Pension Lump Sum Calculator (PCLS)
Compare taking 0-100% as lump sum. See tax-free portion, tax on excess and remaining pot for drawdown.
Last updated: April 2026 · Source: GOV.UK
Lump Sum (net)
£75,000.00
£75,000.00 tax-free
Remaining Pot
£225,000.00
£750.00/month (4% rule)
| Total Lump Sum (25%) | £75,000.00 |
| Tax-Free (25% of pot) | £75,000.00 |
| Net Lump Sum | £75,000.00 |
Disclaimer
This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.
How It Works
The Pension Commencement Lump Sum (PCLS) entitles you to withdraw 25% of your crystallised pension pot completely free of income tax. For defined contribution pensions, the PCLS is simply 25% of the pot value at the point of crystallisation. You can crystallise your pension in stages (phased drawdown), taking 25% tax-free from each tranche, which can be more tax-efficient than crystallising everything at once.
Withdrawals above the 25% PCLS are taxed as earned income. The tax calculation adds the taxable withdrawal to your other income for the year, then applies standard income tax bands: 0% on the personal allowance (£12,570), 20% basic rate (£12,571-£50,270), 40% higher rate (£50,271-£125,140), and 45% additional rate (above £125,140). Emergency tax coding on first withdrawals often results in overpayment that must be reclaimed.
Uncrystallised Funds Pension Lump Sum (UFPLS) is an alternative where you take a lump sum directly without entering drawdown. Each UFPLS payment is 25% tax-free and 75% taxable. This triggers the Money Purchase Annual Allowance (MPAA) of £10,000, restricting future contributions. The total lump sum allowance across all pensions is £268,275 (25% of the standard lifetime limit).
Lump sum and tax on a £180,000 pension pot
- Pension pot: £180,000
- Tax-free PCLS (25%): £180,000 x 25% = £45,000 — no income tax due
- Additional lump sum withdrawal of £20,000 from the remaining £135,000
- Assuming £30,000 salary: total income becomes £50,000. The £20,000 withdrawal is taxed at 20% = £4,000 tax
- Net received: £45,000 + £16,000 = £61,000 from the £65,000 withdrawn
Source: GOV.UK
Frequently Asked Questions
- What does the Pension Lump Sum Calculator (PCLS) do?
- Compare taking 0-100% as lump sum. See tax-free portion, tax on excess and remaining pot for drawdown. All calculations are performed in your browser using official UK rates and thresholds.
- Are these figures guaranteed?
- No. Pension projections are estimates based on assumed growth rates and current contribution levels. Actual returns depend on investment performance, fees and future policy changes.
- What is the pension annual allowance?
- The pension annual allowance for 2025/26 is £60,000. This is the maximum you can contribute (including employer contributions) and receive tax relief. The allowance is tapered for high earners.