UK Pension Calculator
See how your pension could grow with tax relief, employer contributions, and compound returns. Model your projected pot, 25% tax-free lump sum, and drawdown income.
Pot growth over time
Pot breakdown at retirement
Year-by-year projection
| Year | Age | Your total | Employer total | Tax relief | Growth | Pot value |
|---|---|---|---|---|---|---|
| 1 | 31 | £2,250 | £1,350 | £450 | £703 | £14,753 |
| 2 | 32 | £4,500 | £2,700 | £900 | £1,643 | £19,743 |
| 3 | 33 | £6,750 | £4,050 | £1,350 | £2,832 | £24,982 |
| 4 | 34 | £9,000 | £5,400 | £1,800 | £4,284 | £30,484 |
| 5 | 35 | £11,250 | £6,750 | £2,250 | £6,011 | £36,261 |
| 10 | 40 | £22,500 | £13,500 | £4,500 | £19,276 | £69,776 |
| 15 | 45 | £33,750 | £20,250 | £6,750 | £41,802 | £112,552 |
| 20 | 50 | £45,000 | £27,000 | £9,000 | £76,146 | £167,146 |
| 25 | 55 | £56,250 | £33,750 | £11,250 | £125,573 | £236,823 |
| 27 | 57 | £60,750 | £36,450 | £12,150 | £150,465 | £269,815 |
How pension tax relief works
Every pound you put into a pension gets topped up by the government. Basic-rate taxpayers get 20% relief automatically — a £100 contribution only costs you £80. Higher-rate taxpayers claim an extra 20% through self-assessment, meaning £100 into the pension costs just £60. Additional-rate taxpayers reclaim 25%, reducing the effective cost to £55.
This is the single best tax break available to UK earners. Nowhere else does the government hand you 20–45% on every pound saved. The annual allowance for 2025/26 is £60,000, and contributions above this trigger a tax charge that claws back the relief.
SIPP vs workplace pension
A Self-Invested Personal Pension (SIPP) gives you full control over your investments — you pick the funds, shares, or bonds. Workplace pensions are simpler (your employer chooses the provider) but typically offer a limited fund range. The tax relief is identical. If your employer matches contributions, maximise the workplace scheme first — employer match is free money that no SIPP can replicate. Then top up a SIPP for the investment flexibility.
The 25% tax-free lump sum
At retirement (currently from age 55, rising to 57 from 2028), you can take 25% of your pension pot as a tax-free lump sum, up to a maximum of £268,275. The rest is taxed as income when you draw it down. A £500,000 pot gives you £125,000 tax-free immediately, with £375,000 to provide retirement income. At a 4% sustainable withdrawal rate, that is £15,000 per year from private pension alone — before the state pension.
State pension on top
The full new state pension is £230.25 per week (£11,973 per year) for 2025/26. You need 35 qualifying years of National Insurance to get the full amount. It is paid from state pension age (currently 66, rising to 67 by 2028 and 68 by 2046). The state pension is taxable income but is paid gross — HMRC collects the tax by adjusting your tax code on other income, or through self-assessment if you have no other PAYE income.
This calculator is for illustrative purposes only and does not constitute financial advice. Projected returns are hypothetical and not guaranteed — investments can go down as well as up, and you may get back less than you invest. Tax treatment depends on individual circumstances and may change. Pension rules are complex and this calculator uses simplified assumptions. You should seek independent financial advice before making pension decisions. GiltEdge is not regulated by the FCA.