Pension Drawdown Calculator
Calculate the tax on your pension withdrawals for 2025/26 or 2026/27. Compare flexi-access drawdown, UFPLS, and full withdrawal strategies. See how your state pension interacts with your Personal Allowance, spot the £100k tax trap, and project how long your pension pot will last.
Amount already taken as a tax-free lump sum — used to calculate your remaining Lump Sum Allowance.
Full new state pension 2025-26. Set to 0 if not yet claiming.
Annual investment growth rate for sustainability projection.
State pension uses most of your Personal Allowance
Your state pension of £11,973 uses 95% of your £12,570 allowance. Almost all drawdown income will be taxed.
Money Purchase Annual Allowance triggered
Taking taxable drawdown permanently reduces your future pension contribution limit from £60,000 to £10,000 for money purchase schemes. This cannot be reversed.
First withdrawal may be overtaxed
Your first pension drawdown payment is often taxed on a Month 1 (emergency) basis — only 1/12th of your Personal Allowance is applied. You can reclaim overpaid tax from HMRC using form P55 or P53Z.
Projected at 4% annual growth
Your pension pot runs out in 12 years
| Year | Opening | Growth | Withdrawal | Tax | Closing |
|---|---|---|---|---|---|
| 1 | £187,500 | +£7,500 | −£20,000 | −£3,881 | £175,000 |
| 2 | £175,000 | +£7,000 | −£20,000 | −£3,881 | £162,000 |
| 3 | £162,000 | +£6,480 | −£20,000 | −£3,881 | £148,480 |
| 4 | £148,480 | +£5,939 | −£20,000 | −£3,881 | £134,419 |
| 5 | £134,419 | +£5,377 | −£20,000 | −£3,881 | £119,796 |
| 6 | £119,796 | +£4,792 | −£20,000 | −£3,881 | £104,588 |
| 7 | £104,588 | +£4,184 | −£20,000 | −£3,881 | £88,771 |
| 8 | £88,771 | +£3,551 | −£20,000 | −£3,881 | £72,322 |
| 9 | £72,322 | +£2,893 | −£20,000 | −£3,881 | £55,215 |
| 10 | £55,215 | +£2,209 | −£20,000 | −£3,881 | £37,424 |
| 11 | £37,424 | +£1,497 | −£20,000 | −£3,881 | £18,921 |
| 12 | £18,921 | +£757 | −£19,677 | −£3,816 | £0 |
How Pension Drawdown Works
Flexi-Access Drawdown
The most popular option. You can take up to 25% of your pension pot as a tax-free lump sum (up to the Lump Sum Allowance of £268,275). The remainder stays invested and you draw income as needed — but every pound withdrawn is taxed as income at your marginal rate. There's no minimum or maximum annual withdrawal.
UFPLS (Uncrystallised Funds Pension Lump Sum)
An alternative where you don't take the lump sum upfront. Instead, 25% of each individual withdrawal is tax-free and 75% is taxed as income. This can be useful if you want to spread your tax-free entitlement across multiple years rather than taking it all at once.
Full Withdrawal
You take your entire pension pot in one go. 25% is tax-free (capped at the Lump Sum Allowance) and the remaining 75% is added to your income for that tax year. Warning: this almost certainly pushes you into higher tax brackets and may trigger the Personal Allowance taper, resulting in a very high tax bill.
Common Tax Traps
State Pension Squeeze
The full new State Pension is £12,548 in 2026-27 — that's 99.8% of the £12,570 Personal Allowance. This means almost every penny you withdraw from your pension will be taxed. Even a modest drawdown of £10,000 per year on top of the state pension would be taxed at 20% from the first pound.
The £100,000 Trap
If your total income (state pension + drawdown + any other income) exceeds £100,000, you lose £1 of Personal Allowance for every £2 above that threshold. This creates an effective 60% marginal tax rate between £100,000 and £125,140. A one-off large withdrawal can easily trigger this.
Emergency Tax
Your first pension drawdown payment in a tax year is typically taxed on a Month 1 (emergency) basis. HMRC applies only 1/12th of your Personal Allowance, so a £20,000 withdrawal could be taxed as though you earn £240,000 per year. You can reclaim the overpayment from HMRC using forms P55 or P53Z — but it can take up to 30 days.
Money Purchase Annual Allowance
The moment you take any taxable income from your pension (whether flexi-access or UFPLS), your annual allowance for future money purchase pension contributions drops permanently from £60,000 to £10,000. This is irreversible — you cannot undo it once triggered.
How Long Will My Pension Last?
Our sustainability projection models year-by-year withdrawals accounting for investment growth and tax. A 4% real growth rate is a common assumption for a balanced portfolio, though actual returns will vary. The projection uses current tax rates throughout — future rate changes could affect the outcome.
Frequently asked questions
How much of my pension can I take tax-free?
Up to 25% of your pension pot, subject to the Lump Sum Allowance of £268,275. If you have multiple pensions, the LSA applies across all of them combined. Any tax-free amounts you took before April 2024 under the old Lifetime Allowance rules count towards your LSA.
What is flexi-access drawdown?
Flexi-access drawdown lets you take a tax-free lump sum (up to 25%) and then withdraw the rest as and when you need it. All withdrawals from the remaining pot are taxed as income at your marginal rate. You control how much you take each year.
What is UFPLS?
An Uncrystallised Funds Pension Lump Sum takes money directly from your uncrystallised pension pot. Each withdrawal is 25% tax-free and 75% taxable. It's an alternative to taking a separate tax-free lump sum upfront.
What is the Money Purchase Annual Allowance?
Once you take taxable income from flexi-access drawdown or UFPLS, your annual pension contribution limit for money purchase schemes drops permanently from £60,000 to £10,000. This doesn't affect defined benefit pensions.
Will my state pension use up my Personal Allowance?
Almost entirely, yes. The full new State Pension in 2026-27 is £12,548 — leaving just £22 of the £12,570 Personal Allowance for other income. This means virtually all pension drawdown income will be taxed at a minimum of 20%.
What is emergency tax on pension withdrawals?
When you take your first pension drawdown, your provider may not know your full tax situation. They apply a Month 1 (non-cumulative) tax code, giving you only 1/12th of allowances. This typically results in paying too much tax. You can reclaim the overpayment from HMRC.
Sources
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