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GrowThenDraw Updated for 2026/27

Pension Drawdown Calculator — United Kingdom

Take tax-free cash, leave the rest invested, and see what monthly pension income reaches you after 2026/27 Income Tax — including Scotland's separate bands.

Published by GrowThenDraw Editorial Team · Editorial policy · Methodology & sources

Your pension plan

Usually up to 25%, also limited by your remaining lump sum allowance.

Standard allowance across all pensions: £268,275.

Include State Pension, earnings, rental income and other taxable pensions.

Use an inflation assumption if you want spending power to rise.

Editable planning assumption, not a forecast.

Net monthly pension income, year 1
£2,010
Drawdown fund runs out in year 15
Tax-free cash
£125,000
Opening drawdown fund
£375,000
Total Income Tax
£103,615
Ending balance
£0

The most this drawdown fund can sustain for 30 years under these smooth-return assumptions: £1,403/month before tax.

Annual tax liability estimate; a provider's first PAYE deduction can differ under an emergency code.

£180.7k£361.5kYear 1: balance £361,486, net pension income £24,114Year 2: balance £346,583, net pension income £24,714Year 3: balance £330,207, net pension income £25,329Year 4: balance £312,271, net pension income £25,959Year 5: balance £292,684, net pension income £26,606Year 6: balance £271,349, net pension income £27,268Year 7: balance £248,164, net pension income £27,947Year 8: balance £223,023, net pension income £28,642Year 9: balance £195,813, net pension income £29,356Year 10: balance £166,417, net pension income £30,087Year 11: balance £134,711, net pension income £30,810Year 12: balance £100,564, net pension income £31,386Year 13: balance £63,840, net pension income £31,976Year 14: balance £24,396, net pension income £32,581Y1Y4Y7Y10Y13Y15
Drawdown balanceMoney runs out
Tax-free cash: £125,000Net pension income: £416,623Income Tax: £103,615
Tax-free cashNet pension incomeIncome TaxStill invested
YearGross incomeIncome TaxNet incomeEnd balance
1£30,000£5,886£24,114£361,486
2£30,750£6,036£24,714£346,583
3£31,519£6,190£25,329£330,207
4£32,307£6,347£25,959£312,271
5£33,114£6,509£26,606£292,684
6£33,942£6,674£27,268£271,349
7£34,791£6,844£27,947£248,164
8£35,661£7,018£28,642£223,023
9£36,552£7,196£29,356£195,813
10£37,466£7,379£30,087£166,417
11£38,403£7,593£30,810£134,711
12£39,363£7,977£31,386£100,564
13£40,347£8,371£31,976£63,840
14£41,355£8,774£32,581£24,396
15£24,670£4,820£19,850£0

What this pension drawdown calculator models

This is a flexi-access drawdown projection for a defined-contribution pension. You choose how much tax-free cash to take at the start, up to 25% of the pot and your remaining lump sum allowance. The rest stays invested while you draw a monthly gross income. The calculator applies growth after fund charges, increases the withdrawal each year if you ask it to, and shows when the drawdown fund runs out.

It is deliberately separate from our ISA and general-investment-account withdrawal calculator. Pension drawdown income is taxed as pension income; selling investments in a GIA is normally a capital-gains question. Combining those rules would produce a confident-looking but wrong answer.

The 25% tax-free cash rule, without the shortcut

You can usually take up to 25% of a pension tax-free, but the standard lump sum allowance across all your pensions is £268,275. Enter any allowance already used elsewhere and this calculator caps the upfront cash correctly. Protected allowances and unusual scheme rights can change the answer, so those need your provider or an adviser.

This page models a pension commencement lump sum taken before drawdown. It does not model phased drawdown or an uncrystallised funds pension lump sum (UFPLS), where the tax-free and taxable portions can be mixed differently in each payment.

Income Tax is calculated on all your income

Every pound withdrawn after the upfront tax-free cash is pension income. The calculator adds each year's drawdown to the other taxable income you enter — State Pension, work, rental income or another pension — then applies the 2026/27 bands. It also models the Personal Allowance falling by £1 for every £2 of income above £100,000 and disappearing at £125,140.

Choose Scotland if you are a Scottish taxpayer; its six non-savings income bands are different. England, Wales and Northern Ireland use the three UK bands. The tax shown is the estimated annual liability caused by this drawdown, not necessarily the PAYE deducted from the first payment, which can use an emergency code and later be corrected.

A projection is not a safe-withdrawal promise

The balance path uses the smooth annual return you enter. Real markets arrive in a jagged sequence, and poor returns early in retirement can exhaust a pot sooner even when the long-run average looks acceptable. Use conservative returns, include fund and platform charges, raise withdrawals with inflation, and stress-test several versions rather than trusting one line.

Frequently asked questions

Is pension drawdown income taxable?

Yes. After any permitted tax-free cash, flexi-access drawdown payments are pension income and are taxed at your marginal Income Tax rates. This calculator estimates the extra annual tax caused by the drawdown on top of the other taxable income you enter.

Can I always take 25% of my pension tax-free?

Usually, but the standard lump sum allowance is £268,275 across all your pensions. A protected allowance, previous tax-free cash or unusual scheme rights can change the amount. Enter allowance already used; check the final figure with your pension provider.

Why is the Scotland result different?

Scottish taxpayers use separate rates and bands for pension income. For 2026/27 these run from the 19% starter rate through the 48% top rate. England, Wales and Northern Ireland use 20%, 40% and 45% bands.

Why might my provider deduct more tax from the first payment?

A first flexible pension payment can be put through PAYE using an emergency Month 1 code. That temporary deduction can differ from your final annual liability. This calculator estimates the annual liability; HMRC may adjust later payments or process a refund.

Does flexibly accessing my pension affect future contributions?

Taking taxable flexible income normally triggers the Money Purchase Annual Allowance. It is £10,000 for 2026/27, limiting tax-relieved future defined-contribution pension saving. Merely taking a pension commencement lump sum without taxable income may be treated differently.

What is outside this calculator?

Defined-benefit pensions, UFPLS and phased crystallisation, protected lump sum allowances, Marriage or Blind Person's Allowance, savings and dividend bands, means-tested benefits, emergency PAYE cash flow, adviser or platform fees not entered, and market sequence risk. It is an educational projection, not personal advice.

Rules verified 23 July 2026 against official sources:

Educational projection only, not financial, pension or tax advice. Consider Pension Wise guidance and advice from an FCA-authorised adviser before irreversible pension decisions.