When can I access my UK pension pot?

You can normally access a defined-contribution pension from age 55 (rising to 57 from 6 April 2028). Earlier access is only allowed if you retire because of ill health or have a protected pension age (for example a right under a scheme joined before 6 April 2006). If you are expected to live less than a year, are under 75 and your pot is within your lump sum and death benefit allowance, you may be able to take the whole pot tax-free. Once eligible, you can take the whole pot, draw down income flexibly, buy an annuity, or mix all three - this is what 'pension freedoms' has meant since April 2015.

How does the 25% tax-free lump sum work?

Each time you crystallise pension funds, 25% of the crystallised amount can be taken as a tax-free Pension Commencement Lump Sum (PCLS). The remaining 75% is designated for drawdown (or annuity) and is taxable when drawn. Since 6 April 2024 the lifetime tax-free entitlement is capped by the £268,275 Lump Sum Allowance (LSA), which replaced the Lifetime Allowance. The cap only binds once your total crystallised pensions exceed £1,073,100 (four times the LSA), unless you hold a protection.

What is the Money Purchase Annual Allowance (MPAA)?

The MPAA is a £10,000 annual cap on tax-relieved DC pension contributions that bites once you 'flexibly access' your pension - the most common trigger being taking any taxable income from drawdown (even £1). Once triggered, it cannot be undone. DC contributions above £10,000 a year trigger an annual allowance charge on the excess, and carry forward cannot be used to cover it. Taking a 25% PCLS on its own (with no taxable income from the same crystallisation event) does NOT trigger the MPAA - useful for savers who want to ring-fence their future contribution allowance.

How is pension drawdown income taxed?

Taxable drawdown is paid through PAYE by your provider and taxed at the same Income Tax rates as salary. National Insurance does not apply to pension income. Withdrawals stack on top of any other taxable income you have that year (salary, State Pension, rental income), which is why a large one-off withdrawal can push you into a higher band; spreading drawdown across multiple tax years often saves tax.

What happens to my pension when I die?

If you die before age 75, defined-contribution funds can usually be paid to beneficiaries free of Income Tax, subject to time limits for paying or designating them and, for lump sums, your lump sum and death benefit allowance. From age 75 onwards beneficiaries pay Income Tax at their own rate on what they draw. Unused pension funds are currently usually outside the estate for Inheritance Tax, but Finance Act 2026 ss.66-71 bring most of them into the estate for deaths on or after 6 April 2027.

How long will my pension pot last?

Nobody can tell you in advance: it depends on investment returns, inflation, charges and how long you live. A 4% initial withdrawal is a commonly quoted rule of thumb, not a guarantee. This calculator's 'sustainability' figure is a simple illustration, not a forecast: it scales a 30-year anchor at 4% inversely with your withdrawal rate (8% shows 15 years, 2% shows 60) and does not model returns or inflation.

Is UFPLS different from flexi-access drawdown?

Uncrystallised Funds Pension Lump Sum (UFPLS) lets you take ad-hoc chunks straight from the uncrystallised pot, with 25% of each chunk tax-free and 75% taxable. Flexi-access drawdown by contrast crystallises a tranche of the pot upfront - 25% PCLS paid at that point, 75% moved into a drawdown wrapper from which you can take income flexibly. A UFPLS always triggers the MPAA; drawdown triggers it when you first take taxable income. Both are subject to the £268,275 Lump Sum Allowance on the tax-free portion. UFPLS suits ad-hoc withdrawals; drawdown suits regular retirement income.

£150,000 Pension Pot: UK Drawdown 2026/27

A UK defined-contribution pension pot of £150,000 can fund up to £37,500 as a tax-free Pension Commencement Lump Sum (25% of the pot, capped at the £268,275 Lump Sum Allowance). At a 4% annual withdrawal rate, a commonly quoted rule of thumb rather than a guarantee, that gives £6,000 gross taxable income (about £6,000 net alongside the full State Pension). How long the pot lasts depends on returns, charges, inflation and how long you live. Taking any taxable drawdown triggers the £10,000 Money Purchase Annual Allowance on future contributions. Verified against gov.uk - tax on pension.

25% tax-free lump sum

£37,500

Within the £268,275 LSA cap

4% draw (annual)

£6,000

Net £6,000 alongside State Pension

Sustainability (illustration)

~30 years

Assumes 30 years at 4%, scaled; not a forecast

How drawdown works on a £150,000 pot

Reach age 55 (rising to 57 from April 2028) - or earlier with severe ill-health or a protected pension age - to access this DC pot under the post-2015 pension freedoms.
Take up to 25% of the £150,000 pot as a tax-free Pension Commencement Lump Sum: £37,500 .
The remaining 75% (about £112,500) moves into a flexi-access drawdown wrapper, from which you can draw taxable income at any rate. Income is taxed via PAYE at your marginal rate; National Insurance does NOT apply.
At the commonly quoted 4% rule of thumb you'd draw £6,000 taxable income per year (about £6,000 net alongside the full State Pension).
Drawing any taxable income triggers the £10,000 Money Purchase Annual Allowance: future tax-relieved DC contributions are capped at £10,000/year (down from the £60,000 standard annual allowance).

All 16 drawdown scenarios at £150,000

Net drawdown, Income Tax via PAYE, and pot remaining for each withdrawal rate, region, and other-income profile. Adjust interactively on the main calculator.

Other income	Region	Draw rate	Gross draw	Income Tax	Net draw	Pot left
No other income	England / W / NI	4% (common rule of thumb)	£6,000	£0	£6,000	£144,000
No other income	England / W / NI	5%	£7,500	£0	£7,500	£142,500
No other income	England / W / NI	6%	£9,000	£0	£9,000	£141,000
No other income	England / W / NI	8% (aggressive)	£12,000	£0	£12,000	£138,000
No other income	Scotland	4% (common rule of thumb)	£6,000	£0	£6,000	£144,000
No other income	Scotland	5%	£7,500	£0	£7,500	£142,500
No other income	Scotland	6%	£9,000	£0	£9,000	£141,000
No other income	Scotland	8% (aggressive)	£12,000	£0	£12,000	£138,000
£12.5k State Pension	England / W / NI	4% (common rule of thumb)	£6,000	£0	£6,000	£144,000
£12.5k State Pension	England / W / NI	5%	£7,500	£0	£7,500	£142,500
£12.5k State Pension	England / W / NI	6%	£9,000	£0	£9,000	£141,000
£12.5k State Pension	England / W / NI	8% (aggressive)	£12,000	£0	£12,000	£138,000
£12.5k State Pension	Scotland	4% (common rule of thumb)	£6,000	£0	£6,000	£144,000
£12.5k State Pension	Scotland	5%	£7,500	£0	£7,500	£142,500
£12.5k State Pension	Scotland	6%	£9,000	£0	£9,000	£141,000
£12.5k State Pension	Scotland	8% (aggressive)	£12,000	£0	£12,000	£138,000

Your salary in context

ONS · HMRC · CPI

Tax-free lump sum available

Up to £37,500 of this pot can be taken as a 25% Pension Commencement Lump Sum (PCLS), capped by the £268,275 Lump Sum Allowance.
PCLS used this year

Of the £6,000 requested drawdown, £6,000 is allocated as tax-free PCLS and £0 is taxable income.
Income Tax on drawdown

£0 of Income Tax via PAYE - an effective rate of 0.0% on the gross drawdown. National Insurance does not apply to pension income.
Net cash this year

Net drawdown £6,000 + net other income = £18,548 total take-home this year.
MPAA status

MPAA not triggered - you can still contribute up to £60,000 per year to DC pensions while taking only PCLS.
Forward annual allowance

Annual contribution allowance going forward: £60,000. Contributions above this lose tax relief.
Pot remaining

£144,000 stays invested after this year's drawdown (before any investment returns).
Sustainability projection

On a simple illustration (an assumed 30 years at a 4% withdrawal, scaled to your rate) the pot lasts roughly 30 years. This is not a forecast: it models no investment returns, charges or inflation.

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Related calculators

Pension Drawdown calculator - change pot, age, drawdown amount, other income, region, and tax year.
State Pension calculator - £241.30/week full new State Pension; stacks on top of drawdown for Income Tax.
Pension Annual Allowance calculator - the £60k limit, taper to £10k above £260k, and the MPAA trigger.
Pension Contribution calculator - cost of contributions after tax + NI relief.
Inheritance Tax calculator - the April 2027 inclusion of pensions in the IHT net.

Frequently asked questions

When can I access my UK pension pot?: You can normally access a defined-contribution pension from age 55 (rising to 57 from 6 April 2028). Earlier access is only allowed if you retire because of ill health or have a protected pension age (for example a right under a scheme joined before 6 April 2006). If you are expected to live less than a year, are under 75 and your pot is within your lump sum and death benefit allowance, you may be able to take the whole pot tax-free. Once eligible, you can take the whole pot, draw down income flexibly, buy an annuity, or mix all three - this is what 'pension freedoms' has meant since April 2015.
How does the 25% tax-free lump sum work?: Each time you crystallise pension funds, 25% of the crystallised amount can be taken as a tax-free Pension Commencement Lump Sum (PCLS). The remaining 75% is designated for drawdown (or annuity) and is taxable when drawn. Since 6 April 2024 the lifetime tax-free entitlement is capped by the £268,275 Lump Sum Allowance (LSA), which replaced the Lifetime Allowance. The cap only binds once your total crystallised pensions exceed £1,073,100 (four times the LSA), unless you hold a protection.
What is the Money Purchase Annual Allowance (MPAA)?: The MPAA is a £10,000 annual cap on tax-relieved DC pension contributions that bites once you 'flexibly access' your pension - the most common trigger being taking any taxable income from drawdown (even £1). Once triggered, it cannot be undone. DC contributions above £10,000 a year trigger an annual allowance charge on the excess, and carry forward cannot be used to cover it. Taking a 25% PCLS on its own (with no taxable income from the same crystallisation event) does NOT trigger the MPAA - useful for savers who want to ring-fence their future contribution allowance.
How is pension drawdown income taxed?: Taxable drawdown is paid through PAYE by your provider and taxed at the same Income Tax rates as salary. National Insurance does not apply to pension income. Withdrawals stack on top of any other taxable income you have that year (salary, State Pension, rental income), which is why a large one-off withdrawal can push you into a higher band; spreading drawdown across multiple tax years often saves tax.
What happens to my pension when I die?: If you die before age 75, defined-contribution funds can usually be paid to beneficiaries free of Income Tax, subject to time limits for paying or designating them and, for lump sums, your lump sum and death benefit allowance. From age 75 onwards beneficiaries pay Income Tax at their own rate on what they draw. Unused pension funds are currently usually outside the estate for Inheritance Tax, but Finance Act 2026 ss.66-71 bring most of them into the estate for deaths on or after 6 April 2027.
How long will my pension pot last?: Nobody can tell you in advance: it depends on investment returns, inflation, charges and how long you live. A 4% initial withdrawal is a commonly quoted rule of thumb, not a guarantee. This calculator's 'sustainability' figure is a simple illustration, not a forecast: it scales a 30-year anchor at 4% inversely with your withdrawal rate (8% shows 15 years, 2% shows 60) and does not model returns or inflation.
Is UFPLS different from flexi-access drawdown?: Uncrystallised Funds Pension Lump Sum (UFPLS) lets you take ad-hoc chunks straight from the uncrystallised pot, with 25% of each chunk tax-free and 75% taxable. Flexi-access drawdown by contrast crystallises a tranche of the pot upfront - 25% PCLS paid at that point, 75% moved into a drawdown wrapper from which you can take income flexibly. A UFPLS always triggers the MPAA; drawdown triggers it when you first take taxable income. Both are subject to the £268,275 Lump Sum Allowance on the tax-free portion. UFPLS suits ad-hoc withdrawals; drawdown suits regular retirement income.