Pension drawdown calculator, 2026/27

How this is calculated

The tax-free lump sum is calculated as 25% of the pot, capped at the standard lump sum allowance of £268,275. The remaining pot is then run forward year by year, growing at the rate you enter and reducing by the annual income you choose to draw, until it reaches zero, giving an approximate number of years the pot will last.

The tax on your drawdown income is calculated using the same progressive income tax bands as employment income, stacking the withdrawal on top of any other taxable income you enter, such as a small salary or rental income, so the marginal rate reflects your full tax position for the year.

This is a simplified constant-withdrawal, constant-growth model. It does not vary income for inflation, does not model sequence-of-return risk from poor early years, and does not include product or platform charges.

Flexi-access drawdown for directors and the retired

Flexi-access drawdown lets you take as much or as little income as you like once you access your pension, but any amount beyond the tax-free lump sum is taxed as income in the year you take it, which can push you into a higher tax band if you draw a large amount in one go.

Directors who continue to draw a small salary or dividends from their company alongside drawdown income need to consider the combined tax position, since the drawdown income sits on top of everything else for tax purposes, not on its own.

Sustainability of withdrawals

A withdrawal rate that looks sustainable on an average growth assumption can still run out early if poor returns happen in the first few years of drawdown, because there is less capital left to benefit from any recovery, a risk known as sequencing risk.

Reviewing the withdrawal rate periodically, rather than fixing it at outset, is generally sounder than relying on a single static projection like the one this calculator produces.

Do I have to take the tax-free lump sum before drawing an income?

No, you can take tax-free cash and taxable income together in stages, known as uncrystallised funds pension lump sums, or crystallise the whole pot at once and take the 25% lump sum up front, as this calculator assumes.

What tax rate applies to my drawdown income?

It is taxed as ordinary income alongside your other earnings for the year, using the normal personal allowance and basic, higher and additional rate bands, not a separate pension tax rate.

What happens once the pot runs out under this projection?

The calculator simply shows the pot reaching zero at a constant withdrawal rate and growth assumption; in reality you would normally reduce withdrawals well before this point to avoid running out of income entirely.

Does taking drawdown income affect how much I can still pay into a pension?

Yes, taking a taxable income from drawdown usually triggers the money purchase annual allowance, cutting future contributions to money purchase pensions to a much lower annual limit. See the Pension Annual Allowance Calculator for the figure.