Pension Drawdown Tax 2025-26 — How Much Will I Keep?
Pension drawdown is taxed as income. 25% of your pot is tax-free (PCLS); the remaining 75% is drawn down and taxed at your marginal Income Tax rate. No National Insurance applies to pension income.
Pension withdrawal tax rules 2025-26
Tax-free lump sum (PCLS)
25% of pot
Taxable drawdown
75% of pot
National Insurance
None on pension
Personal Allowance
£12,570/yr
Figures below assume pension income is your sole income source. If you have other income (state pension, part-time work), total income determines your tax band — withdrawals may be taxed at a higher rate.
£50,000 pension pot — tax-free lump sum: £12,500
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 3 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 3 yrs |
£100,000 pension pot — tax-free lump sum: £25,000
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 7 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 6 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 5 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 4 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 3 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 3 yrs |
£150,000 pension pot — tax-free lump sum: £37,500
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 11 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 9 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 7 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 6 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 5 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 4 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 3 yrs |
£200,000 pension pot — tax-free lump sum: £50,000
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 15 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 12 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 10 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 8 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 7 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 6 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 5 yrs |
| £40,000/year | £5,486 | £34,514 | £2,876.17 | 13.7% | 3 yrs |
| £50,000/year | £7,486 | £42,514 | £3,542.83 | 15% | 3 yrs |
£250,000 pension pot — tax-free lump sum: £62,500
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 18 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 15 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 12 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 10 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 9 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 7 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 6 yrs |
| £40,000/year | £5,486 | £34,514 | £2,876.17 | 13.7% | 4 yrs |
| £50,000/year | £7,486 | £42,514 | £3,542.83 | 15% | 3 yrs |
| £60,000/year | £11,432 | £48,568 | £4,047.33 | 19.1% | 3 yrs |
£300,000 pension pot — tax-free lump sum: £75,000
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 22 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 18 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 15 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 12 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 11 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 9 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 7 yrs |
| £40,000/year | £5,486 | £34,514 | £2,876.17 | 13.7% | 5 yrs |
| £50,000/year | £7,486 | £42,514 | £3,542.83 | 15% | 4 yrs |
| £60,000/year | £11,432 | £48,568 | £4,047.33 | 19.1% | 3 yrs |
| £75,000/year | £17,432 | £57,568 | £4,797.33 | 23.2% | 3 yrs |
£400,000 pension pot — tax-free lump sum: £100,000
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 30 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 25 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 20 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 16 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 15 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 12 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 10 yrs |
| £40,000/year | £5,486 | £34,514 | £2,876.17 | 13.7% | 7 yrs |
| £50,000/year | £7,486 | £42,514 | £3,542.83 | 15% | 6 yrs |
| £60,000/year | £11,432 | £48,568 | £4,047.33 | 19.1% | 5 yrs |
| £75,000/year | £17,432 | £57,568 | £4,797.33 | 23.2% | 4 yrs |
£500,000 pension pot — tax-free lump sum: £125,000
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 37 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 31 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 25 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 20 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 18 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 15 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 12 yrs |
| £40,000/year | £5,486 | £34,514 | £2,876.17 | 13.7% | 9 yrs |
| £50,000/year | £7,486 | £42,514 | £3,542.83 | 15% | 7 yrs |
| £60,000/year | £11,432 | £48,568 | £4,047.33 | 19.1% | 6 yrs |
| £75,000/year | £17,432 | £57,568 | £4,797.33 | 23.2% | 5 yrs |
£750,000 pension pot — tax-free lump sum: £187,500
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 56 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 46 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 37 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 31 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 28 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 22 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 18 yrs |
| £40,000/year | £5,486 | £34,514 | £2,876.17 | 13.7% | 14 yrs |
| £50,000/year | £7,486 | £42,514 | £3,542.83 | 15% | 11 yrs |
| £60,000/year | £11,432 | £48,568 | £4,047.33 | 19.1% | 9 yrs |
| £75,000/year | £17,432 | £57,568 | £4,797.33 | 23.2% | 7 yrs |
£1,000,000 pension pot — tax-free lump sum: £250,000
| Annual withdrawal | Income tax | Net annual | Net monthly | Effective rate | Pot lasts |
|---|---|---|---|---|---|
| £10,000/year | £0 | £10,000 | £833.33 | 0% | 75 yrs |
| £12,000/year | £0 | £12,000 | £1,000 | 0% | 62 yrs |
| £15,000/year | £486 | £14,514 | £1,209.5 | 3.2% | 50 yrs |
| £18,000/year | £1,086 | £16,914 | £1,409.5 | 6% | 41 yrs |
| £20,000/year | £1,486 | £18,514 | £1,542.83 | 7.4% | 37 yrs |
| £25,000/year | £2,486 | £22,514 | £1,876.17 | 9.9% | 30 yrs |
| £30,000/year | £3,486 | £26,514 | £2,209.5 | 11.6% | 25 yrs |
| £40,000/year | £5,486 | £34,514 | £2,876.17 | 13.7% | 18 yrs |
| £50,000/year | £7,486 | £42,514 | £3,542.83 | 15% | 15 yrs |
| £60,000/year | £11,432 | £48,568 | £4,047.33 | 19.1% | 12 yrs |
| £75,000/year | £17,432 | £57,568 | £4,797.33 | 23.2% | 10 yrs |