the pot and what it costs in tax, and let you try several and look at the spread. A decision that matters is worth taking to a regulated financial adviser — Pension Wise, the free government guidance service, is a sensible first stop.
- Does taking money out affect how much I can pay in?
Yes, and this is the consequence people are least often told about. Taking taxable income out of a defined contribution pot — as opposed to taking only the tax-free lump sum — triggers the money purchase annual allowance. From then on the most that can go into money purchase pensions each year with tax relief drops from £60,000 to £10,000, unused allowance from earlier years cannot be carried forward against it, and it does not reset. It catches people who take an income while still working.
- Why did my provider take so much tax on my first withdrawal?
Almost certainly an emergency tax code. Providers commonly tax a first flexible payment on a month-1 basis, which treats the payment as though it were the first of twelve identical ones — so a one-off withdrawal is taxed as though you were going to take twelve of them, and far too much comes off. It is reclaimable, either through an HMRC form or at the end of the tax year. This calculator shows the tax-year position, which is what you end up with, not what comes off the first payment.
- Does this account for inflation?
Only if you tell it to. The schedule is in nominal money and a level income buys less every year. The "increase the income each year" box is how you express an income that keeps pace with prices: set it to your inflation assumption and the whole schedule changes, because a rising income is real money leaving the pot faster. It is deliberately not a display toggle — restating the answer in today's money would leave the plan unchanged, and an inflation-linked income is a different plan.
- Is this a prediction of what I will get?
No. The tax half applies published rates that this site checks against gov.uk and dates on the page. The pot half applies no published figure at all — it computes what would happen if one growth rate held exactly, every period, for the whole term. Real returns arrive as a sequence, and the sequence matters far more once money is being taken out than while it is only going in. Treat the tax as arithmetic on verified rates and the projection as arithmetic on an assumption you supplied.