Pension Calculator vs Retirement Savings Calculator: Plan Your Future
Understand the differences between pension and retirement savings calculations.
CalculatorZone Editorial Team8 min readPublished Updated
The value of investments can fall as well as rise, and you may get back less than you put in. This article is general information, not personal advice.
Workplace Pension vs Private Pension: Which Is Better?
Most UK employees are automatically enrolled into a workplace pension scheme. But is that enough? And how does a workplace pension compare to a Self-Invested Personal Pension (SIPP)? Understanding the differences — and the valuable tax relief on offer — can meaningfully improve your retirement outcome.
Auto-Enrolment Minimum Contributions (2026/27)
Under auto-enrolment rules, the minimum total contribution is 8% of qualifying earnings. This is split as a minimum of 3% from your employer and 5% from you (the employee). Qualifying earnings are banded — for 2026/27 the lower earnings limit is £6,240 and the upper is £50,270, so contributions apply only to earnings within this range.
Workplace Pension vs SIPP Comparison
| Feature | Workplace Pension | SIPP |
|---|---|---|
| Employer contributions | Yes (min 3%) | No (unless employer pays in) |
| Tax relief method | Net pay or relief at source | Relief at source (basic rate added) |
| Investment choice | Limited fund selection | Wide — stocks, ETFs, bonds, funds |
| Annual allowance (2026/27) | £60,000 | £60,000 (shared limit) |
| Access age | 57 from 2028 | 57 from 2028 |
| Best for | Maximising employer contributions | Self-employed / extra saving |
Tax Relief: Net Pay vs Relief at Source
Under the net pay arrangement, contributions are taken from your gross salary before tax — you get full relief at your marginal rate automatically. Under relief at source, you contribute from your net pay and HMRC adds basic rate tax relief (20%) to your pot. Higher and additional rate taxpayers must claim the extra relief via self-assessment.
The strategy: always contribute at least enough to get your full employer match — this is an immediate 60% uplift on your own contribution (3% from your employer on top of your 5%). Then consider a SIPP for greater investment flexibility.