2026/27 calculator
Pension withdrawal tax calculator
Take £20,000 from your pension on top of the full State Pension and you pay about £2,996 tax in 2026/27: £5,000 is tax-free and the other £15,000 is taxed at 20%. Your provider may first deduct £5,128 on an emergency code, and you can claim the £2,133 difference back. Try your own figures below.
State Pension, salary and any other pensions. The full State Pension is filled in.
You keep
£17,004
after £2,996 income tax, 15% of the withdrawal
- Tax-free
- £5,000
- Taxable
- £15,000
- Emergency tax at payout
- £5,128
- Claim back
- £2,133
Tax if you spread the taxable part over
- 1 year£2,996
- 2 years£2,991
- 3 years£2,987
- 5 years£2,978
Tax on common pension withdrawals in 2026/27
| Withdrawal | Tax-free | Income tax | You keep | Emergency tax | Claim back |
|---|---|---|---|---|---|
| £10,000 | £2,500 | £1,496 | £8,504 | £1,952 | £456 |
| £20,000 | £5,000 | £2,996 | £17,004 | £5,128 | £2,133 |
| £30,000 | £7,500 | £4,496 | £25,504 | £8,503 | £4,008 |
| £50,000 | £12,500 | £7,496 | £42,504 | £15,253 | £7,758 |
| £100,000 | £25,000 | £22,451 | £77,549 | £32,128 | £9,677 |
25% of each withdrawal tax-free, the full State Pension of £12,548 as other income, rates outside Scotland. Emergency tax uses the 1257L month 1 code.
How pension withdrawals are taxed
Money you take from a defined contribution pension is added to your other income for the tax year and taxed like a salary. Usually a quarter of what you take is tax-free, up to the lump sum allowance of £268,275 over your lifetime. You can take that quarter in one go at the start, or a quarter of each withdrawal. There is no National Insurance on pension income.
The State Pension uses up almost all of the £12,570 Personal Allowance, so for most retired people every taxable pound they draw is taxed at 20% at least. Large withdrawals can push part of the money into the 40% or 45% bands, and income over £100,000 also loses the Personal Allowance at £1 for every £2.
Why your first withdrawal is taxed too much
When you first take taxable money out, your provider usually has no tax code for you, so it uses an emergency code on a "month 1" basis. That treats the payment as if you would get the same amount every month, which squeezes it into a twelfth of each tax band. A one-off withdrawal is often taxed at 40% or 45% even when your real rate is 20%.
Claiming back overpaid tax
You can wait for HMRC to sort it out after the tax year ends, or claim it back straight away:
- P55 if you took part of your pension and are not taking regular payments.
- P53Z if you took the whole pot and have other income.
- P50Z if you took the whole pot and have stopped working with no other income.
HMRC usually repays within 30 days of a claim. If the provider took too little, HMRC collects the rest through your tax code or a Self Assessment return.
Spreading withdrawals to pay less tax
Taking a large sum in one tax year can push it into higher bands. Spreading the same amount over several tax years keeps more of it at 20%, which is why the calculator compares one year with two, three and five.
Withdrawals can cut what you can pay in
Once you take taxable money flexibly, through a partial withdrawal or drawdown income, the Money Purchase Annual Allowance applies: you can only pay £10,000 a year into defined contribution pensions with tax relief, down from £60,000. Taking only your tax-free cash does not trigger it.
Common questions
How much tax will I pay on a pension withdrawal?
It depends on your other income. On top of the full State Pension, taking £20,000 costs about £2,996 in 2026/27: £5,000 is tax-free and the other £15,000 is taxed at 20%. Bigger withdrawals can reach the 40% and 45% bands.
Is the first 25% of my pension tax-free?
Usually yes, up to the lump sum allowance of £268,275. You can take the 25% as one lump sum when you start drawing, or take a quarter of every withdrawal tax-free instead. The rest is taxed as income.
Why was I charged emergency tax on my pension?
Your provider had no tax code for you, so it taxed the payment as if you would get it every month. On a £20,000 withdrawal that can mean about £5,128 deducted instead of £2,996.
How do I claim back emergency tax on my pension?
Use form P55 if you took part of your pension, P53Z if you emptied the pot and have other income, or P50Z if you emptied it and have stopped working. You can claim online or by post, and HMRC usually repays within 30 days.
Does taking money from my pension affect how much I can pay in?
Yes, once you take taxable money flexibly. The Money Purchase Annual Allowance then limits tax-relieved contributions to £10,000 a year. Taking only your tax-free lump sum does not trigger it.
Do I pay National Insurance on pension withdrawals?
No. Pension income, including withdrawals and the State Pension, is subject to income tax only.
Official sources
Every rate and threshold on this page is checked against these official pages. How we calculate
- Tax when you get a pension (GOV.UK)
- Check how to claim a tax refund on your pension (GOV.UK)
- Claim a tax refund on your pension by post (P55, P53Z, P50Z) (HMRC)
- Emergency tax codes (GOV.UK)
- Tax on your private pension: lump sum allowance (GOV.UK)
- Tax on your private pension: annual allowance (GOV.UK)
- Income Tax rates and Personal Allowances (GOV.UK)
- Scottish Income Tax (GOV.UK)
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