UK Pension Calculator
Project your workplace or personal pension pot to retirement, then see the tax-free lump sum, the drawdown income it supports and how the State Pension fits alongside it.
Two Pounds In, One From You
A basic-rate taxpayer paying 4% of pensionable pay gets 1% from HMRC and 3% from an employer, so 8% lands in the pot for every 4% that leaves your pay. This calculator follows each of those pounds, net of charges, all the way to your retirement date.
Understanding UK Pensions
Qualifying Earnings Are Not Your Salary
Auto-enrolment percentages apply by default to a slice of pay, not the whole of it. Earnings below the lower limit and above the upper limit are stripped out before the percentages bite.
- On a £35,000 salary the band leaves about £28,760 of pensionable pay
- The headline 8% therefore lands closer to 6.6% of actual salary
- Some employers use full salary, or a definition based on basic pay only
- Your annual benefit statement names the basis your scheme uses
Two Ways Relief Reaches Your Pot
The label on your payslip decides how relief is delivered, and the two routes are not equivalent for everyone.
- Relief at source: you pay from net income and the provider reclaims 20% from HMRC, so £80 becomes £100
- Net pay: the contribution leaves gross salary, so relief happens automatically at your top rate
- Salary sacrifice: you swap salary for an employer contribution, which also saves National Insurance for both sides
- Non-taxpayers get relief only under relief at source, on up to £2,880 net a year
Charges Compound Against You
A charge looks trivial next to an expected return, but it is levied on the whole fund every year, including on the growth it has already suppressed.
- The auto-enrolment default fund charge is capped at 0.75% a year
- Over a forty-year term, 0.75% can absorb roughly a sixth of the final pot
- Old workplace and pre-2001 personal pensions often charge far more
- Compare the ongoing charges figure, not just the platform fee, before consolidating
What Happens When You Draw It
A defined contribution pot is not an income until you turn it into one, and each route has different tax and longevity consequences.
- Drawdown: the pot stays invested and you withdraw flexibly, carrying the risk of running out
- Annuity: converts the pot into a guaranteed income for life, giving up the capital
- Tax: a quarter is normally tax free, the rest is taxed as income when withdrawn
- Money purchase annual allowance: flexibly accessing your pot cuts what you can pay in afterwards to £10,000 a year