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 in cases of severe ill-health that prevents you ever working again, or if you hold a protected pension age from a pre-2006 scheme. 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) - the post-LTA-abolition replacement. Most savers stay well below the LSA, so 25% is the operative figure.

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, and contributing above £10,000 across all your DC schemes loses tax relief on the excess. 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 via PAYE and taxed at your marginal Income Tax rate - the same rates that apply to salary. National Insurance does NOT apply to pension income, so drawdown is more efficient than equivalent earned income on the NI side. 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, any uncrystallised pot (and most drawdown funds) can be passed to beneficiaries free of Income Tax, provided the scheme is informed within two years. Death from age 75 onwards means beneficiaries pay Income Tax at their marginal rate on withdrawals from the inherited pot. Pension funds typically sit outside the deceased estate for Inheritance Tax purposes - though the Autumn 2024 Budget announced this will change from 6 April 2027, bringing most pensions into the IHT net.

How long will my pension pot last?

The widely-cited industry rule-of-thumb is that a 4% initial withdrawal rate (uprated for inflation each year) from a balanced portfolio sustained a 30-year retirement in historical US data ('the Trinity study'). Real outcomes vary with portfolio mix, sequence-of-returns risk, fees, and inflation - the 4% figure is a starting point not a guarantee. Our sustainability projection scales this: drawing 8% of your pot in year one halves the projected horizon to ~15 years; drawing 2% doubles it to ~60.

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. Both routes trigger the MPAA as soon as taxable income flows, and both stay subject to the £268,275 Lump Sum Allowance on the tax-free portion. UFPLS suits ad-hoc withdrawals; drawdown suits regular retirement income.

£400,000 Pension Pot: UK Drawdown 2026/27

A UK defined-contribution pension pot of £400,000 can fund up to £100,000 as a tax-free Pension Commencement Lump Sum (25% of the pot, capped at the £268,275 Lump Sum Allowance). At a 4% sustainable annual withdrawal rate that gives £16,000 gross taxable income (about £16,000 net alongside the full State Pension) for an expected ~30 years. 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

£100,000

Within the £268,275 LSA cap

4% sustainable draw (annual)

£16,000

Net £16,000 alongside State Pension

Sustainability projection

~30 years

At the 4% Trinity-study rule-of-thumb

How drawdown works on a £400,000 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 £400,000 pot as a tax-free Pension Commencement Lump Sum: £100,000 .
The remaining 75% (about £300,000) 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 4% sustainable rule-of-thumb you'd draw £16,000 taxable income per year (about £16,000 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 £400,000

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% (sustainable)	£16,000	£0	£16,000	£384,000
No other income	England / W / NI	5%	£20,000	£0	£20,000	£380,000
No other income	England / W / NI	6%	£24,000	£0	£24,000	£376,000
No other income	England / W / NI	8% (aggressive)	£32,000	£0	£32,000	£368,000
No other income	Scotland	4% (sustainable)	£16,000	£0	£16,000	£384,000
No other income	Scotland	5%	£20,000	£0	£20,000	£380,000
No other income	Scotland	6%	£24,000	£0	£24,000	£376,000
No other income	Scotland	8% (aggressive)	£32,000	£0	£32,000	£368,000
£12.5k State Pension	England / W / NI	4% (sustainable)	£16,000	£0	£16,000	£384,000
£12.5k State Pension	England / W / NI	5%	£20,000	£0	£20,000	£380,000
£12.5k State Pension	England / W / NI	6%	£24,000	£0	£24,000	£376,000
£12.5k State Pension	England / W / NI	8% (aggressive)	£32,000	£0	£32,000	£368,000
£12.5k State Pension	Scotland	4% (sustainable)	£16,000	£0	£16,000	£384,000
£12.5k State Pension	Scotland	5%	£20,000	£0	£20,000	£380,000
£12.5k State Pension	Scotland	6%	£24,000	£0	£24,000	£376,000
£12.5k State Pension	Scotland	8% (aggressive)	£32,000	£0	£32,000	£368,000

Your salary in context

ONS · HMRC · CPI

Tax-free lump sum available

Up to £100,000 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 £16,000 requested drawdown, £16,000 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 £16,000 + net other income = £28,548 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

£384,000 stays invested after this year's drawdown (before any investment returns).
Sustainability projection

At this withdrawal rate the pot is projected to last roughly 30 years (rule-of-thumb based on the 4% sustainable withdrawal rate from the Trinity study).

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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 in cases of severe ill-health that prevents you ever working again, or if you hold a protected pension age from a pre-2006 scheme. 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) - the post-LTA-abolition replacement. Most savers stay well below the LSA, so 25% is the operative figure.
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, and contributing above £10,000 across all your DC schemes loses tax relief on the excess. 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 via PAYE and taxed at your marginal Income Tax rate - the same rates that apply to salary. National Insurance does NOT apply to pension income, so drawdown is more efficient than equivalent earned income on the NI side. 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, any uncrystallised pot (and most drawdown funds) can be passed to beneficiaries free of Income Tax, provided the scheme is informed within two years. Death from age 75 onwards means beneficiaries pay Income Tax at their marginal rate on withdrawals from the inherited pot. Pension funds typically sit outside the deceased estate for Inheritance Tax purposes - though the Autumn 2024 Budget announced this will change from 6 April 2027, bringing most pensions into the IHT net.
How long will my pension pot last?: The widely-cited industry rule-of-thumb is that a 4% initial withdrawal rate (uprated for inflation each year) from a balanced portfolio sustained a 30-year retirement in historical US data ('the Trinity study'). Real outcomes vary with portfolio mix, sequence-of-returns risk, fees, and inflation - the 4% figure is a starting point not a guarantee. Our sustainability projection scales this: drawing 8% of your pot in year one halves the projected horizon to ~15 years; drawing 2% doubles it to ~60.
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. Both routes trigger the MPAA as soon as taxable income flows, and both stay subject to the £268,275 Lump Sum Allowance on the tax-free portion. UFPLS suits ad-hoc withdrawals; drawdown suits regular retirement income.