Pension Tax-Free Lump Sum Calculator 2026/27
Work out your 25% tax-free cash, whether the £268,275 Lump Sum Allowance caps it, and the tax on anything else you take, either all at once or in phased withdrawals.
Last updated: October 2026 · 2026/27 rates
Your pension
Salary, State Pension, other pensions, rental profit.
Tax-free cash taken from other pensions. Leave at 0 if this is your first.
Tax-free cash you can take
£50,000.00
25% of your £200,000 pot. Nothing else is taxed until you draw it.
All at once or phased: same £200,000 pot
| Approach | Tax-free cash | When |
|---|---|---|
| Tax-free cash up front | £50,000 | Day one |
| Phased, £20,000 a year | £50,000 | Over 10 years |
Phased totals ignore investment growth; with growth, phasing gives more tax-free cash because each withdrawal is 25% of a larger pot, until the Lump Sum Allowance runs out. Phasing with £20,000 of other income costs £30,000 in income tax in total across those years.
How the tax-free lump sum works
You can usually take up to 25% of a defined contribution pension tax-free. The most you can take in tax-free lump sums across all your pensions is the Lump Sum Allowance of £268,275, so 25% only applies in full to pots up to £1,073,100. Everything else you draw is taxed as income in the year you take it, added to your other income, at your usual rates.
There are two ways to take it. A pension commencement lump sum pays the whole tax-free amount at once and moves the rest into drawdown (or uses it to buy an annuity), where it stays invested and untaxed until you draw it. An uncrystallised funds pension lump sum (UFPLS) takes cash straight from the pot: each payment is 25% tax-free and 75% taxable.
You can normally access your pension from age 55. The normal minimum pension age rises to 57 on 6 April 2028. Our pension drawdown calculator shows how long the rest of the pot could last.
£200,000 pot. 25% is £50,000, well inside the Lump Sum Allowance, so you can take all of it tax-free and leave £150,000 in drawdown.
£1,500,000 pot. 25% would be £375,000, but tax-free cash is capped at £268,275. The other £1,231,725 is taxable when withdrawn, so the effective tax-free share is 17.9%.
A £20,000 UFPLS with no other income. £5,000 is tax-free and £15,000 is taxable. After the Personal Allowance the tax due for the year is £486.00. On an emergency Month 1 code the provider could deduct about £5,128.88, so roughly £4,642.88 would need reclaiming.
Phasing a £100,000 pot at £20,000 a year. Over 5 years you get £25,000 tax-free, the same 25%, and with no other income the taxable £15,000 each year costs just £486.00. Taking the £75,000 taxable balance in a single year instead would push most of it into higher rate tax.
Pension withdrawal calculators
This calculator is part of a family. The main calculator covers the general case.
Main calculator: Pension Drawdown Calculator
How long a pension pot lasts at a chosen annual withdrawal, with the 25% tax-free lump sum.
Related calculators
Other free UK tools that follow on from this calculation.
Pension Drawdown Calculator
How long a pension pot lasts at a chosen annual withdrawal, with the 25% tax-free lump sum.
Annuity Calculator
Convert a pension pot into a guaranteed retirement income, single or joint life.
Income Tax Calculator
PAYE tax, National Insurance and take-home pay for any UK salary, including Scotland.
Inheritance Tax Calculator
IHT at 40% (or 36% with 10% to charity) using both nil-rate bands and spouse transfers.
Reviewed by Alexandre Bernier, LLM (UK), CFP®
Educational tool: estimates only. Not individual financial, investment, tax or legal advice. Using it does not create an adviser-client relationship. Rules and figures change; check them against current HMRC and GOV.UK guidance and speak to a qualified professional. Editorial policy →
Sources
Every rate and threshold used by this calculator is taken from the official pages below. If a figure here disagrees with one of these, the official page is right, please tell us.