Pension Lump Sum Tax Calculator
Pension lump sum
Usually 25% of what you take is tax-free; the rest is taxed as income on top of your other earnings.
Salary, pension, self-employment etc. before this lump sum.
Most people get 25% tax-free. Adjust if a different amount applies (e.g. a protected lump sum).
The taxable 75% is added on top of your other income, so it can be taxed at more than one rate. We show the exact marginal split below.
Providers often apply emergency tax on the first withdrawal, which you reclaim from HMRC. This calculator shows the correct full-year tax, not the temporary emergency amount.
You keep
from a withdrawal · effective tax
- Tax-free (%)
- Taxable portion
- Tax on it
- Net take-home
This pushes you into a higher band
Part of this withdrawal is taxed at . Spreading it across tax years could lower the tax.
Estimate only. Assumes the lump sum falls in one tax year. Get regulated advice before drawing your pension.
How the taxable part is taxed
The taxable % sits on top of your other income, so it can span several bands.
| Band | Rate | Lump sum in band | Tax |
|---|---|---|---|
| Total tax | |||
Take-home across withdrawal sizes
As the lump sum grows, more of it is taxed at higher rates, so the tax line steepens.
Compare saved scenarios
| Scenario | Tax-free | Tax | You keep | |
|---|---|---|---|---|
Next steps
Pension drawdown
Take income flexibly instead
Income tax
Check your full-year tax bill
Annuity
Buy a guaranteed income
More tools in the calculator hub or read our guides.