Workplace Pension Calculator

This calculator projects the value of your pension pot at retirement based on your current contributions, employer contributions, investment growth and tax relief. It uses compound growth with monthly contributions to model how your pot grows over time.

UK pension contributions receive tax relief at your marginal rate. Basic-rate taxpayers get 20% relief automatically (a £100 contribution costs you £80). Higher-rate taxpayers can claim an additional 20% through Self Assessment. The annual allowance for 2026/27 is £60,000.

Auto-enrolment requires a minimum total contribution of 8% (5% employee + 3% employer). Many employers offer more generous matching schemes. The calculator lets you model different contribution levels and see the impact on your projected retirement income.

How much should you contribute? A common rule of thumb is to take your age when you start saving and halve it — that's the percentage of pre-tax salary to put away. Starting at 25 means 12.5%; at 30 it's 15%; at 40 it's 20%. The legal auto-enrolment minimum (5% employee + 3% employer = 8% total on qualifying earnings) is rarely enough on its own. The Pensions and Lifetime Savings Association estimates a single person needs £23,300/year in retirement for a moderate lifestyle, or £37,300 for comfortable — both well above what 8% will deliver alone.

Salary sacrifice vs Relief at Source vs Net Pay. Three different ways UK pensions process contributions affect your take-home pay differently. Salary sacrifice (most workplace schemes) reduces your gross salary before income tax AND NI is calculated — saving 28-47% per £100 contributed. Relief at Source (most personal pensions and SIPPs) takes contributions from your net pay and HMRC adds 25% (basic-rate relief); higher-rate taxpayers claim the extra 20-25% via Self Assessment. Net Pay arrangements deduct contributions before tax but after NI is calculated. Always check which method your scheme uses — salary sacrifice typically gives the biggest benefit.

The Annual Allowance and Tapered Annual Allowance. You can contribute up to £60,000 (or 100% of earnings, whichever is lower) in 2026/27 with full tax relief. Above this you pay an Annual Allowance Charge at your marginal rate. High earners face the Tapered Annual Allowance: for every £2 of 'adjusted income' over £260,000, your allowance reduces by £1, down to a minimum of £10,000. You can use 'carry forward' to bring unused allowance from the previous three tax years (provided you were a member of a registered scheme in those years). Once you 'flexibly access' a DC pension, the Money Purchase Annual Allowance (£10,000) replaces the standard limit.

When can you take your pension? Defined Contribution pensions can be accessed from age 55 (rising to 57 from 6 April 2028). You can take 25% tax-free (the Pension Commencement Lump Sum), with the remaining 75% drawn as taxable income via annuity, drawdown or lump sums (UFPLS). Defined Benefit and final salary schemes have their own retirement ages (typically 60 or 65). State Pension age is currently 66, rising to 67 between 2026 and 2028, and 68 thereafter. Drawing your pension before State Pension age means the pot must support more years, so a sustainable withdrawal rate of 3.5-4% per year is recommended.

Pension vs ISA — which is better? Pensions give tax relief on the way in but tax most of the income on the way out (75% taxable). ISAs use post-tax money but pay completely tax-free. For higher-rate taxpayers, pensions almost always win because you get 40% relief in but likely pay only 20% basic rate in retirement. For basic-rate taxpayers, pensions still win for the 25% tax-free lump sum and employer match, but the gap narrows. Lifetime ISAs (LISAs) for under-40s give a 25% government bonus and tax-free withdrawals after age 60 — combining one of each is often optimal.