Pension Tax Calculator 2025/26

Calculate how much Income Tax you’ll pay on pension income for the 2025/26 tax year. Includes State Pension, private pensions, tax-free lump sums and flexible drawdown.

Pension Tax Calculator (2025/26)

Estimate the tax you may pay when withdrawing money from your pension pot.

Estimates only — based on 2025/26 UK income tax bands.

Ready
Description Amount (£)
Tax-Free Amount £0.00
Taxable Amount £0.00
Estimated Tax Due £0.00
Net Received £0.00

 

Pension Tax Rates & Allowances 2025/26

Income Tax Bands (England, Wales & Northern Ireland)
Band Income Range Rate
Personal Allowance £0 – £12,570 0%
Basic Rate £12,571 – £50,270 20%
Higher Rate £50,271 – £125,140 40%
Additional Rate Over £125,140 45%

These bands apply to England, Wales and Northern Ireland. If you live in Scotland, different rates apply — use our Scotland Income Tax Calculator. For Welsh taxpayers, see the Wales Income Tax Calculator. Full band details are published on GOV.UK – Income Tax rates and allowances.

Pension Lump Sum Rules
Tax-Free Lump Sum Up to 25% of your total pension pot
Tax on remainder Taxed as normal income using rates above

HMRC guidance on tax-free lump sums is available at GOV.UK – Tax when you get a pension.

Types of Pension Income Taxed
  • State Pension
  • Private pension (drawdown)
  • Annuity income
  • Company/Workplace pensions
  • Taxable part of lump sums

Pension providers usually apply an emergency tax code to the first lump sum withdrawal.

How Pension Tax Works in 2025/26

Pension income is taxed in the same way as salary. You receive a Personal Allowance, and your total pension income (State + private) determines your tax band. Use our Income Tax Calculator to see how pension income sits alongside other earnings.

This calculator applies all HMRC pension tax rules for 2025/26.

Pension Tax Examples (2025/26)

Pension Income: £15,000
  • Personal Allowance covers £12,570
  • Taxable: £2,430
  • Tax @ 20%: £486
  • Net income: £14,514
Pension Income: £40,000
  • Falls fully in basic rate band
  • Total tax: ~£5,486
  • Net: ~£34,514
Withdraw £60,000 Lump Sum
  • Tax-free: £15,000 (25%)
  • Taxable: £45,000
  • Tax: ~£11,500 (mix of basic + higher)
  • Net received: ~£48,500

If your pension pot includes investment gains, you may also have Capital Gains Tax or Investment Income Tax to consider.

Frequently Asked Questions

Yes — the State Pension counts as taxable income, even though it is paid without tax deducted. The full new State Pension is currently £11,502.40 per year (2025/26). See GOV.UK – What you will get from the State Pension for the latest figures.

Normally 25% of your total pension pot can be taken tax-free when you first access it, up to a maximum of £268,275 (the Lump Sum Allowance as set by HMRC). The remainder is taxed as income. If you have other income sources, our Income Tax Calculator can help you estimate the combined tax liability.

Pension drawdown (also called income drawdown or flexi-access drawdown) lets you keep your pension pot invested and withdraw money flexibly, rather than buying an annuity. Each withdrawal is taxed as income via PAYE. For more detail see GOV.UK – Flexi-access drawdown.

No — once you reach State Pension age you stop paying National Insurance, even if you continue working. Pension income itself is never subject to National Insurance. Use our National Insurance Calculator to check your NI position before retirement.

This Pension Tax Calculator uses official HMRC 2025/26 tax bands, State Pension rules and private pension withdrawal rules including lump-sum taxation. You may also find our Savings Interest Tax Calculator and Inheritance Tax Calculator useful for retirement planning.